The Basics of Investing in Gold
Perhaps no other investment has as much allure and intrinsic value than that of gold. Prized since the ancient Egyptians, as the world enters a period of economic instability gold remains one of the few investments to appreciate in value. In fact, during the period from 2001 to present, the price of gold has skyrocketed from US$250 to over US$1100 in value.
Whether it is in coins, bullion, gold company stocks or even a Canadian gold ETF, gold offers and excellent avenue to retain value in a time of uncertainty.
Gold coins are available in several different types, most notably the U.S. Eagles, South African Kruggerands, and Canadian Maple Leafs. These are produced by national mints of the respective countries and are considered bullion, much like gold bars. However, some coins (proofs, i.e. coins made with exceptional quality and precision) not only have value due to the gold content but also have collector value. Numerous vendors on the internet sell gold coins and bars, so it pays to shop around for the best price.
Gold company stocks are less for the pure gold investor and more for the person who is looking for a solid return, and doesn’t mind the homework involved in company research. Gold companies range in size from such giants as Barrick (ABX), and Iamgold (IAG) to tiny Mom and Pop operations. Gold ETFs (exchange traded funds) offer the investor the ability to mediate risk by investing in not just a few companies, but the entire gold sector.
As always, one must be on the lookout for scams and fraud, and people are so enamored with the concept of owning gold that they sometimes use less than stellar judgment in selecting a broker. Be careful, be contentious in your selection, and feel safe in owning one of nature’s best treasures: gold.
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