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But while investing cash in a lustrous gold bar, coins or jewellery can be very alluring, it means your savings can present a security headache if you are keeping treasures at home.
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Mining gold for its investment potential http://metro.co.uk/2013/05/20/mining-gold-for-its-investment-potential-3800712/
Demand for gold jewellery has risen 12 per cent around the world in the first quarter of the year according to the World Gold Council’s trend report published today. But while investing cash in a lustrous gold bar, coins or jewellery can be very alluring, it means your savings can present a security headache if you are keeping treasures at home.
Investing in gold can be surprisingly easy for the ordinary punter, but it’s worth remembering that gold’s trading price is very volatile. Gold prices in the UK have dropped around 10 per cent over the last year, but its value has grown by 94 per cent over the last 5 years, according to goldprice.org. But the ups and downs don’t seem to be putting people off buying the yellow metal. Sales of of American Eagle Gold Coins rocketed in April for example according to the US Mint, despite recent price instability. Buying bullion or gold bars, purchasing coins such as krugerrands, or investing in the gold mining industry through share funds are just some of the ways to invest. Adam Laird, Passive Investment Manager at Hargreaves Lansdown said: ‘Investors need to weigh up the features of each method when adding gold to a portfolio. ‘Coins and bullion are more expensive. The cost of the coin is currently around 5 per cent higher than the price of gold. In addition investors also have to consider storage and delivery costs and risk loss or theft of the coin. ‘Some fund managers invest in gold miners and commodity companies. These funds have generated profits for investors, but investing in these funds does come with additional risks. Gold mining equities are often more risky than the metal itself.’
Bullionvault.com allows you to buy physical gold and store it in vaults in London, New York, Zurich or Singapore, which means that you do have to pay a premium to cover insurance. It allows ordinary investors to access the market and buy part or a whole bar, depending on how much you want to invest, although the site recommends a minimum investment of 2000 US dollars to make storage costs economical. Exchange Traded Commodities (ETCs) funds can be bought through a stockbroker for around £6 commission. They are designed to track the performance of a single commodity. The annual charge on many ETCs is under 0.5 per cent which includes storage costs.
ETF Securities Physical Gold (PHAU) is a physical gold ETC with metal being held by HSBC. It is one of the largest products listed on the London Stock Exchange, with over 6.5Bn US dollars worth under management. It has a management fee of 0.39 per cent. Blackrock Gold and General is a fund which invests in gold companies. Gold Coins can be bought from high street stores such as Scoin shop or through websites. The Scoin Shop recently agreed a deal with the British Royal Mint to sell 1000 Titanic £25 denomination, 22ct gold coins valued at around £1000 per coin. Shop founder and international bullion expert Alan Demby, said: ‘There is an increased demand for high value coins at the top of the market and we are seeing buyers taking a more equal mix of bullion and collectables as part of their investment portfolios. ‘Ccollectable coins are popular because they are produced in limited numbers and have the potential to hold and increase in value.’
