The lesson in full
Gold has been money for thousands of years, and today you can own it in more ways than ever. Each way has different costs and risks.
Physical bars and coins: you hold the real thing. Costs: the buy-sell gap, storage and the risk of theft. Popular from Indonesia's Antam bars to India's coins and jewellery.
Gold ETFs trade on stock exchanges like a share and track the gold price, while the fund keeps the metal in vaults. Low cost, easy to sell, no storage worries.
Digital gold and gold savings apps let you buy tiny amounts. Check who stores the gold and that the provider is licensed.
Gold CFDs and futures let traders bet on the price going up or down, with leverage. You never own gold, and leveraged CFDs charge a fee every night you hold them.
- Common mistake
Mistake: buying gold for a quick profit. The buy-sell gap means you start at a loss, and gold can fall for years: after its 2011 peak, it took about nine years to get back.
- Key takeaway
Gold works best as long-term savings and crisis insurance. Pick the form by cost, safety and how easily you can sell.
Quick check
- A gold ETF... Trades on an exchange and tracks goldYou buy and sell it like a share; its value follows the gold price.
- When you buy gold, the price you can sell back the same day is usually... LowerDealers buy back below their selling price. That gap is their margin.
- Which gold product charges you a fee every night you hold it? A leveraged gold CFDLeveraged positions pay overnight financing, which adds up the longer you hold.
- What does gold's 2011–2020 story teach? Gold can fall and stay low for yearsIt took about nine years to regain its 2011 peak.
Asset Classes
- The risk and return ladder
- Stocks: owning a slice
- Reading a company report
- Bonds and government debt
- Why gold loves a crisis
- Ways to own gold
- Oil prices
- Commodity countries
- Property as an investment
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