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Investment in Gold – How to Invest in Gold

investment in gold

Investment in gold is considered as the most popular commodity investment among the four precious metals. Investment is done for the purpose of preventing any crises which might arise due to political, social or economic depression. Up to now there’re 6 methods where gold can be invested:

1. Purchasing gold coins.

Being the most popular option, gold coins are often bought with prices determined by their weight. Trading can be done over the counter in a number of banks in Switzerland.

2. Purchasing gold bars.

Being the traditional option, gold bars are also traded over the counter in a lot of banks in Switzerland as well as in Austria and Liechtenstein. Investment in gold bars can also take place among bullion dealers. The trading of gold bars, however, has become less popular these days as certain issues like transportation, storage and verification requirements need to be met.

3. Creating a gold account.

A lot of banks in Switzerland allow investors to register a gold account with them. In this country investment in gold is done just like foreign currencies are traded. This type of account is protected via allocated or pooled storage option.

4. Getting a gold certificate.

This is a much preferred investment in gold option as there is no need to handle gold in its physical form. With the certificate, trading can be done without having to deal with issues related to handling of the physical form of gold.

5. Investment in gold via GETFs.

Buying and selling gold via GETFs is similar to trading shares in NYSE (New York Stock Exchange) or LSE (London Stock Exchange). The first GETF is the Gold Bullion Securities which took place in the Australian Stock Exchange. This investment option provides a learning platform for investors to gain understanding on the price of gold without having to deal with storage issues. Annual payment for commission and storage is required when investment in gold is done via GETFs. The charges are imposed based on how much gold has been sold under the certificate and over a period of time, the amount of gold will decrease.

6. Investment in Gold by Creating a CFD (contract for difference).

Many financial institutions in the United Kingdom tend to provide CFD or Contract for Difference to anyone who wants to start an investment in gold. Both parties, i.e. the seller and buyer are required to enter into a contract. The seller is required to make a payment to the buyer and the amount is calculated based on the difference between the existing value of gold and the actual value during the time of contract. If the difference shows a negative number, the seller does not have to pay the buyer. Instead, the buyer will have to make a payment to the seller. In short, CFD provides such a convenience to investors to start any short or long term investment in gold.

Investment in gold can be financially rewarding especially when gold is sold before the stock market price declines.

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