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Gold Shares – From the Gold Producing Companies

Gold shares can be in the form of physical gold, gold certificates, or digital currency, also known as e-gold. Unlike the dollar and other fiat currencies, the price of gold is not prone to inflation and instead has a set value.

Gold SharesPHOTO BY FLICKR.COM/TEEGARDIN/

Gold Shares - A General Overview

Many countries including the United States, United Kingdom, Canada, South Africa and China mint bullion coins made of gold. Small investors and wealthy individuals prefer the Krugerrands or Britannias in one-ounce gold bullion coins for their gold shares. Under European Union regulations, purchasing investment grade gold bullion is not subject to tax and is stamp duty free. Gold coins, meanwhile, increase in monetary value faster than the price of gold in a bull market but will depreciate greater in a bear market. In the United States, citizens can buy gold shares through their Individual Retirement Accounts, while United Kingdom citizens can invest using their Self-Invested Personal Pensions.

Gold Funds - Various Types

Gold mutual funds can be used to diversify a portfolio and invest in different stocks. However, the value of mutual funds can be as volatile as shares in the stock market, so it is important to conduct research before investing in gold funds. This does not disprove the fact that gold mutual funds, like other types of gold investment, can be easily converted to currency because it ensures high liquidity. Gold exchange-traded products are gold funds that are traded in large stock exchanges including the New York Stock Exchange. Further classified into exchange-traded funds, exchange-traded notes and closed-end funds, they may or may not hold physical gold.

Gold Invest - Tips

Perhaps the easiest and safest way to invest in gold is through mutual funds. People looking to buy gold invest in shares in companies such as the SPRD Gold Trust. For those making an investment for the first time can call a stock broker or sign up online through brokerage firms such as E-trade or Fidelity. A reliable broker should be able to provide sound advice on potentially good or bad investments. For certain types of gold assets, solvency and credit rating should be considered before making a purchase. Risks include dependence on technology for digital gold and high annual charges or hidden fees for gold unit trusts.

Written by Dennis Patterson

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