5 simple ways to buy and sell gold in 2024
There's no question that the investing landscape can change quickly — and without much notice. All it takes is one unexpected event, like a global pandemic or a geopolitical conflict, to have a big impact on the market, and when that happens, it can have a devastating impact on the value of the stocks or other traditional investments in your portfolio.
Given how quickly the investing atmosphere can change, it makes sense that investors often turn to alternative investments to try and diversify their portfolios and safeguard their wealth. One popular alternative asset is gold, a precious metal that has retained its value throughout history, making it a smart option for reducing portfolio risk.
Gold investing hit an 11-year high in 2023, thanks in large part to the unique benefits investors can glean by adding it to their portfolios. And, this year, buying and selling gold is also more accessible than ever, thanks to a variety of buying and selling options that cater to different preferences and financial goals.
Start exploring your gold investing options online here.
5 simple ways to buy and sell gold in 2024
There are several easy ways to invest in gold this year, including:
Physical gold
The classic way to invest in gold has typically been to purchase physical gold — which is generally sold in the form of gold coins or bars. This method allows investors to own a tangible gold asset that can be stored securely.
Many reputable dealers offer a variety of gold products, ranging from small coins to 1-gram and 1-ounce gold bars or larger gold bars. But while physical gold provides a sense of security due to its tangible nature, it's important to be mindful of storage costs and the potential challenges of liquidating physical assets quickly if you want to take this route.
Find out what your top gold investing choices are today.
Gold stocks
If you're looking for exposure to the gold market without directly owning physical gold, you may want to consider gold mining stocks. Gold mining companies are involved in exploration, extraction and production of gold, and their stock prices are influenced by the performance of the gold market. While this option introduces additional risks associated with the mining industry, it also provides the potential for capitalizing on the growth of gold prices and the profitability of mining operations.
Gold exchange-traded funds (ETFs)
If you're seeking a more liquid and easily tradable form of gold investment, gold ETFs can be an attractive option. ETFs are investment funds traded on stock exchanges, representing ownership in underlying assets (in this case, gold).
You can buy and sell shares of gold ETFs just like stocks, which is a flexible and cost-effective way to gain exposure to the precious metal. However, it's crucial to carefully research and choose reputable gold ETFs to ensure the security and legitimacy of the investment.
Digital gold platforms
Digital gold platforms recently emerged as a convenient way to get involved with gold. These platforms allow you to purchase and sell gold or fractional amounts of gold through an app or online platform, making it accessible even to those with smaller budgets.
However, if you take this route, it's essential to choose platforms with secure storage options and transparent pricing structures to ensure a trustworthy digital gold investment.
Gold futures and options
If you're an experienced investor who's willing to engage in more sophisticated financial instruments, gold futures and options can be a way to speculate on the future price movements of gold. Futures contracts involve an agreement to buy or sell a specified amount of gold at a predetermined price and date in the future, while options provide the right (but not the obligation) to buy or sell gold at a predetermined price.
These financial derivatives require a deep understanding of the market and carry higher risks, so they are typically more suited to seasoned investors who are comfortable with complex financial instruments.
How to decide which option makes sense for you
Choosing the right method to buy and sell gold depends on various factors, including your financial goals, risk tolerance and investment preferences.
Investment goals
Consider your primary investment objectives. If you're looking for a safe-haven asset to hedge against economic uncertainties, physical gold may be a suitable choice. For those seeking potential capital appreciation, gold mining stocks or financial instruments like futures and options might align better with growth-oriented goals.
Risk tolerance
Evaluate your risk tolerance before diving into the gold market. Physical gold is generally considered a lower-risk option, providing a more stable tangible asset. On the other hand, gold mining stocks and financial derivatives can be more volatile, appealing to investors comfortable with higher levels of risk.
Liquidity needs
Assess your liquidity needs and how quickly you might need to access your investment. Physical gold can be less liquid and may require time to sell. If liquidity is a priority, ETFs, digital gold platforms or financial instruments like futures and options can offer more immediate transaction capabilities.
Costs and fees
Take into account the associated costs and fees of each investment option. Physical gold may incur storage and insurance expenses, while ETFs and digital platforms might have transaction fees. Understanding the overall costs involved will help you make informed decisions about the most cost-effective approach.
Knowledge and experience
Evaluate your level of knowledge and experience as well. Novice investors might find physical gold or ETFs more straightforward, as they are less complex compared to trading stocks or engaging in futures and options markets. Experienced investors may be comfortable exploring a broader range of options.
The bottom line
Whether you prefer the security of physical gold, the convenience of digital platforms or the potential returns from gold-related financial instruments, there are options to suit various investment preferences right now. As with any investment, though, it's crucial to conduct thorough research, consider your financial goals and risk tolerance, and, if necessary, seek advice from financial professionals before making any decisions.
