Gold

Of all the precious metals, gold is the most popular one, as an investment. Investors generally buy gold as a way of diversifying risk, especially through the use of futures contracts and derivatives. The gold market is subject to speculation and volatility, just like other markets. Compared to other precious metals used for investment, gold is the most effective safe haven and has hedging properties across a number of countries.

Why invest in gold?

• Gold Investments are classified as low-risk investment, as gold prices always go up in the long term.
• Investing in gold is more liquid than investments in other forms as it is can be easily liquidated into cash when needed.
• Global acceptance of gold makes it a great investment instrument. 

What are the limitations of investing in gold

• The price of gold is always fluctuating, so calculating the profits that one can expect from investment in gold is not regular or stable. 
• The gold market itself is unpredictable and though the price of gold mostly remains high, there are also times, when the price drops. 
• In case of investment in physical gold, like in the form of jewelry, an investor pays a lot in the form of making charge for the jewelry.

Where to invest in gold?

There are many ways to invest in gold. Here are a few tips on where to invest in gold:

• Purchase gold coins and bars, either to store personally, or to be held securely on one’s behalf by a bank or other financial intermediary. 
• Financial products, which are physically backed with allocated gold bullion and then purchased or sold as shares. With more and more improvement, investors are now offered greater flexibility and accessibility to investors through exchange-traded funds (ETFs) and also additional risk management tools for sophisticated investors.
• Gold accounts can be maintained where gold bullion is stored and managed by a bullion dealer or depository. 
• Indirect investments in gold, via financial instruments, without direct ownership of the metal like gold mining stocks.

An important part of a diversified investment portfolio should have gold. Although the price of gold can be volatile in the short term, in the longer run, it has always maintained its value. Through the years, gold has served as a hedge against inflation, and thus is an investment well worth considering.