Throughout history, collecting gold has been a popular form of investment among the wealthy. As gold continues to be the most preferred precious metal, its essential value continues to resist economic inflation. However, purchasing gold is not nearly as straightforward as you might think it is—there is actually a number of ways on how to invest in it. Whatever method suits you depends on how much you can afford to pay, your investment goals, the amount of risk you’re willing to take, and the desired period of time you’re willing to hold on to it. This article briefly discusses 4 methods of gold ownership.

Buying Gold

 METHOD 1: BUYING SCRAP GOLD

Start off by managing your risks. Recently, the price of gold has been escalating on the market. Owning such a valuable asset as gold is a low-risk form of investment. The term of investment varies, but its potential benefits will exceed the minor risks that come with it. This is ideal for first-time gold investors or for someone who’s trying to set something aside in case of any financial uncertainty in the future.

Start asking your friends and family. Find out if they have any gold items such as damaged necklaces, bracelets, rings, and earrings they want to take off their hands. Discuss with them a price you’re all willing to accept.

Run an ad in the newspaper or Craigslist. There will always be people in a financial slump turning to the classified section or help wanted sections of the newspaper or the internet, so placing an ad will help them find means on how to sell their possessions and make money.

Make sure to build rapport with the local pawnshop owners. They can inform you of any gold items on sale that the pawnshops don’t want anymore.

METHOD 2: BUYING GOLD BULLION

Decide on what kind of gold you want to buy. Whether it will be in the form of coins, bars, or jewelry, they all carry significant value, depending on their weight. Gold bars can be sold at popular gold refineries such as PAMP, Johnson Matthey, Credit Suisse, and Metalor. Gold jewelry, on the other hand, is not as straightforward as the previous gold forms mentioned—there’s also the price you have to pay for the design’s craftsmanship and desirability.

Choose the weight of the gold. Gold bullion bars are sold by the ounce (1.0 oz., 10 oz., and 100 oz.). Obviously, the heavier the gold, the higher the price. Gold coins seem to preserve its value for a long time. The American Eagle coin and other coins come in four weights: 10z., 0.5 oz., 0.25 oz., and 0.10oz.

Find out where to buy gold bullion. Those who sell both coins and gold bars include dealers, brokerage houses, and banks. Visit Buy Gold Online to know means of gold investment through online marketplaces. Choose jewelers who have been in the business of selling gold jewelry for a long time. And lastly, venture on buying gold through auctions. But remember that whatever they have there will be sold “as is” so it’s up to you on how to gauge their value.

Identify the ongoing market price for gold. Visit sites like Kistco to spot the current market price for gold.

Buy gold coins or bars with a premium of only 1% and at or below prices below the current market value. Remember to keep all receipts of purchases, and take note of the delivery date before sealing the deal.

Keep all bullions stored in a safe and secure place. Keep them locked in a safe-deposit box, just to be sure. Buy high-quality storage mechanisms as much as possible.

METHOD 3: BUY GOLD FUTURES

Play it smart. This is a form of investment that comes with greater risk as opposed to buying gold scraps or bullions. This method requires a lot of speculating or predicting the price of gold in the near future, so the term of investment usually varies. Buying futures is usually for expert or seasoned investors—not for neophyte investors.

Sign up for a futures account at a commodity trading firm. Investing in futures is a better way to control larger amounts of gold than cash.

Don’t invest in capital that you can’t afford to lose. Although owning gold is low-risk, once the price of gold drops, you could end up losing more than what you initially invested in once the commissions have been taken into account.

Purchase a gold futures contract and wait for the contract to end. Gold futures are legal contracts that allow you have gold delivered to you at a predetermined price. When the contract ends, you can collect your earnings, or pay for your losses. A handsome sum of money can be made if the value of gold futures goes up relatively with your currency. If it goes down, you could lose what you invested or possibly, even more. In other words, investing in gold futures is just a way to speculate or predict the price of gold, but not exactly a means to immediately build savings.

METHOD 4: BUYING GOLD EXCHANGE TRADED FUNDS

Use exchange traded-funds to track the prices of silver and gold. Usually purchased through a broker, it’s similar to buying gold futures as it entails speculating or predicting future prices, but you won’t be directly owning physical assets.

Overall, whatever method you choose, always determine why you want to invest in gold in the first place. You have to understand that purchasing and investing in gold can be a means of protective insurance against any financial, political, or economic disaster. Make sure to store it safely.

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