Should you invest in gold?

With the price of gold sky rocketing due to the weak US dollar many people have been asking themselves whether they should invest gold. Gold has attracted investors for a number of reasons over the years. The majority of people invest in gold bullion by buying gold bars and coins or even some sort of gold jewellery which is an investment as well as something that you can enjoy. One main advantage of investing gold bullion is that there are relatively few risks involved.

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How to invest in gold

Gold bars

A gold investment is viewed by many as a hedge in periods of economic uncertainty against the possibility of inflation devaluing any savings you have in a bank or a building society. The reason for this is that the price of gold will always rise with inflation. During recessions when interest rates on savings accounts are very low, savers will often look for investment opportunities with gold being one of the most risk-free investments. Although gold is indeed a low risk investment it will offer particularly high returns. For the wealthier investors gold bars offer a great way to invest gold, it is even possible to buy gold bars on the high street. One of the main problems with buying gold bars is the storage and transportation which can be expensive. An alternative to physically buying gold bars is to buy a gold certificate. In this situation you buy the gold bar but it is kept in a secure location and you receive a certificate confirming that you own the gold.

Gold Coins

For those looking to spend slightly less, then investing gold bullion coins is certainly an option. The most popular gold bullion coin to invest in is the gold sovereign. It was first struck in the 15th century under the reign of Henry VII and is a 22 carat coin that comes in a number of different denominations. These can be purchased from dealers or directly from the Royal Mint where there is a 10% premium on its intrinsic value. Another popular coin for gold investments the South African gold Krugerrand due to its typically low premium.