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How to Invest in Gold
Once you know what type of gold investment you are interested in (see Types of Gold Investments), how do you go about it? Bullion and coins can be purchased through local and online dealers. Mutual funds, ETFs, and stocks are traded through brokerages either online, by phone, or through local offices. And gold accounts can be purchased directly through the offering companies.
When purchasing coins or bullion from any source it is necessary to know the current spot price of gold. The spot price can readily be found at Kitco or TheBullionDesk. Expect to pay a small premium over the spot price. You'll want to get some quotes from various sources. Make sure to include any taxes, shipping and handling, and shipping insurance charges (if any). Also be sure to compare apples to apples; U.S. Gold Eagles will have a greater premium than Krugerrands, for instance, since they are considered more collectible. Some online coin dealers that are frequently recommended include: Tulving.com, ColoradoGold.com and WexfordCoin.com. There are many more possibilities. To find a coin dealer near you: http://www.coininfo.com/User/index.php
Mutual funds, ETFs, and gold mining stocks must be bought and sold through a brokerage or a direct account with a mutual fund company. Discount brokers offer the lowest commissions and allow you to make your own investment decisions. Popular discount brokers are E*Trade, TDAmeritrade and Scottrade.
There are numerous gold mutual funds. If you already have an account with a company like Vanguard or Fidelity, they have their own gold funds. With a brokerage account most mutual funds will be available for investing. Remember that gold and precious metal mutual funds usually hold a basket of mining stocks, not bullion. Because they are diversified, you get some of the benefits of investing in mining companies without all the risks. Also, there is a gold mining ETF: Market Vectors - Gold Miners ETF (GDX). The performance of GDX is designed to track the Amex Gold Miners Index.
The bullion ETFs are: streetTRACKS Gold Shares (GLD), iShares COMEX Gold Trust (IAU) and PowerShares DB Gold Fund (DGL). The first two represent actual bullion, the Powershares ETF represents gold futures.
Finally, there are hundreds of listed gold mining stocks one could invest in. Looking at the components of the Amex Gold BUGS Index (HUI) is a good place to start. BUGS is an acronym for Basket of Unhedged Gold Stocks. The components can be found here. The forums at Kitco and Gold-Eagle are a good place to see what mining companies others are currently interested in.
Gold Accounts. BullionVault is widely recommended for owning physical gold in a vault in the location of your choice; New York, London, or Zurich. Kitco comes recommended as a means of holding gold in a pool account. You'll own a defined amount of gold but not specific coins or bullion. Both of these companies welcome the small investor.
Though there are a world of choices, it's not really as complicated as it might seem. You can simply pick up your yellow pages find a couple of local coin dealers and see which one has the best prices. The next simplest way to invest in gold is to call your broker or open an online brokerage account and buy some shares of a bullion ETF.
Disclaimer: This is for educational purposes only and is not meant as financial advice. Please consult a Financial Advisor before making any investment decisions.