Of all the valuable metals, gold is by far the most widely traded as an investment. Most investors usually purchase gold as a means of diversification risk, particularly through the usage of derivatives and future contracts. The gold market is also susceptible to extreme volatility and speculation, as are many other financial markets. As gold tends to be a physical asset as well as an investment, there are some gold investments that are safer than others.
What Are the Different Types of Gold Investments?
One of the safest gold investments are bullion bars. Gold bullion bars are sold in standardized sizes, including troy ounces, and come in various weights, such as one-ounce, two-ounce, half-dollars, and even one-hundred-gram bars. Gold bars are secure investment instruments and are a great place to start when you are just getting started in gold investments. Buying gold bars can be a bit of a challenge, however, so it is important to keep in mind that buying gold bars is not something you should do just for the sake of purchasing gold.
Another category of gold investments that are somewhat less secure than bullion bars include gold mining stocks and gold mutual funds. Gold mining stocks are shares in gold mines that the major gold mining companies choose to invest in. Gold mining etfs are a newer type of gold investment, and like gold mutual funds, they are not federally insured. Although gold mining stocks and gold mutual funds have higher risk and more volatile returns than gold mining stocks, they also tend to have lower commission fees, which can be used for other gold investments.