Recently a lot of people have been saying that now is a good time to own gold given the shaky economy and how much money the US government has spent on the stimulus and bailout packages.
Some of it might be based on fear but historically gold has been able to preserve its value while a country’s currency is losing its value. With the price of an ounce of gold climbing over the $1,200 mark, more people are taking notice of it.
Even with the new record highs set by gold prices, there are many gold investors that are referred to as “gold bugs” who feel it can still go higher and eventually pass the $2,000 mark.
However not everyone that buys gold is hoping for a great return. Some people use it as a safeguard and put a portion of their investments or savings into gold since they are afraid that the US dollar may become weaker due to the economic policies and amount of national debt.
Although as an investment and not an inflation hedge, the returns on gold could be considered decent for the past decade. For the last 10 years, the average annual return on gold has been around 11%.
For those that wish to purchase or invest in gold there are several ways. Some people invest their money into the stocks of gold mining companies as a way to indirectly invest in gold.
However this may not be best strategy for investing in gold. This is because the value of gold mining companies is dependant on whether or not they actually find gold. Plus you are putting your money on the ability of the CEO and the other executives that run the company.
A better alternative might be purchasing shares of a gold ETF or index fund such as the SPDR Gold Trust (NYSE:GLD). These funds are designed to track the price movement of gold closely. A single share of GLD is worth about 10% of an ounce of gold.
However the price movements of gold ETFs are not 100% exact compared to the actual change in the spot price. For example, the price of gold can increase 2% on a day while the gold ETF may only go up 1.5%.
Another thing is that to many people, owning electronic shares of a gold fund isn’t quit the same as having actual gold you can feel and touch. This is why many prefer to actually own gold bullion physically in coins and bars.
Each since the year 1986, the United States Mint has been producing gold bullion coins known as American Gold Eagles. These coins come in four sizes, 1 oz, 1/2 oz, 1/4 oz and 1/10 oz with the quality of the gold being guaranteed by the US government. They have been in high demand every since they were being minted and are one of the most popular gold coins in the world.
Other countries also mint their own gold bullion coins as well. Some of the popular ones are the Chinese Gold Pandas, the Canadian Gold Maple Leafs, the South African Kuggerr and Austria’s Philharmonic.
A good place to purchase America Gold Eagle coins and other gold bullion online is through American Precious Metals Exchange (APMEX for short). They are one of the nation’s largest precious metal dealers with prices often being among the lowest.
Aside from gold, APMEX also sells silver bullion, platinum, palladium and fine collectible coins. The company also offers many bullion coins that are minted by other countries, with a large selection to choose from.
