The COVID 19 pandemic has proven once again the effectiveness of gold as a form of investment. In the first half of 2020, gold prices have increased as high as 30% in the world market. This is not surprising given how gold prices tend to rise in times of economic uncertainties. Gold prices rise as their demand increases during crises. During these times, more people want to buy gold as an investment because its value is more stable than the dollar. Read this article to have the basic knowledge of investing in gold and ways on how to start investing.
Three ways to purchase gold
Humans have a long history of gold. It is a precious metal that has been embedded into the fiber of our culture, tradition, and identity. In modern times, this precious metal is more than an ornament. It is also a form of long term investment.
For many, gold is a safe haven investment because it keeps its value for the long term. Since its supply is limited, its price and value are often unrelated to the economy. This means that even during recessions, gold prices remain relatively stable.
If you are from Singapore, there are various ways on how you can own gold. Some of which are through buying gold metal itself, funds, and certificates. In this article, we teach you which of these options could suit your specific needs. We also discussed how each of these options could be advantageous or disadvantageous in specific situations.
Remember that investing in gold can be a difficult business. While there are success stories in investing in gold, there are also tales of failure and disappointments. Hence, it is important that you choose which type of gold purchase fits your specific needs. Read on this article if you want to invest in gold in the near future.
1. Buying Gold Bullion (physical gold)
One way to invest in gold is to buy gold metals or the so-called gold bullion. Gold bullion refers to pure gold that may come in the form of bars, ingots, or coins. These gold bars and other physical items can be bought from a jewelry store, brokerage, or even banks.
While the prospect of owning gold coins and bars is exciting, note that buying physical gold takes more work than others would imagine. Let us face it. Owning this expensive metal can attract thieves and criminals. To successfully keep and store it, you either have to build a secured space for your gold property or hire an expensive facility that would keep it for you. For some, this additional expense is simply not bearable.
In Singapore, there are various stores that sell physical gold. Be sure to do your own research first before purchasing gold bullion because UOB gold price Singapore and other gold sellers have varying prices. You can also research on the keywords “UOB gold and silver price” or “gold and silver price UOB” online to expand further your knowledge about physical gold or other precious metals.
2. Buying Gold-related ETFs or other types of funds
Another way to invest in gold is to invest in stocks or other commodities through the help of an ETF or a Gold Exchange Traded Fund. In this method, you can buy or sell gold shares through a broker or a website. An Exchange Traded Funds company will help you deal with your investment. You do not get to hold gold physically.
This type of investment is more liquid because investors can easily sell their stocks. Also, it is a low-cost entry because even with limited money, you can buy stocks. This is unlike purchasing gold bullion where you have to buy one entire bar or a piece of coin. For individuals who do not have prior experience in the gold trade, they prefer this because it does not require a lot of money, and it does not overwhelm them as new investors.
Investors who are more inclined to take this form of investment can begin looking for companies here. Be sure to choose trusted companies. Examine their background and history first so you can be sure that your investment is safe and secure.
3. Buying Gold Certificates
Investors can also choose to buy gold certificates as a form of investment. Here, investors are issued a certificate that can be exchanged at any time for cash or physical gold. Buying gold certificates is similar to buying physical gold. It is just that you are not carrying your gold bars and coins and are given a certificate.
This certificate is proof that you own an actual gold. You can then sell this certificate so you can turn it into cash. A lot of individuals would choose this type of investment because it hassle-free. Also, it does not require any additional form of protection.
You can buy gold certificates in your own bank. Just ask your trusted banks if they offer this type of service. For many, this is a better option than buying physical gold because having a secure facility to store bars or coins can really be challenging. Buying a secure storage space or facility for gold bullions can be expensive as well.
Buying Gold Mining Stocks
Unlike the other forms of investments cited above, buying gold mining stocks is technically not purchasing gold. Instead, you are investing in companies that mine, explore, or produce gold. Buying their stocks means buying a part of the company. As the value of the company increase, the value of the stocks you bought increases too.
Often times, the movement of gold prices reflects that of the movement of gold mining stocks. This means that in most cases when gold prices increase, investors with gold mining stocks can make a profit as well. This is not true in some instances though, because companies have their own growth and progress separate from the development in gold trade. This is the reason why some people would still prefer buying a bar of physical gold.
If you happen to prefer this form of investment, you can look for the top gold companies. Make sure that you are putting in your money to legitimate and trusted companies. You can do your own research on the mining company before investing just to be sure that you are not wasting your money.
Price of gold
The price of gold fluctuates from time to time. There are various factors that cause the price of this important metal. This means that people wishing to be gold investors must be constantly knowledgeable on their prices.
In Singapore, there are many ways where investors can be updated on the movement of gold prices. For example, you can check for the daily gold price in Singapore by checking this website. Also, if you wish to know more about gold investments or even silver investments, you can check this website. They have a lot of valuable information on investing in precious metals.
Take note that before making any investment in gold, you must be fully informed as to how this market works. Look at the trends and developments in the past. Also, compare the benefits and disadvantages of gold and financial investments. Reading all this information would help you make better decisions when it comes to investing in gold.
Investing in gold has been popular in the past years. Investors, traders, and even laypeople have seen the effectiveness of gold when it comes to investing and saving. In fact, its prices have been steadily rising since the mid-2000s. This is partly the reason why investments in gold continue to rise in recent years.
This year’s pandemic and the economic upheavals it has caused have further revealed the value of gold. As the world economy is facing abrupt changes, gold investments have simply become more stable and less risky than financial investments. Given all these, it is not surprising to see more Singaporeans wanting to explore this form of investment.
The important thing to remember here is that much like other forms of investment, gold investments have its own dangers and threats. For those who wish to be investors in the future, they must understand how this investment scheme works. Like other forms of investment, do not make hasty decisions. Study and research about this market first so you can be confident in the decisions you will make.
Aside from what we have discussed here, there are many other ways of investing in gold. For one, we did not discuss the gold savings account which you can purchase in your banks. In this type of savings account, you are basically buying gold and keeping it as your investment. Be sure to read more about this, and other forms of investment in gold so you can be certain on which investment type best fits you.