Which of these is the most secure way to invest in gold and why?

Question

--> Gold Certificates

--> Gold Accounts

--> Gold Exchange Traded Funds

--> Gold Futures and Options

--> Gold Mining Shares

--> Gold Mutual Funds

--> Personal possession of gold bars or coins

Imagine if another depression were to happen.

Answer 1

Personal possession of gold bars or coins gives you possession of the end product without additional fees to get there as is the case with the other choices

Answer 2

This is one of those cases where the answer is "yes": to several of these options.

Let's say hypothetically that you were a wealthy - and somewhat paranoid, or at least skeptical - investor who was seeking to use gold - in a modest percentage of your wealth - as one form of hedge against financial disaster.  (I'm not directly addressing your "homeless in a Depression" scenario here, but perhaps there is something you can take away about what might work in that situation, as well.)

You would start with the basics: a mix of physical gold, typically in the form of gold coins like American Eagles, Canadian Maple Leafs, Austrian Philharmonic, or Krugerrands, to name a few - which are more recognizable and trusted than bars - stored in a secure location.  You might mix these between a bank safe deposit box for the bulk of your holdings (or boxes in multiple banks - remember, you're hypothetically wealthy :-), and a small amount in a home safe for the remainder.

You might then put some money into "paper gold" outside of the US: these might include gold certificates or accounts (e.g. Goldmoney.com, Perth Mint, to name just a couple) which represent a share of physical gold held in places like Jersey (UK), Switzerland, or Australia, or gold ETFs or their equivalent on foreign stock exchanges that represent gold held outside the US, building these holdings over time.  (Another, similar option is a closed-end mutual fund, the Central Fund of Canada.)

These would - if you trust the holders, and you'd probably want to diversify among several - give you gold that might not be subject to future US government confiscation or cross-border currency transfer limits or prohibition, and might be more accessible to you if you needed to flee the country in a hurry.  (Remember, you're hypothetically paranoid :-)

All of the other options are more like playing the stock market: they're less defensive hedges and more along the lines of risking capital in the hope of outsized gains.  These include:

* The Gold Exchange Traded Funds (e.g. ticker symbols GLD or IGT), representing a share of gold held in vaults in the US.

* Gold futures and options, essentially bets on the price of gold.

* Gold mining shares and mutual funds that hold these: essentially bets on the fortunes of individual companies, or a mix of those companies.

Personally, as a small investor who has had a modest but long-time interest (back into the 1970s) in tracking gold and the gold mining sector, values in the shares of the so-called "junior mining" sector look incredibly appealing these days.  This sector has just cratered, with the share prices of many companies dropping by 40-70% from their recent highs in 2007 to their current Summer 2008 lows.  As a result, when buying shares of these companies, you can today often buy gold in the ground at a price in the range of $10-$30 per Troy ounce.  That's far lower than the typical rule of thumb, of in-ground gold being worth somewhere in the vicinity of 5-10% of the spot gold price (roughly $45-$90 per Troy ounce at today's $900+ gold price).

"Junior gold mining companies" are small cap companies - with market caps just in the tens or hundreds of millions of dollars - that are generally in one (or more) of four stages: exploring for gold, have discovered gold and are identifying how much they have by further drilling, are doing technical and economic feasibility studies and lining up financing toward building a mine, or have at some point begun modest production of gold.  (Junior gold miners that grow the amount of gold they mine into the hundreds of millions of ounces per year move into the "mid-tier producer" sector, and are no longer juniors.  Some juniors are also bought by larger companies before they move into that category.)

But that's for a tiny fraction of your holdings, and you'll need to be very patient - to have a long-term (minimum 3-5 year) time horizon.  (If you're a short-term trader, seeking fast profits, stop reading and ignore the rest of this answer.)  One recent article about this sector:

http://www.kitco.com/ind/sobolev/jul1420...

Two of my favorites, in which I hold shares, are:

* Skygold Ventures Ltd.

http://www.skygold.ca/

* San Anton Resource Corp.

http://www.sanantonresourcecorp.com/en/

Both are "penny stocks", selling for under US $1 per share, and both have market caps of well under $100 million.  (If the term "penny stock" doesn't scare you, it should - there's real risk here.  And I'm not listing their ticker symbols - they trade under different symbols in Canada and in the US - as an incentive to learn much more about the companies before even considering investing.)

Both have already discovered large amounts (1.5+ million ounces) of gold, albeit in low-grade deposits, and both have highly prospective properties, in mining friendly jurisdictions (Canada and Mexico, respectively).  (Skygold's deposit is almost entirely gold, while San Anton owns a majority share of a deposit that contains large quantities of three metals: copper, gold, and silver.)  In my personal opinion, both are likely to significantly grow their existing deposits over time.  Skygold, in particular, has a reasonable potential to more than double the size of their existing deposit within two years, through further drilling.

If you invest, consider that a) you could potentially lose all or nearly all of your investment if anything goes wrong - and small mining companies are definitely at high risk for things going wrong - and b) you should limit your investments in this entire sector - not just in these two stocks - to a tiny fraction - a few percent - of your investment dollars.  Do you own homework ("due diligence") before investing in *any* stocks, not just these.

Answer 3

gold bullion and coins is hands down the best way.... theres nothing like the safey and feeling of owning the phisical metals.... go to this site below

www.kitco.com

Answer 4

Definitely personal possession of gold bars or coins; also look into rare coins. Then of course, you would have to store it securely, perhaps in a safe deposit box.

Answer 5

Gold ETF is the best and the safet u can buy some thing like GLD , regarding gold mining company then u will be invisting in mining companies not Gold there is diffrince   however you can also buy GG or ABX

Answer 6

Gold ETF

See http://www.shareworld/index.php?page=buy...

Answer 7

I prefer bullion or coins. Security is a minor issue, but is offset by portability and immediate liquidity.