Gold climed to a record on November 9, 2010 as inflation worries and on concern that some European governments may struggle to raise funds, continue to lure investors to precious metals. Gold spot price rose to all-time high of US$1,414.60 an ounce, while spot silver hit a new record of US$28.16 since March 1980.
Weakening euro and debased US dollar contributed to the rise of metals, and Gold is expected to rise towards US$1,430 per ounce as the uptrend is steady.
Of all the precious metals, gold is the most popular as an investment due to the wide demands and applications in the jewelry market and electronics industry. Gold’s low correlation with other commodity prices suggest that gold has the features of being money.
Below are some common methods of investing in gold:
· Gold Bars – available in various sizes or weights (E.g.: 10oz, 1oz, 10g, 100g, 1kg, etc.)
· Gold Coins/Bullion Coins – Come in 1oz, 1/2oz, 1/4oz, 1/10oz and 1/20oz sizes.
· Gold Exchange-Traded Funds – Traded like shares on major stock exchanges.
· Certificates – A certificate of ownership that gold owners hold instead of storing physical gold.
· Accounts – Offered by banks where gold can be instantly bought or sold.
· Derivatives – Gold forwards, futures and options which are trade on various exchanges around the world such as the New York Commodities Exchange (COMEX)
· Mining/Precious Metal Recovery Companies – Not representing gold, but are shares in gold mining or metal recovery companies such as Barrick Gold, Goldcorp, Heraeus, etc.
The broad range of investing in gold and other precious metals has given investors more options to diversify their portfolios. However, investors are encouraged to understand the pros and cons of each investment vehicle, before investing in gold and other precious metals.
If you have any opinions or questions regarding precious metal applications and investments, share it with us here, or email me at emailpeterphang@yahoo.com.
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