Ways to Invest in Gold

From Financial Literacy Wiki

There are many ways to invest in Gold. Below are some of them.

Bars and Coins

Investors can buy products like gold bullion coins and gold bars, of various sizes and weights, as investments. But take note that purchasing coins and bars are subjected to GST and can be quite substantial if you are buying a lot.

Denominations for coins are one ounce, 1/2, 1/4, 1/10 and 1/20 ounce.

When investors sell the gold back to the bank, bank would usually want to make a profit on the prevailing price of gold, so you might get a quote that is lower than the prevailing price.

Banks that sell physical gold are United Overseas Bank and Canadian Bank of Novia Scotia.

Certificates

Purchase of certificates do not incur GST. However, there is an annual administration fee of S$30 per kg of gold.

At UOB, a gold certificate is issued in kilobars which actually means kilograms bars of gold and investor can purchase up to a maximum of 30.

Certificates of Gold can be used as a collateral for loans.

Savings Accounts

Investors who are looking into frequent trading can consider a gold savings account. Starting at a minimum purchase of 05 grams of 999.9 fine gold, you can start trading in units of 01 gram.

Investors records his purchases and sales in pocket size passbooks similar to savings deposits. UOB charges an administration fee that is subjected to the prevailing GST.

Unit Trusts

Investors can invest in unit trusts that invest in publicly listed gold mining firms. Like all investment in unit trusts, it is subjected to annual management fees.

Exchange Traded Funds (ETF)

For retail investors, an ETF is a convenient way to buy gold with modest sums and at no other charges like storage and insurance. An ETF is listed on the stock exchange and traded like stocks

Mining Stocks

This investment instruments allow investors to directly invest in shares of mining firms. However one can be exposed to more risk such as management risk, technological risk and many more. Such investment has to be assessed as a business as well.