Although gold is no longer used as money as it once was, it is still an attractive investment. Why? Because gold is always in limited supply – unlike currencies and other investment objects. The speed and cost of mine gold means that there will almost always be a larger amount of currency running for a smaller and smaller amount of gold.
Thanks to this small amount of gold in the world, gold has historically retained its purchasing power over the centuries. Popularly it is said, for example, that 1 oz of gold could buy a fine toga and a pair of sandals in ancient Greece, where today it can buy a fine suit and shoes.
For the same reason, investing in gold is a great way to spare yourself the effects of a runaway inflation.
So, how does one enter the gold market as an ordinary person? First of all, it is possible to buy physical gold in the form of both gold bars and gold coins.
Before you start buying, you should learn more about the market. Read on to learn more about how to get started with your gold investment.
Possibilities to invest in physical gold
· Direct investment – gold bullion
This is one of the most popular ways to own gold. When most people think of gold bullion, people typically think of a large gold bar.
Gold bullion, however, means any kind of investment gold that has been checked and certified according to purity and weight. This includes gold bars, gold coins, etc.
In most cases, the bullion comes in the form of a gold bar. When buying gold bars, it is recommended that you find a balance between the size and number of bars. For example, if you want to buy 1 kg of gold, it may be advisable to divide them into smaller pieces rather than having only 1 kg of gold bar. It can be difficult to find an investor for your gold bar if it is worth half a million. Furthermore, if you need a little quick cash, you can not just sell 10% of the bar. Therefore, you should also invest in smaller bars and coins as they are more liquid and will be easier to get set aside.
· Direct investment – gold coins
Gold coins are minted by states worldwide, and are typically purchased by private sellers with a sales margin of between 4% and 7% of their fair value.
The benefits of investing in gold coins are:
- It is easier to check the authenticity of gold coins for example by listening to the sound of the coin.
- Gold coins come in smaller sizes, making them a more convenient way to invest in physical gold.
- There are many reputable dealers selling gold coins.
As a beginner, you should focus on the common coins, such as American eagle, Australian kangaroo, Austrian Viennese philharmonic, Canadian maple leaf and South African krugerrand. Let the collectors about the older, rarer gold coins.
· Indirect investment – mining shares
You can also invest in mining companies as an indirect form of gold investment. This is done by buying funds, ETFs or stocks that focus on companies that mine gold.
There are multinational mining companies operating worldwide. Therefore, it is important to think about several different things when buying stocks. As this is a time consuming option, it is not realistic for all investors.
However, this option is comparable to owning physical gold.
How to buy gold?
It goes without saying that you can not just go to any store to buy gold, although there are bullion dealers with physical shops, such as Tavex for example. There are also websites where you can buy gold coins and get them delivered to you. Tavex has also website where you can do exactly this. There are also various online platforms which sell investment products related to gold price, if you choose to use this option, you will not get any physical gold, but a certificate. There are of course advantages and disadvantages to both platforms, but at Tavex we want to give our customers real gold in hand.
As with any investment, you should do your homework before buying gold coins or gold bars, as some sites are reputable – while others are not.
When it comes to investing in gold, it is important to make it clear to oneself what one’s purpose of the investment is. If you want to make lots of money fast, physical gold is not the way forward. If, on the other hand, you want to secure a fortune or hedge your other investments, physical gold is a good idea.
If you decide to get started with gold, you can talk to us – we will give you guidance through various products and our attitude to the market – and we are of course happy to give you more advice along the way.