If you’re interested in gold investment, there’s a lot of ground to cover. For one, you probably don’t want to deal with extra storage and vendor fees, which gold investment tends to lead to. Instead, you may want to consider ways to invest in gold without storing it.
Fortunately, there are a ton of ways to do so. Examples include ETFs, mining stocks, and even the ability to buy stablecoins like Gold Coin— a cryptocurrency tied to the value of gold. This guide will go over all of these methods and more, so get ready!
Gold Mining Stocks
Gold mining stocks are the simplest ways to profit off gold without physically holding it. Stocks like these include but are not limited to groups that mine gold and gold-related companies. By investing in these companies, you’re not adding anything to your physical portfolio. You’re simply investing in another stock — one with a price that more or less correlates with gold’s ups and downs.
However, it’s worth noting that this method does not directly correlate with gold’s price. For one, gold miners might go on strike at a particular company, significantly affecting the stock price. A group could run into a gold shortage or have political tensions with another country. The metal price might go up or down, but the stock price isn’t guaranteed to follow. There are times it will, and times it will not. Understand this before investing in mining stock.
A gold exchange-traded fund (ETF) allows you to benefit from gold’s price increases without actually holding it. Examples of a gold ETF could be a future or derivatives contract. Depending on the fund, you may profit off of the performance of a group of gold-related stocks. Others hold gold in a Trust, and you earn based on others investing in said gold.
What’s great about gold ETFs compared to traditional investments is how simple they are. You can invest in one of these funds from your phone or computer, for instance. Plus, if you want to invest in physical gold, you can often convert these investments into bullion. There’s a lot to like, here!
As mentioned, some cryptocurrencies on the market are tied to the value of gold. In this case, we’ll use Gold Coin as an example.
Gold Coin is Ethereum-based crypto with every coin tied to 1/1000th an ounce of pure gold. You can instantly buy Gold Coin online without verifying your identity to anyone. All purchases are anonymous.
The gold is audited monthly for legitimacy’s sake, proving that the company has such holdings. That, and any Gold Coin can be redeemed for physical gold down the line if you’d prefer. At that point, you would need to reveal your identity and find a place to store it, however. So keep that in mind.
This is an extension of ETFs. If you’d like, you can focus purely on gold derivatives, as in betting on the future price of gold.
When setting a derivative, you’re asking to buy a certain amount of gold at its current price but a future date. So if gold is at a reasonable price now, but you expect the price to skyrocket in a few months, you would set a contract for that date. If the price does rise, you’re still owed gold at the price it was a few months ago. That way, you profit significantly.
From there, you can sell the contract, so you don’t have to acquire any gold. It’s a bit of a risky bet and not ideal for beginners. Instead, if you’re new to gold investment, try some of the methods mentioned above first. Then, when you have some experience under your belt, try out derivatives.