Finance

What are the Best Ways to Invest in Gold?

What are the Best Ways to Invest in Gold

While the continued diversification of the world’s financial markets has been pronounced through the digital age, some assets remain universally popular across the globe.

Take gold, for example, which remains the classic investor’s safe-haven and one that has a tendency to appreciate in value during times of economic uncertainty and tumult.

But how has gold performed through the last 18 months or so, and what are the best ways to invest in this asset class in the current marketplace?

Gold in 2021 – How Has it Fared?

We all know that gold enjoyed stellar growth through 2020, as investors sought secure stores of wealth and risk-averse investment options to help hedge against the risk caused by the coronavirus.

To this end, the value of gold peaked at a record high of $2,036.58 on July 27th, before ending the year still competitively priced at $1,898.40.

As you can imagine, the price through 2021 has been relatively volatile, although gold has continued to trade in a relatively stable range. 

By February of this year, gold had recorded an annual price increase from $1,479.13 to $1,85.42, marking a 25.6% rate of growth when compared with Q2, 2020. During the first month of the year, the price of gold also increased incrementally by 0.46%, suggesting that the coronavirus-inspired uncertainty continued to weigh heavily on the marketplace.

As expected, the formative part of the year saw numerous countries end or diminish Covid-19 restrictions, with the price of gold falling sharply to $1,699.08 by March 4th. 

However, this remains the nadir for gold prices during the year, as the threat of new variants of the virus and relatively sluggish economic growth has continued to take hold.

Because of this, gold once again broke above the $1,900 barrier in May, reaching $1,904.20 during this period and seeing widespread peaks in demand throughout the world.

As of the opening trading bell on December 20th, gold was valued at $1,802.12, with experts predicting that the asset may continue to experience upward pressure and increased demand in the near-term at least.

How to Invest in Gold

Clearly, there are still plenty of reasons to invest in gold in the current climate, especially as the Omicron coronavirus variant continues to showcase heightened transmissibility and inspire the resumption of lockdown measures globally.

With demand and prices set to increase, one method other than direct ownership is to target gold funds. Such entities are often overseen by experienced wealth managers, while they provide efficient ways to gain exposure to gold and are generally considered to be cost-effective.

Such funds may also provide instant diversification and a viable measure of gold prices as a whole, so they’re definitely a viable option for investors across the board.

For a more indirect investment route, you may also want to consider the merits of gold mining stocks.

While this doesn’t offer direct exposure to the gold market, it will help to create a diversified portfolio that can profit on the back of rising precious metal prices.

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