1. Gold bullion
One of the more emotionally satisfying ways to own gold is to purchase it in bars or in coins. You’ll have the satisfaction of looking at it and touching it, but ownership has serious drawbacks, too, if you own more than just a little bit. One of the largest drawbacks is the need to safeguard and insure physical gold.
To make a profit, buyers of physical gold are wholly reliant on the commodity’s price rising. This is in contrast to owners of a business (such as a gold mining company), where the company can produce more gold and therefore more profit, driving the investment in that business higher.
2. Gold futures
Gold futures are a good way to speculate on the price of gold rising (or falling) <a href="https://londongoldcentre.co.uk/sell-gold/sell-gold-bar/">sell
gold bars</a>, and you could even take physical delivery of gold, if you wanted, though physical delivery is not what motivates speculators.
The biggest advantage of using futures to invest in gold is the immense amount of leverage that you can use. In other words, you can own a lot of gold futures for a relatively small sum of money. If gold futures move in the direction you think, you can make a lot of money very quickly.
3. ETFs that own gold
If you don’t want the hassle of owning physical gold or dealing with the fast pace Three of the largest ETFs include SPDR Gold Shares (GLD), iShares Gold Trust (IAU) and Aberdeen Standard Physical Gold Shares ETF (SGOL). The goal of ETFs such as these is to match the price performance of gold minus the ETF’s annual expense ratio.
4. Mining stocks
Another way to take advantage of rising gold prices is to own the mining businesses that produce the stuff.
This may be the best alternative for investors, because they can profit in two ways on gold. First, if the price of gold rises, the miner’s profits rise, too. Second, the miner has the ability to raise production over time, giving a double whammy effect.
5. ETFs that own mining stocks
Don’t want to dig much into individual gold companies? Then buying an ETF could make a lot of sense. Gold miner ETFs will give you exposure to the biggest gold miners in the market. Since these funds are diversified across the sector, you won’t be hurt much from the underperformance of any single miner.
The larger funds in this sector include VanEck Vectors Gold Miners ETF (GDX), VanEck Vectors Junior Gold Miners ETF (GDXJ) and iShares MSCI Global Gold Miners ETF (RING). The expense ratios on those funds are 0.51 percent, 0.52 percent and 0.39 percent, respectively, as of October 2022. These funds offer the advantages of owning individual miners with the safety of diversification.