Gold (GC=F) hovered at a record high of around $2,700 an ounce on Wednesday and silver traded near a 12-year high, with the US presidential election between Kamala Harris and Donald Trump just days away and most investors expecting more rate cuts. the next meeting of the Federal Reserve on November 7.
This week, Goldman Sachs analysts predicted that gold will rise about 10% to $3,000 by December 2025 due to demand for physical gold from central banks, investors issuing exchange-traded funds (ETFs) backed by physical gold, and speculative positions.
“History shows that gold positions tend to rise with uncertainty and when investors seek safe havens,” wrote Lina Thomas and Daan Struyven of Goldman Sachs.
Retail investors looking to get in on the precious metals action have several options, from owning physical gold to investing in mining companies. Here are some:
“For gold, as well as silver, buying physical assets is the safest and most reliable way,” said Alex Ebkarian, co-founder and COO of Allegiance Gold.
Ebkarian said investors should have a long-term outlook for investment returns, as well as understand that there are storage and transportation costs if gold is stored outside the home such as in a safe deposit box. There is also a premium fee paid at the time of acquisition.
“When it comes to investing in bars, I suggest starting at 1 oz with well-known brands such as PAMP Suisse, Valcambi,” he said.
Physical purchases can be made from local dealers, online platforms, and even big-box retailer Costco (COST), although the latter no longer buys from customers.
Buying coins also has a premium – from the most common to the rarest.
“When it comes to coins, it is best to focus on the products of the top four mints of the world: US Mint, Royal Canadian Mint, Perth Mint, and Royal Mint. They produce investment-grade coins highly sought after. and very liquid, Diversification your ownership gives you more flexibility and options in the future,” Ebkarian said.
The most popular for gold and silver is 1 oz. American Eagle.
“American Eagle 1 oz. coin is the most liquid, traded, and recognized bullion coin in the world. The demand is great,” said Scott Travers, executive editor of COINage Magazine and author of the Coin Collector’s Survival Manual.
Travers said consumers should make sure their coins have been verified through one of the industry’s three major grading agencies or purchase a tester for verification.
Gold bars are displayed at a gold jewelry store on October 1, Hangzhou, Zhejiang Province, China. (Ni Lifang/VCG via Getty Images) ·VCG via Getty Images
Another way to gain exposure to gold or silver is through ETFs that track the price of these commodities.
The iShares Silver Trust (SLV) and Physical Silver Shares ETF (SIVR) are both up about 42% year-to-date, while the SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) are each up about 34% year-to-date.
Global physically-backed gold ETFs saw their fifth monthly inflows in September, pulling in $1.4 billion, according to the World Gold Council.
“The main advantage of gold ETFs is that they closely follow the price of gold, making it easy to buy and sell, and do not require physical storage. But ETFs charge management fees, and prices can fluctuate with market conditions beyond just changing the value of gold,” Peter C. Earle, senior economist at the American Institute for Economic Research, told Yahoo Finance.
“There is a case to be made for retail investors to invest in gold and silver through mining stocks,” said Warwick Smith, CEO and director of American Pacific Mining Corp ( USGD.CN ).
“Despite competition from critical metals like copper, gold remains everyone’s top choice in 2024 and will continue to be the best performing asset in the commodity market until next year,” he said.
Year to date, the VanEck Gold Miners ETF (GDX), which consists of companies involved in finding, mining, and refining gold or silver, is up 33% compared to gold’s 29% rise over the same period. Miners have been playing catch-up this year as the broader five-year period shows physical gold has done better.
Some experts warn that the tangential route to investing in gold adds an element of corporate risk beyond what comes with the commodity.
“Gold-related corporate shares carry all the risks of adverse movements in gold prices in addition to corporate management risks: operational challenges and company-specific factors,” Earle said.
The largest miner, New Gold ( NGD ), is up about 95% year-to-date, while Chicago-based Coeur Mining ( CDE ) is up about 110% over the same period. South Africa’s Harmony Gold (HMY) is up about 85% since the start of 2024.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow him at X on @ines_ferre.
Click here for in-depth analysis of the latest stock market news and stock price moving events
Read the latest financial and business news from Yahoo Finance
Your Trusted Source for Accurate and Timely Updates!
Our commitment to accuracy, impartiality, and delivering breaking news as it happens has earned us the trust of a vast audience. Stay ahead with real-time updates on the latest events, trends.
