Gold is the most popular precious metal to invest in. Gold is what’s known as a “safe haven asset” where investors buy-in as a way of diversifying risk, especially through futures contracts and derivatives. Like other markets, gold is subject to speculation and volatility.
Compared to other precious metals, gold has the most effective safe haven, with hedging properties across a number of countries. Investors turn to gold in times of market turmoil and can also make a type of indirect investment in gold by buying shares of mining and related companies that focus on gold production. The traditional method of investing in gold itself is by buying bullion gold bars, either from a bank or dealer.
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Gold coins are also a common way of buying gold and bullion coins are prices according to their fine weight. Gold futures, forwards and options are derivates that trade on exchanges around the world and over the counter (OTC) in the private market. The New York Commodities Exchange (COMEX) is where gold futures are mainly traded in the US, as well as Euronext.liffe. In India, gold futures are traded on the National Commodity and Derivatives Exchange (NCDEX) and Multi Commodity Exchange (MCX).
Until modern times, the gold price was the standard measure for currency equivalents, specific to economic regions or countries. That was until the US dollar became the standard in the 1970s. The price of gold is largely determined by central banks and the International Monetary Fund, who held 19% of all above-ground gold as official gold reserves. Two-thirds of annual gold demand goes toward jewelry, followed by industrial, dental and medical uses. Gold also has high electrical conductivity and thermal properties, as well as a high resistance to corrosion and bacterial colonization.
Gold Miners
Barrick Gold (
ABX)
Newmont Mining Corp. (
NEM)
AngloGold Ashanti (
AU)
Kirkland Lake Gold Ltd. (
KL)
Kinross Gold Corp. (
KGC)
Royal Gold, Inc. (
RGLD)
Agnico Eagle Mines Ltd. (
AEM)
Eldorado Gold (
TSX:ELD)
Alacer Gold (
TSX:ASR)
Auryn Resources (
TSX:AUG)
New to investing in Gold? Check out Stockhouse tips on How to Invest in Gold Stocks.
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