A Few Ways to Invest in Gold in 2020
With so many industries, stocks, and assets struggling mightily in 2020, gold has flourished. Recognized for many years as a commodity that can protect wealth when tough times arrive, gold has surged to record highs during the current pandemic. As has happened in past crises, investors have turned to the metal as a safe place to protect their financial assets, at least until the pandemic and recession abate. This in turn has helped to drive the price up.
This has undoubtedly led more people to take an interest in gold investment. So below, we’ve provided a few details about the different ways in which you can buy into this market during its current hot streak.
Buy Gold Bullion
The simplest way to invest in gold is to actually purchase it. It’s a practice that’s been made easy by a variety of commodity brokers and reputable gold dealers online, and it basically allows you to purchase and hold whatever quantity of the precious metal you like. In some cases, this can mean that you actually have physical gold bullion shipped to you. More often than not though, the gold you buy will be set aside for safekeeping in a trusted vault used by the broker or dealer you’re operating through. This makes for a low-hassle investment, and a way to store away some gold in the hopes that its price will simply keep rising.
Arrange Gold CFDs
This is a process that you can actually explore in a variety of markets, including stocks, currency, and commodities. But basically, trading gold CFDs means speculating on the price, generally with leverage. You can arrange a contract expecting gold’s price to rise, or one expecting its price to fall, and earn a return either way. And with leverage, you can maximize that return and make more than you otherwise would have based on what you put in. This is ultimately a means of trying to profit off of gold without buying it directly.
Invest in Mining Companies
Gold is a commodity — not a stock. However, there are certain stock investments that can be suitable substitutes for buying gold bullion or trading CFDs. Specifically, there are gold mining companies that in many cases are publicly traded, and which tend to reflect the price of gold in their value. As you might expect, high demand for gold tends to mean that these companies are performing well. That doesn’t mean they’ll exactly match the raw price of gold in all of their movements, but there is correlation.
Silver is a separate asset unto itself, but here too there is often correlation. And in fact, recently, the price of silver has outperformed that of gold, despite gold generating more headlines. Usually (but not always) silver will rise and fall in a pattern similar to gold, and for similar reasons. So, while neither is better or worse than the other as an investment, this is another alternative option. If for whatever reason you’d prefer not to buy gold, or you’re looking to diversify, buying silver can be a similar process.
Now, whether or not gold continues on its current hot streak remains to be seen. But if you’ve been watching it soar and getting curious about investment, these are some of your options.
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