Gold: King of Commodities Investments

Out of all the investment option available, gold is single, easier and safest to invest in. Physical gold is easy to buy, requires no upkeep, and great deal of wealth can be secured and stored in relatively trivial volume. Investment in gold is always welcomed by the analysts mainly due to depreciation of currencies and inflation. Investment in gold can be treated as hedging against inflation. Looking at stock exchanges gold is performiong very well as compare to debt instruments. It has been giving good returns of around 15%-25% covering on year to year basis. For short term, it may not be a better investment avenue but if one thinks for long term, gold can be a better investment avenue. If we take currencies, gold has increased 31% in terms of yen, 16% in terms of dollars.

Gold shares can be owned through mutual funds or stocks of gold mining companies. But after introduction of Gold Exchange Trade fund (Gold ETF) by World Gold Council across the world, trading on bullion market has become effective and it is now easier to own gold shares. These Gold ETFs are available in the stock exchanges called Gold Bullion Securities. Each share of gold securities will be equal to 1/10^th of an ounce of gold and is supported by physical holding of gold in the custody of HSBC. Presently, these gold securities are the most efficient way of investment in gold. Only 0.3% management fees has to be paid towards insurance and storage including brokerage charges.

As volatility is always there with this metal, one can purchase it to invest for future once the price come down. Few analyst believe that after touching the specific price the value of gold will fall. But on other hand, few believes that price will increase to such a level where it ordinary person will find difficult to buy gold. So even if one buys now he is not going to lose anything. Gold will remain bullish in times to come and one can diversify one’s portfolio towards gold.