The long-term uptrend in gold has reached a new peak this week. With a lot of momentum has the gold price in $ / Oz from the psychologically important 1000 mark, and has risen from about $ 1,040. However, it seems more likely the cause of the weak U.S. dollar and less to the high demand for gold was his. Whatever.
The bull market in gold that has definitely ignited the second phase. In this phase, the general public on the upward trend is aware, it created many new products, which (should) benefit from the upward trend. However, one encounters the trend with caution and skepticism. The mass increases the upward trend now was to act but not thereafter, and is not invested. Who in your circle of friends for gold in the safe or in the yard?
I am often asked how one can invest in gold and as such, the different variants of each other. High time to write an article that had been in my head “floating around”. But first a preliminary remark: This is not a recommendation to buy or sell gold! Please read again the disclaimer on finance blog. An article like this can not replace a conversation with an investment advisor. He helps you but you prepare well and to ask some critical questions … But now the gold investments:
(Click image for full size)
(Click image for full size)
This graphic shows the “investment pyramid” for gold. There is a distinction between insurance, investment and speculation. Every investor should be able to answer clearly why he thinks of a gold-buying. Where’s a protection for hefty crises, a nest egg? Aim is to profit with a medium buy-and-hold strategy of an uptrend? Or he is looking for quick capital gains with such risks? Let’s look at all options in detail:
Physical gold ingots
The classic. Gold, in sizes from 1 gram to 1 kilogram. The TV is often seen in the 12.5 kg gold bars are not an official delivery size. It participates with gold bars 1-1 in the price of gold. Anyone who can deliver the ingots, paid the delivery fee. These can be quite different from bank to bank. It is important to note that gold to the U.S. dollar has a very low correlation, which is almost a mirror image runs. So who in EUR or CHF thinks must think, will secure the top of the U.S. dollar currency risk. The safe storage of gold can also be a challenge.
Physical gold: coins
Krugerrand is probably one of the best known and most often “used” gold coins. It is available in sizes from 1 / 10 up to a whole ounce (Oz). Other well-known gold coins: Maple Leaf, American Eagle, Australian Nugget, etc. Even with these coins to Take 1-1 participated in the gold price. It should be noted that the spread between buying and selling rate varies and can sometimes be substantial, eg the Vreneli. This is not about collector coins (numismatics) and you do not pay the premiums.
Physical gold: metal account
Those who invest in physical gold, but does not want to take care of delivery and storage, is really a bank account with the metal. Again, the gold price is mapped 1:1. You pay no delivery charges, for an account management fee. Since this is an account at a bank, you should put on the creditworthiness of the bank into the picture.
Physical Gold: custody
In this variant, which is physically at the custodian bank gold deposited booked into the custody of the investor. Important (and good): the direct investor in the gold deposit and not a paper claim against gold (see below) has. The advantage is that the gold held as an investment and investment in reporting and analysis can be shown accordingly. Usually generated also for this variant custody fees. It participates 1:1 on gold price.
Paper gold ETF and gold certificates
In this variant, the investor does not own the gold directly but rather shares in a (physical) gold fund (ETF), or claims against the issuer of the certificate. For certificates, that raises the question of credit quality and rating of the publisher. Since the financial crisis and the collapse of Lehman Brothers a hot topic. It participates very strongly, if not 1-1 in the gold price, has finally “only” a claim. Suitable as an investment, not as insurance (see chart above).
Paper-Gold: Gold ETC
ETC stands for Exchange Traded Commodities. A commonly seen example of a certificate with appropriate counter-party risk. This is in contrast to investment funds, such as a gold ETF, where the gold is held as a fund off the balance sheet. ETC and certificates are taboo for me.
Paper-Gold: (blue chips)
Frequently asked question: gold or gold stocks? I stand by my opinion: both! But you have exposure to gold stocks (such as Newmont, Barrick) clear lead as stocks. They behave more like stocks and less langfrisig like gold. Or some “Chinese-fold: the investor buys equity risk and equity risk correlations and not gold. In selecting you have to make my opinion on a wide diversification (Gold Mine Fund) and an idea of hedging activities (Exciting Example: Barrick) do. An example of a broad index of gold stocks can be found here.
Paper Gold stocks (small caps)
Gold stocks with small and medium market capitalization are listed in the chart above clearly as speculation. It will thus not insure against crises rather hefty looking for the quick capital gain. Often looking to make gold mining stocks, which can cover the rising price of gold suddenly their production costs. It is expected that they receive according to this production. Any further increase in the gold price increases the revenue and profit of the company. Gold-side values are therefore often somewhat sloppy with gold warrants compared.
I hope this rough guide you to help you. I can not go into all the details and I have therefore concentrated on a brief description of each variant. Your comment interests me (as always) and if you can find it well … why not even mail a “buddy” …?
Paper-Gold: (blue chips)
Frequently asked question: gold or gold stocks? I stand by my opinion: both! But you have exposure to gold stocks (such as Newmont, Barrick) clear lead as stocks. They behave more like stocks and less langfrisig like gold. Or some “Chinese-fold: the investor buys equity risk and equity risk correlations and not gold. In selecting you have to make my opinion on a wide diversification (Gold Mine Fund) and an idea of hedging activities (Exciting Example: Barrick) do. An example of a broad index of gold stocks can be found here.
Paper Gold stocks (small caps)
Gold stocks with small and medium market capitalization are listed in the chart above clearly as speculation. It will thus not insure against crises rather hefty looking for the quick capital gain. Often looking to make gold mining stocks, which can cover the rising price of gold suddenly their production costs. It is expected that they receive according to this production. Any further increase in the gold price increases the revenue and profit of the company. Gold-side values are therefore often somewhat sloppy with gold warrants compared.