How to Invest in Gold
How to Invest in Gold. Ways to invest in gold and make money from the gold market.
Ways to Invest in Gold
You can probably think of at least one way to invest in gold: invest in gold coins. What are the other ways of investing in gold? In ‘A Guide to Investing in Gold’, a pamphlet published by The World Gold Council, the council highlights ten main ways to invest in gold:
- Bullion
- Bullion coins
- Numismatic coins
- Statement accounts
- Accumulation plans
- Mining shares
- Mutual funds
- Futures
- Options
- Forwards
Who Invest in Gold Market
To learn to invest in gold, you must first understand the basic market forces that cause movements in the price of gold.
The main categories of gold consumption in the world are as follows: jewelry, electronics, bar hoarding, coins, dentistry, medallions.
Jewelry
Gold is most commonly used for ornamental purposes. Almost 90% of total world gold consumption relates to demand for jewelry. There are almost no substitutes for the unique color, appearance, weight and texture of gold. It has exceptional reflective properties that make it a very attractive form of ornamentation.
Physical gold investing
The second largest demand category would be physical gold investing – bars, coins, medallions, for example. However, unlike jewelry fabrication, hoarding lacks definitive long-term patterns. Patterns of hoarding and dishoarding vary over time, and can be rather unpredictable. Global events can easily affect world demand for physical gold investments
Dentistry
Dentistry is arguably the third largest source of world demand for gold. Nonetheless, as the need for gold fillings is gradually phased out in the developed countries, gold dental fabrication will gradually decline over time.
Electronics
This sector is marked by expanding gold consumption. With strong uptrends in mobile communication, personal computers and automotive electronics, gold demand due to the growth of the electronics sector will likely be strong. Promising recent developments include growing demand for digital cameras, and research into gold-based superconductors.
Gold Supply
When analyzing gold supply, be careful to note that supply does not necessary come only from the underground mines. Gold supplies also com from aboveground inventories – the hoarding or dishoarding of gold bars, coins and medallions can affect both demand and supply at the same time.
Gold mine production has been on a gradually increase since 1980, especially with the development of methods such as ‘heap leaching’, which allowed companies to economically remove gold from low-grade ores and surface soils.
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