August 10 2020

The Ultimate Beginner Guide on How to Invest in Gold

Investing in gold is a very straightforward process. Those new to the investment market may find it challenging to determine when and how to invest in gold. However, investing in gold is an excellent option, and you should definitely include it in your investment portfolio. To help you make the most out of your gold investment, we’ve brought to you this detailed guide on how to invest in gold.

Why you should invest in Gold?

Gold has withstood the test of time to remain a valuable precious metal. Throughout history, gold has had many uses, including jewelry, decoration, creation of monuments, and as coins for trade in ancient times. Its scarcity made it incredibly valuable, and thus it was used to back up currency until the 20th century.

Today its most widely known uses are in the jewelry industry and as an investment option, and now is the perfect time to invest in gold as experts around the globe predict the price of the metal will continue to appreciate in the next few years, according to a recent report by Bloomberg.

No investor wants to incur a loss on their investment, and the precious metal investment (e.g. gold and silver) is the way to minimize losses. It is a must-include investment that can also help diversify your investment portfolio. In fact, it also serves as insurance for your investment portfolio.

There is a certain amount of money you take a risk with, and then there is a set amount that you invest as a security for your riskier investments. Investment in gold can be that security, as it’s a reliable store of value that has not only managed to retain its value throughout history but also increase over time. It is a universal currency whose value is recognized, and its’ worth is accepted globally.

In fact, making timely gold investment decisions can drive promising profits provided you know the market and invest right. In this guide, you will find everything you need to know about investing in gold.

How to Invest in Gold?

Invest in gold

There are multiple ways you can invest in gold thanks to the various uses of the metal. The main investment options are physical gold, bullion, or jewelry.

What are the Options of Investing in Physical Gold?

Physical gold can take many shapes and forms. Here we will discuss each of them in detail.

Gold Jewelry

Jewelry is the most common use of gold. In fact, the jewelry industry uses about 49% of gold produced worldwide. It may not be the best option for investment in gold, but it is one nonetheless. You can purchase it as a gift for yourself and your loved ones and sell it when the going gets rough.

Gold jewelry comes with a substantial markup that can go up to 400%, one the underlying gold value. If you do want to invest in jewelry, then you can look at options where the markup cost is lower.

Be mindful of the fact, though, that when you sell jewelry, the purchaser will cut workmanship charges or the markup. You can search for buyers who partially return the workmanship cost, but you are essentially earning a little less profit.

Gold Bullion

Bullion is an umbrella term that includes gold coins, bars, etc. The gold in bullion is almost entirely pure. Bullions come with a stamp that certifies its weight and purity levels. In some cases, the stamp contains a serial number that manufacturers include to secure the asset.

Don't put all your eggs in one basket. If you are thinking of investing in bullion, our investment experts recommend that you start small. Buying a gold brick/bar is appealing, but it is also harder to sell. If you decide to buy one big bar with all your savings, then you will have to sell it altogether too.

Smaller bars or ingots give the investor more flexibility in liquidizing their gold, making it easier to sell as they please. It is, also a better option for investment than jewelry as it avoids the extra markup cost that you end up paying for jewelry.

Gold Coins

Gold coins are another popular investment option. They are mainly available in 21K gold. Minted gold coins are widely produced all over the world in different sizes and shapes. However, it’s always recommended to get your minted coin from certified retailers that offer hallmarked coins as they hold guaranteed value.

Gold coin is the middle ground between wearable jewelry and investable bullion, since its low workmanship ensures profitable return, yet it’s still wearable as pendants and works as a great option for investable gifts.  

How to invest in gold like a pro?

Choosing the type of gold that you can invest in is essential. Yet, there’s a number of other factors that influence the gold and silver prices and that you should bear in mind before you make any investment-related decision.  

Keep an Eye on Global Events

Watch out for global events that can impact the gold industry – the COVID19 is a prime example of a global event that created substantial fluctuations in the gold prices, reaching record-high levels.

As an investor, you must always watch out for events that bring down the price of gold so you can purchase more. The idea here is to minimize costs and maximize profits. However, know that when at a low, gold takes a while to rise as it is not a very volatile market when compared to other investment assets.

Avoid Unstamped Gold

Often new investors turn to unstamped products as they may be available at a cheaper price. No matter how good of a deal you may be getting, buying unstamped gold from unreliable retailers is never recommended. The stamp is what guarantees the purity of your purchased gold items. Also, bear in mind that it’s easier to sell back stamped gold as the source is well known within the bullion industry.

Follow Investment Reports

Watch out for investment reports that are published by official and reputable institutions such as the World Gold Council and Bloomberg. Gold tends to store its value and it’s an ideal long-term investment, but keeping up with expert reports and forecasts will give you an outlook on the future so you can make more informed investment decisions. For instance, one of the recent reports of Goldman Sachs predicted that Gold will hit an all-time high, reaching $2300 per ounce in 2021, up from its currently predicted price for this year, i.e. $1,836 per ounce this year.  

Keep up with the Technology

Amid the pandemic with the entire globe was facing uncompromisable lockdown, not many could go and purchase physical gold. Thus, digital bullion trading stood out as the perfect investment choice. Digital trading platforms allow investors and traders to make timely investment decisions, with the whole gold investment system at their fingertips.

To ensure the most convenient experience for its users, BTC is offering two digital platforms for gold trading. The digital trading option has made investment easier and accessible for everyone. One of these platforms allows investors to trade digitally in physical gold and the other relies mainly on digital certificates for traders. Check them out here.

Set a Clear Investment Option

Nothing can go right without a clear plan. As an investor, you will have to make sure you invest in the right gold products at the right time. But also you have to set a clear objective of what you try to achieve through your investment.

Make sure you take into account the purpose of the purchase, whether you want to buy and store gold to benefit from its long-term return or trade timely to make the best out of its fluctuations. No approach is better than the other, it’s the return that you try to achieve is what matters, and based on which you should make the right investment decision.

In all cases, you should bear in mind that experts typically recommend that you diversify your investment portfolio. Since gold is the safe haven, you should consider dedicating a minimum of 20% of your investment portfolio to gold.

Is Investing in Gold Smart?

Simply put, yes it is. Gold holds a special place in the Middle Eastern culture and plays an essential role in its economic growth and development. It is also one of the most popular investment options in 2020.

It is an ideal investment option for beginners who are looking for a reliable investment option, with minimal risk. It also offers a variety of investment options making it easier to diversify the investment portfolio even within the gold category.

If you are ready to kickstart your gold investment, check out the investment solutions provided to you by BTC. Learn more about these solutions that vary from physical and digital trading here.