Gold Futures – Is That a Good Type of Investment?

Gold FuturesGold 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? The answer will depend on your specific goals and investment strategies being used, but the futures market can carry more risks where your investment capital is concerned.

Gold futures are definitely not for the laymen in the precious metal investing world since they require strong analytic skills, profound knowledge of how this special market operates and ability to speculate about various market scenarios. Investing in futures is like gambling, you just never know what you are going to get. Futures are essentially contracts to buy a set amount of gold for current prices on the future date. The buyers are speculating that the prices will go up and they will make some money, but the prices might as well go down and you might lose all of your capital.

On the other hand, gold bullion trading has always been a popular investment activity, especially during hard economic times. This is not always true with gold futures though, because the future is uncertain and anything could happen in the market. There are many different ways to invest in precious metals, and you have a number of options. Gold stocks, ETF’s, and certain other investment choices do not involve taking physical possession of your investment. Gold futures are considered highly speculative and very risky for most investors, and experts advise all beginners and inexperienced investors to avoid these options for this reason.

A gold ETF may be a better choice if you do not want to own bullion but you want to invest in the spot price of gold. This is normally less risky than gold futures, but there is still a significant risk of capital loss in many situations. No matter what investment choices you make, it is crucial that you examine and research each possibility completely before you make any final decisions.

Instead of investing in gold futures, many individuals choose to invest in the gold bullion market because it has many benefits providing your with an excellent long term investment and safe haven for your capital from inflation.

Futures are a bad idea for most people, and roughly ninety percent of these investments result in large capital losses. If you would like to learn more about silver futures investing and whether these are right for you, click on one of the articles on the topic.