Precious metals are rare metals that have a high economic value, such as gold, silver, and platinum. She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies for financial brands.
How gold is taxed
This can be purchased on the stock exchange and transferred in the same way as a share. When you think about investing in gold, don’t restrict yourself to just buying physical gold, like coins or bullion. Alternatives to invest in gold include buying shares of gold mining companies or gold exchange-traded funds . You can also invest in gold by trading options and futures contracts. Just remember, like gold stocks you aren’t buying gold, just paper that is theoretically backed by debt or equity of mining companies or futures and options contracts for physical bullion. This means the value of gold mutual funds and ETFs may not entirely match up with the market price of gold, and these investments may not perform the same as physical gold. Another way to invest in gold for beginners is to combine physical assets with traditional stocks.
Chart 3: Gold prices have been calmly rangebound during three years of market upheaval*
If you’re concerned about inflation and other calamities, gold may offer you an investing safe haven. Though in the shorter term it can be just as volatile as stocks, over the very long term, gold has held its value remarkably well. You may also opt to buy gold you can wear—or that someone once wore but has been damaged—in the form of gold jewelry. Investing in gold jewelry, however, carries many risks that investing in pure gold doesn’t.
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If the option expires worthless, the amount paid for the option is lost; risk is limited to this cost. Trading gold options requires a margin brokerage account with access to options.
Some buyers include insurance in their service, such as Alloy Market, which says it provides up to $100,000 worth of insurance on gold shipped to the company. If you need more coverage, you can often work with the buyer to raise the insurance. Generally, gold buyers like Alloy Market and Express Gold Cash will buy gold in multiple forms, from old dental crowns to jewelry to gold coins.
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The most common gold coins weigh one or two ounces, though half-ounce and quarter-ounce coins are also available. Collectible coins, such as South African Krugerrands, Canadian Maple Leafs and American Gold Eagles, are the most widely available type of gold coins.
Any gold dealer—either in-person or online—can assist you in the purchase of physical gold. However, you’ll want to make sure the dealer you’ve chosen is reputable. Gold coins, like the American Gold Eagle or Canadian Maple Leaf, are popular collectables.