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Basics of Investing in Gold

Gold is a commodity that for centuries is regarded as something worth investing in. In not too recent times; it is acclaimed as one of the best assets for diversifying one’s portfolio. From the olden days when it was used as a status symbol to these days when it is a well sought after investment asset, the intrinsic value remains unquestionable.

Due to the rave about this precious metal, a lot of people have jumped on the bandwagon of people who invest in it. Sadly, a number of people have been burnt in their venture. Some were unfortunate to meet unscrupulous people in their dealings while some did not due their due diligence before venturing into this territory.

In this article, we will give you the bare basics about investing in gold but we expect that you will take it further if you intend to become a serious investor in the commodity.

Different Ways of Investing Gold

This precious metal is, as we have earlier stated a commodity with intrinsic value; so much so that at first mention, a lot of people feel that it is above their means and they can’t have anything to do with it. However, there are different ways of investing in this precious metal, and we will discuss a few of them in detail.  We believe that at the end of our discourse you will find the one that falls within your income bracket.

Buy Gold Jewellery

There are some cultures that strongly believe that having gold jewelleries is a safe and great way of investing in the precious metal. If you are thinking of going this route, you need to bear a few things in mind and they include the following:-

  1. Buy from a credible jeweller.
  2. Ensure that the jewellery is hallmarked. Those are the types that can be considered as investment. This is because in most countries, they are the ones that the purity level is verified by the government. Additionally, this will make it easier for you to resell when you choose to.  Read this article for more information about gold hallmarks.
  3. Bear in mind that there will be additional cost (between 5 to 20%) to the spot price of the actual physical commodity due to the cost of workmanship and branding.  Although gold appreciates, you may not be able to recover the extra cost when you sell the jewellery.
  4. You need to have a safe storage for it. Some people decide to keep it in a safe at home while others take it to a bank vault for safekeeping.
  5. Some banks/ financial institutions may give you a loan using it as collateral.

Buy the Physical Commodity

For serious investors who want to add the physical commodity to their portfolio, you can consider coins or bars. The coins come in different shapes and sizes ranging between 1 and 50 grams while you can get the bars in increments of 100 grams up to 1 kilogram.

You can buy this precious yellow metal from dealers, companies or even pawn shops. There are also online dealers but you have to be very careful with them so as not to fall prey to scammers. 

The bars also commonly called bullion is the popular choice for people who want to buy the physical commodity. Bear in mind that the genuine product must have the manufacturer, the purity and the weight stamped on the face.

The purity of the commodity is very important or else it would not be investment quality. The purity has to be a minimum of 99.5%; this is very crucial especially for gold IRAs. Any bar of less quality cannot be held in an IRA account.

Gold coins are considered more as collectibles than investment. This is mainly because the cost of buying coins is usually higher than the spot price of gold and they have other additives in the composition. So that lack of purity up to 99.5% makes it unfit to be used in investment portfolios.

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Invest In Gold ETFs (Exchange Traded Funds)

Gold ETFs are the same thing as traditional ETFs only that the assets are gold backed assets. Investing in them is also the same as buying the physical commodity but without the stress of thinking about storage, insurance and everything that comes with owning the physical commodity.

This is also a good investment option for investors who do not have so much money to buy the physical commodity. They buy into the market just like one would buy stocks of companies and thereby diversify their portfolio.

This type of investment is beneficial for the following reasons:-

  1. It serves as a hedge against inflation.
  2. Trading in it is quite simple as it works just like conventional ETFs that you can buy and sell through your fund manager or stockbroker.
  3. It operates on open trading as you can get the spot price on the stock exchange without ambiguity.
  4. It is easy to transact as you can sell or buy whenever stock exchange is open. 
  5. It is a secure investment because you do not hold the physical commodity; you do not have to be bothered about theft, or paying storage fees and other fees that come with holding the physical commodity.
  6. Helps you to diversify your portfolio. This is essential to mitigate risks in an unstable economy and enable you to have better returns on your investment.
  7. Can serve as collateral for loans from banks or other financial institutions.

The remarkable thing about investing in this precious metal is that you do not have to be financially savvy to start. All you need is a reputable investment or gold company and thankfully there are quite a number of them out there like Blanchard Gold, American Hartford Gold, Augusta Precious Metals and Goldco. You can go online to get more information about Blanchard Gold and the companies mentioned here and even more. This information will help you decide which company to sign up with.


We have discussed some basics about investing in gold. While we know that this article is in no way exhaustive, we believe that this is a good start for your research into investing in this precious metal.

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