This article will work on explaining seemingly mysterious gold futures trading lingo terms that are used among experienced traders, namely, contango and backwardation.
Gold futures contracts are purchased in order to guarantee delivery of a standard unit of gold commodity, normally 100 ounces, at a future date at a set price.
Gold futures are one of popular gold investing mechanisms along with buying physical metal, stocks of mining companies and gold ETF’s. Gold futures prices reflect the value of a standard size of precious metal commodity, usually 100 troy ounces, that a buyer agrees to buy and a seller agrees to sell at a set future date but for mutually agreed prices.
According to the golden rule of investing called diversification, no single investment portfolio should be devoted to just one gold mining company. Spread your risk and pick among gold mining investments listed in this article.
With gold prices being currently on the rise, investment in gold exchange traded funds is gaining popularity. Gold exchange traded funds make gold investing easy due to the fact that physical gold doesn’t change hands and you are investing into securities of gold bullion that are held in one centralized spot.
Gold shares or stocks are securities of companies at the supply end of precious metals market, namely, the ones involved in exploring and mining for minerals and precious metals. The market of precious metals stocks is one of the most volatile out there and only really knowledgeable investors can experience significant gains if they take into consideration our 7 tips below.
As an investor there are many different gold options to choose from. You can decide on gold bullion in the form of coins, bars, and jewelry, or you can pick stocks, bonds, futures, mutual funds and ETFs, and others. But how can you choose the right company to buy from, and be sure that you are getting a good deal or a legitimate investment?
Gold futures are one way of investing in this precious metal. But with all of the investment types available with gold, is this a good investment or is it better to hold gold bullion in the form of bars and coins instead?
Essentially, investors in gold market have 3 choices when it comes to selecting a specific mechanism, namely, invest in physical bullion, mining stocks or funds that are managed by professionals whose are responsible for conducting all necessary fund transactions and virtually deciding whether the fund should purchase bullion, mining companies’ shares or both. Finding the best fund is your key to successful precious metals investing providing diversification, risk management and hedge against inflation.
When it comes to the best gold investment possible in your specific situation, you will need to look at the pros and cons of gold investment funds versus those of gold stocks, to evaluate which is a better choice for your investment goals.
Before you select which gold mining stock to buy read our advice how to buy gold stocks. It’s important to understand than with these shares you are not investing into the actual value of metal but merely into companies that are in the business of prospecting and mining for various precious metals.
1. Look For Low Markups
If you want to purchase gold coins or bars online, one of the best secrets is to look for dealers who offer very low markups.
Gold Exchange Traded Funds represent just another dimension of investing in gold. Many investors into physical precious metals realise many additional expenses that come with storing, insuring and selling their physical bullion portfolio. Most of these expenses are virtually eliminated if you choose to invest into one of these funds.
1. iShares Comex Gold Trust- Ticker Symbol: IAU
It is a gold ETF that is one of the top players in the market. This fund is very popular, and has a solid trading history.
A gold bullion ETF is considered a great investment by many, but this choice does have both pros and cons. Before you decide to put your investment capital into a gold ETF you should know both sides of this investment mechanism. This will allow you to make a more informed decision, so you do not make a mistake that results in losses instead of gains.
