Gold is usually valued as a commodity, currency, and investment for many years. This is why it’s still popular nowadays among investors because you can use gold as a hedge against inflation, currency devaluation, or deflation.
And, because of its ability to give you financial protection during times of economic uncertainty, it can be a good idea to invest in physical gold. Keep in mind that the gold market can be quite liquid and there are various ways in which you can gain exposure to gold including gold bars and coins. This page discusses the various ways you can buy gold.
Physical gold
Physical gold can offer you a direct exposure to gold. When gold is in bulk form, it’s called a bullion, and it can be minted into gold coins or cast into bars. The value of a gold bullion is usually based on its purity and mass rather than the monetary face value. Remember that if gold coins are issued with the monetary face value, the market value still depends on its fine gold content.
You can purchase physical gold from private mints, government mints, jewelers, and precious metal dealers. Because different gold sellers can give the same gold at different prices, it’s crucial for you to do research so that you can find the ideal deal. When you buy physical gold, you need to pay the full price.
Physical gold ownership can involve several costs like the insurance costs, storage costs, transaction fees, and markups related to purchasing and selling the commodity. Also, there can sometimes come with the processing fees as well as a small lot fees, especially if you are making small purchases. Collectively these costs cannot be that significant to affect you when you decide to invest a small portion of your portfolio in gold, but they can also be overwhelming if you want to have a large exposure. Check https://goldtrends.net/gold-ira-companies/ before you invest in gold.
Gold EFTs
EFTs are not like physical gold because you can buy them like shares on any stock exchange. The good thing about EFTs is that it allows you to get access to gold and you can avoid some costs like storage costs, markups, and many more. However, you should expect that you can lose a certain percentage of your investment’s value to the expense ratio of the fund. An expense ratio refers to the recurring annual fee that is charged to the funds to pay for administrative costs and management expenses. As a result, it’s always a good idea to weigh your options when it comes to choosing gold EFTs or having a gold IRA.
It’s also important to note that you need to pay a commission when you decide to purchase and sell an EFT. Many online commissions are usually affordable, but they can always add up if you happen to be an active trader. Besides, most brokers usually charge a high commission, especially for broker-assisted trades, special order types, and automated phone orders. To address the cost concerns that come with EFTs, some brokers are now giving commission-free online trading for some type of EFTs.