Please note, the following are just some of my personal comments on gold. I am not an investment adviser. I do hear alot of confusion about gold in general.
I believe one of the best ways to invest in gold is thru an ETF such as Streetracks GLD or iShares IAU. Commodity ETFs are listed on the stock exchanges and offer investors
exposure in the underlying commodity such as gold without taking physical delivery. Gold ETFs buy a matching amount of gold from the market to keep in bank vaults. You buy the share at typically 1/10 the spot price.
I feel that all these other gold offers are waste of money, e.g. gold coins come with high fees, it also costs money to insure.
Please don’t go crazy with gold, I’m personally keeping it less than 15-20% of my portfolio. Be careful, gold does has volatility, as we have seen in recent weeks. I’m keeping only as a long term hedge against dollar depreciation.
Gold prices has actually dropped in recent weeks as investors have covered losses and many feel that demand for gold will decrease as we may go into recession. Industrial use of gold is still a big gold user, e.g. gold plated electronics connectors.
In recent weeks, investors big and small have been liquidating gold to cover margin calls/losses on Wall street, here’s an article on this.
ETFs have made gold an even more liquid asset, more on this on article on “The Street” on how gold has become more correlated with the market in recent years.
