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Best ways to invest in gold?

ended 24. October 2024

With the gold price hitting a number of all-time highs over the past week or so, many investors may be tempted to pile into the yellow metal. There are so many ways to invest in gold, from funds and ETFs to mining stocks and buying physical gold. What, in your view, is the best (e.g. most cost-effective, liquid or simplest) way to invest in gold and other precious metals for everyday investors? And what % of a portfolio should be invested in gold and other precious metals in your view — a small satellite holding as a hedge or, in these volatile times, perhaps more? Any thoughts, whizz them across.

3 responses from the Newspage community

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Our prefered method and a great way to access an exposure to gold is through a Physical Gold ETF. Miners tend to be pretty tightly correlated to the actual metal price but bring in additonal equity risk dynamics, so as a more pure play a Physical Gold ETF works very well. As for allocation, that will obviously depend on the risk appetite of the investor but we actually use gold as a cross-over asset for both an alternative to equities and bonds and hedging asset. We have held as much as 6% in the ETF this year but now sit at around 4%.
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Gold's glittering at all-time highs, but here's a nugget of wisdom - when it comes to precious metals, physical possession is nine-tenths of protection! In these uncertain times, having actual gold you can hold beats paper promises hands down.
While ETFs might seem convenient, they're only as solid as the institutions backing them. If financial markets hit turbulence and these institutions wobble, your paper gold could vanish faster than a magician's rabbit. Physical gold, whether bars or coins, offers genuine security despite the premium paid and storage headaches.
The current market volatility makes a strong case for increasing your physical precious metals holdings. Yes, you'll pay more for physical gold initially, and you'll need to sort out secure storage, but at least you won't lie awake wondering if your investment exists beyond a digital entry in someone else's ledger.
Just remember - timing is everything, and buying at all-time highs requires careful consideration.
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As gold prices continue to shimmer at record highs, the allure of the precious metal is once again captivating investors, with escalating global uncertainty sparking a modern-day gold rush. However, while the long-term outlook for gold remains positive, the possibility of a short-term correction cannot be ignored, with historical trends showing that after significant gains, gold often undergoes periods of consolidation or retracement. Consequently, it’s important to ensure that any investment at this stage comes as part of a wider diversified investment strategy. Our latest model portfolio at Sad Rabbit has a 2.75% allocation to gold - as our market sentiment tracker now indicates a ‘neutral’ overall rating for the commodity - in the form of an ETC and two actively managed gold funds to ensure liquidity. This allows the portfolio to maintain exposure to potential gains from holding gold whilst reducing an overallocation that could lead to significant volatility and elevated risk.