Do you feel it left it too late to buy gold? Maybe you do, since the price of gold has breached the $1600 per ounce this week. Experts say that gold will touch $1625 per ounce in the next fourteen days and might hit $1700 per ounce by the year’s end.
At this point how can you buy gold? Well, a lot of investment guides ask you to buy gold ingots and bars. When the gold prices go up, the value of your gold bars will keep pace with the gain on a one to one basis. This is very different from other investments which will only keep track of the value.
Experts say that investors want to buy gold because it will still have value when paper money depreciates in value. The flip side to this is that gold in a physical form is difficult to sell when investors want to cash in. It is not like the futures contracts when all you need to do is to call your brokers and hawk it.
If you really want to buy gold, you should study the fluctuations in gold prices. How long the present rally will last will depend on the how the debt crisis in the US and Europe will turn out.
Investors will have to be tuned to the time when a correction in gold prices will happen. This could happen when there is a positive solution to the debt ceiling deliberations in the US and an easing of the crisis in Europe.
You can buy gold by investing in the Exchange-trade funds (ETFs) which follow the gold shares. The ETFs are in a position to gain from the rally in the gold futures. A lot of people have big holdings in ETFs as they feel the need to hedge agsint the rising inflation and weak dollar.
Some people feel that to buy gold stock is a good idea, as companies will gain from the increase in the price of gold. However, analysts warn that gold stock does not always gain as the gold bars do, mainly because of the volatility of the money market and the huge cost incurred by mining companies.