Gold prices have been climbing over the last year, a trend that’s been driven, in large part, by a surge in demand from investors who want to protect their portfolios from inflation. And, it appears that the uptick in gold prices may not be over yet. Gold prices have hit numerous new milestones in the last few weeks alone — climbing from a record high of $2,160 per ounce in early March to today’s gold price of $2,353.15 per ounce.
Given the current upward trajectory of gold’s value, it’s no surprise that so many investors are flocking to the precious metal. After all, the opportunity to capitalize on price increases can be tough to pass up, and when you factor in the other benefits of gold investing, it’s easy to see that the yellow metal can be a smart addition to most investment portfolios.
if you’re looking to capitalize on this gold bull market, there are several strategies you can use to benefit from gold’s high price — whether you’re an experienced investor or are just starting out.
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How to benefit from gold’s high price now
By employing these strategies, you may be able to capitalize on the high gold prices we’re seeing today:
Invest in physical gold bars and coins
One of the most straightforward ways to gain exposure to gold is by purchasing physical gold bars or coins. Holding physical gold can provide a sense of security and it can act as a tangible asset to your investment portfolio. Plus, as gold prices rise, the value of your physical holdings will increase as well, allowing you to benefit from future price increases.
You should note, though, that the price of physical gold may not appreciate as quickly as some other types of gold investments. It tends to be more of a long-term investment. But the tradeoff is that it can be a stable hedge against inflation and market volatility — and its value tends to increase over time — so if you buy in now and hold your gold bars or coins, you could see some hefty returns in the future.
Explore the benefits of gold investing today.
Invest in gold mining stocks
If you’re seeking more leveraged exposure to the gold market, gold mining stocks can be an attractive option right now. When gold prices rise, like they are currently, the profits of gold mining companies tend to increase. This, in turn, can lead to higher stock prices and potentially bigger dividends for investors, so putting some money into gold mining stocks right now could be a smart move.
Buy gold ETF shares
Another option for capitalizing on today’s high gold prices is buying shares of gold exchange-traded funds (ETFs). Gold ETFs provide a diversified way to gain exposure to the gold market by allowing investors to buy into a range of gold-related assets, including physical gold bullion, gold stocks and gold futures contracts.
These funds offer instant diversification and liquidity with relatively low expense ratios compared to other gold investment products. And, because gold ETFs tend to be riskier investments than gold bars and coins, the right investment could lead to bigger returns over the short term, especially given the current trajectory of gold prices.
Consider gold futures and options
If you’re a more experienced investor, you may want to explore trading gold futures and options as a way to potentially generate outsized returns from the gold price movements that are occurring right now. Gold futures allow you to speculate on the future price of gold, while gold options give you the right, but not the obligation, to buy or sell gold at a preset price.
While trading gold derivatives can be more complex than simply buying physical gold or gold stocks, the potential upside can be significant if you get the direction of gold prices right. Just be aware that futures and options also carry higher risk, so they’re not suitable for all investors.
Invest in gold jewelry and collectibles
You could also consider investing in gold jewelry, coins or other collectibles as a way to benefit from today’s high gold prices. While these physical gold assets don’t necessarily track the gold spot price as closely as other investments, they can still appreciate in value as the underlying metal becomes more expensive.
For example, rare and antique gold coins, as well as unique jewelry pieces from reputable makers, can be good stores of value. They may even rise in price at a faster rate than the gold spot price, depending on factors like scarcity and collector demand.
The bottom line
With gold prices reaching new heights, now is an opportune time to explore ways to capitalize on the current gold bull market. Whether you choose to buy physical gold, invest in gold mining stocks, purchase gold ETFs, trade gold derivatives or invest in gold collectibles, there are numerous strategies available to help you benefit from the yellow metal’s strength.
As with any investment, though, it’s crucial to do your due diligence, understand the risks and invest within your risk tolerance. But by leveraging the right approach, you can position yourself to profit from the ongoing gold price surge.
Source Agencies