How to buy gold

How to safely store gold

Now that you know how to buy gold, you’ll need a safe place to store it. There are several options to consider, including:

• Bullion dealers. Many gold dealers offer direct storage options where you can keep your gold bars or coins for a fee. Explore any storage options available through your retailer when you make your purchase.
• Safety deposit boxes. Rent a safety deposit box at a bank to securely store your gold bullion.
• Secure vault storage. For high-level security, you may want to research vault storage companies near you and the storage options they offer.
• At home. You can also store your gold at home. This may not be as secure as some third-party storage options, so consider installing a home safe. You’ll also need to update your homeowner’s insurance to make sure your policy covers your precious metal.

Why is gold a “safe haven”?

There are several reasons investors view gold as a safe haven:

• Gold is a physical asset.
• It’s not easily created or destroyed.
• It doesn’t change — gold is resistant to oxidation and will look the same hundreds of years from now.
• It has cultural and historical value — gold predates modern currency and has always been seen as beautiful and special.
• Governments have turned to gold in times of financial crisis, which in itself adds to gold’s stability.

Other ways to invest in gold

Outside purchasing physical gold, you can also buy gold by purchasing gold stocks and ETFs.

Gold stocks

Gold stocks are stocks from gold mining companies. You can find some of the largest firms listed on the S&P 500, including Newmont Mining (NEM) and Freeport McMoRan (FCX). Through investing in mining stocks, you’re directly linking your capital to the success of these companies and the changing value and price of gold.
Gold stocks offer the added benefit of potential dividends but also carry additional risks, like geopolitical shifts that impact mining output.

Gold ETFs

Gold ETFs are another option worth considering. ETFs give access to a wide array of assets through a single investment, allowing investors to minimize risk while taking advantage of the performance and popularity of a particular sector — in this case, gold.
Gold miners are already leveraged to the price of gold because their profit margins can be multiplied with ordinary moves in the spot price of gold, but there are also several leveraged ETFs that aim to double or triple the returns of gold miners through the use of options and other derivatives.
But be careful with leveraged ETFs — they are designed for short-term trades, not long-term buying and holding. To achieve their goals, these leveraged ETFs have to be rebalanced every day, so volatile periods of market activity can erode the basis of your investment.

What are gold stocks, ETFs and futures?

Investors who don’t want to take delivery of physical gold or pay to store it in a third-party vault may decide to buy shares in gold stocks or ETFs. Gold stocks and ETFs typically comprise the following:

• Gold mining companies. These companies specialize in the exploration, mining and selling of physical gold. Mining stocks allow you to directly link your capital to the success of these mines and the changing value and price of gold. Many offer the added benefit of dividends.
• Gold-focused ETFs. These funds invest in gold mining companies, physical gold or both, giving investors access to a wide array of assets through a single investment.
• Gold royalty and streaming companies. These companies provide mining companies with capital to expand or develop their projects and, in return, receive a percentage of the mine’s revenue or gold production.

Meanwhile, gold futures let investors speculate on the future price of gold. In general, futures are exchange-traded contracts that obligate a buyer to purchase and receive a predetermined amount of the underlying asset at a future price and date. While companies can use gold futures to lock in gold prices on an expected future purchase or sale, investors may trade gold futures as a way to speculate on the future price of gold without taking physical delivery of the asset. Examples of brokers that offer futures trading include Interactive Brokers and tastytrade.

How to buy gold stocks, ETFs and futures

1. Open an investment account. Compare brokers that offer stocks, ETFs and futures. Also, decide whether to invest via a taxable brokerage account or an individual retirement account (IRA). Before choosing a broker, consider things like features, trading costs and account fees.
2. Research and choose an asset. Decide whether to invest in stocks or ETFs of gold mining companies or gold royalty and streaming companies or if you want to trade gold futures. Not all brokers offer futures trading, so be sure to compare brokers by investment options.
3. Fund your account. Link your bank to fund your trading account.
4. Make your investment. Buy your desired number of shares or invest a dollar amount if your brokerage of choice offers fractional shares.

Top gold ETFs for 2023

Top gold stocks for 2023

Bottom line

If you’re searching for ways to protect your wealth or diversify your investments, gold may be a practical addition to your portfolio. But do your research to make sure you understand how to buy gold, the costs of storage and security, as well as the various investment risks associated with this commodity.

Frequently asked questions

• How much is gold per ounce?

  The spot price of gold changes constantly. Most online gold retailers display live pricing on their websites, but you can also check the spot price of gold by performing a quick Google search.

• How is gold formed?

  Gold is a naturally occurring mineral within the Earth’s core that has been released to the crust through molten lava over the course of history. To mine it, companies have to extract the gold from the other rock and minerals it cooled with.

• How much gold is there in the world?

  The World Gold Council estimates that about 190,000 tonnes of gold has been mined throughout history, with the current pace of about 2,500 to 3,000 tonnes mined each year, and another 54,000 tonnes identified as unmined reserves.

• How much is a gold bar worth?

  Gold bars come in different sizes, but the most common ones are 1-ounce and 10-ounce bars. After reaching a historic high of $2,000 per ounce in 2011, gold fluctuated around $1,300 per ounce from 2016 to 2019, when it rallied up to $1,500 and higher.

• Can I buy gold with a credit card?

  Possibly, but it depends on which dealer you’re buying from. And if a dealer does accept credit cards, be aware that you may face higher fees if you purchase gold with plastic.