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After reaching a new all-time high of over $2,600 per ounce yesterday, gold prices have continued to surge. Less than 24 hours later, the price of gold is now sitting at nearly $2,660 per ounce. That may seem surprising, given that gold is typically a long-term investment, but the precious metal has hit numerous record highs so far this year, with gold prices up nearly 29% year-to-date. In turn, gold has become an increasingly attractive asset for investors.
If you’re considering joining the gold rush, this may seem like the ideal time to get in on the action — and it certainly could be. After all, some investors who bought in earlier this year have seen their gold value increase by hundreds of dollars per ounce so far. But before you buy in, you should understand that there is a range of gold assets to consider, each with its own unique set of risks, rewards and logistical considerations.
Given the differences between these assets, some gold investments may be more advantageous than others, especially in today’s unusual gold market climate. So what gold investments make the most sense right now? Below, we’ll detail three specific ones.
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Gold’s price is still climbing: 3 gold options to consider now
The following gold assets may be worth a look if you’re planning to add gold to your portfolio soon:
Gold bars and coins
Gold bars and coins are one of the purest forms of investment in the precious metal, offering direct exposure to gold’s price. When the price of gold rises, so too does the value of your physical gold holdings. Investing in physical gold offers several advantages in the current market, including:
- Direct ownership: By holding physical gold, you have complete control over your assets, free from counterparty risk associated with paper gold investments.
- Liquidity: Physical gold is considered a liquid asset. As gold prices soar, the liquidity of physical gold comes in handy, as it’s easy to buy and sell in various quantities.
- Potential for premium appreciation: Certain gold coins, particularly those with numismatic value, may appreciate beyond the spot price of gold, offering additional upside potential.
That said, you should be aware of storage and security considerations, as well as potential markups over the spot price, before purchasing physical gold. But even with these factors in mind, the tangible nature of gold bars and coins could make physical gold a smart bet if you’re looking for a direct stake in the gold market.
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Gold stocks
If you’re seeking exposure to gold’s price movements but don’t want to deal with the hassle of physical gold storage, gold mining stocks present an intriguing option. As gold prices climb, many gold mining companies experience significant boosts to their profitability and stock prices. Investing in gold stocks could offer several potential benefits in the current gold bull market, including:
- Leverage to gold prices: Gold mining stocks often provide leveraged exposure to gold prices, potentially outperforming the metal itself during bull markets.
- Dividend income: Unlike physical gold, many gold mining companies pay dividends, offering a stream of income in addition to potential capital appreciation.
- Ease of trading: Gold stocks can be easily bought and sold through most brokerage accounts, offering greater convenience than dealing with physical gold.
- Mergers and acquisitions: Higher gold prices can fuel industry consolidation, potentially benefiting shareholders through strategic mergers and acquisitions.
Before you invest, though, it’s important to understand that gold stocks carry company-specific risks and they may also be more volatile than the price of gold itself. Still, the potential for outsized returns makes gold stocks an attractive option worth considering.
Gold ETFs
If you’re seeking a balance between the direct exposure of physical gold and the convenience of stocks, gold exchange-traded funds (ETFs) offer a compelling middle ground, allowing investors to buy shares in a fund that either holds physical gold or tracks the price of gold-related assets. Gold ETFs present several advantages in the current market, including:
- Ease of access: Gold ETFs can be bought and sold like stocks, making them accessible through standard brokerage accounts.
- Lower costs: Compared to buying and storing physical gold, many gold ETFs offer a more cost-effective way to gain exposure to gold price movements.
- Liquidity: Gold ETFs typically offer high liquidity, allowing you to enter and exit positions quickly as market conditions change.
- Diversification: Some gold ETFs provide exposure to a basket of gold-related assets, including physical gold, gold futures and gold mining stocks, offering built-in diversification.
- Fractional ownership: ETFs allow you to gain exposure to gold with smaller amounts of capital, making it easier to fine-tune portfolio allocations.
Before investing, though, make sure to look into any ongoing management fees and the potential for tracking errors relative to the spot price of gold.
The bottom line
Gold’s recent record-breaking prices have made it even more of an attractive investment asset to consider and with the price of gold showing no signs of slowing down, it could be the perfect time to add some gold to your investment portfolio. There are plenty of opportunities to profit from this ongoing rush, too, whether you prefer the security of holding physical gold, the potential for greater returns with gold stocks or the flexibility and convenience of gold ETFs.
