Best Way to Invest in Gold for Beginners in 2024
If you're new to the world of precious metals investing, then you might be wondering where to start. Here, we'll go over exactly why gold is always a solid option to invest in and what to look for when investing in gold, so you make the right decision.
Start investing in gold right now with Interactive Brokers!Top 8 Ways to Invest in Gold 2024
Gold is a precious metal that offers great security. This makes it a top choice for investors and traders who are looking to create wealth.
People usually invest in gold through futures, ETFs, gold stocks, and physical metals. But some of those methods may be better than others. That's why we're going to take a look at the eight ways that you can invest in gold in 2024.
Gold Futures
It is a standardized contract to buy or sell gold on a specified future date. Gold is a commodity, and the futures market allows investors to trade the value of gold in advance.
gold futures price
Many exchanges include the Chicago Mercantile Exchange (CME) and the Commodity Exchange (COMEX), offer gold futures investment. Gold Futures can also be traded around the clock through any broker or financial institution that has access to a futures exchange. The entry threshold to trade is as low as $10 per contract. However, it may vary from exchange to exchange.
👍 Pros
• The ability to hedge against inflation and protect your assets
• The ability to trade in gold without taking possession of it
• Ability to trade gold in smaller amounts
👎 Cons
• You don't actually own real physical gold
• The term of the contract is limited
• Trading with leverage has inherent risks
• There are no guarantee investors can sell contract in the future with profit.
CFDs
CFDs are contracts that have an asset as their underlying, which means you don't actually purchase the asset but rather trade on it.
gold spot/U.S
Different exchanges offer different types of CFDs, including gold commodities. If you're interested in trading on commodity CFDs, then there are plenty of online brokers available for your needs. The entry threshold is very low when compared to standard markets, as most platforms will allow you to open a free account with just a few dollars in capital.
👍 Pros
• No need to carry physical assets
• No need to store them
• No custodian fees
• Access global markets to trade precious metals
• It can be used for hedging purposes
👎 Cons
• Trading with leverage has inherent risks, which makes it unsuitable for certain investors
• High commission and fees
Gold-based ETFs
ETFs are funds that are made up of assets like stocks. You can purchase ETFs on the stock market just like you would purchase any other stock. Gold ETFs are exchange-traded funds that track the gold price.
Gold-based ETFs
The aim of this ETF is to give investors a way to gain exposure to the gold price without having to take delivery of the metal because it trades like a stock and not as a physical commodity.
Gold ETFs can be traded on the stock exchange. There are also many brokers that offer stock trading facilities, including Gold ETFs. Some ETFs include shares of gold mining companies.
👍 Pros
• ETFs trade like stocks and have low fees
• Gold ETFs provide liquidity to investors
• Easy diversification
• The ability to hedge risks
• Low-cost, tax-efficient, and transparent
👎 Cons
• Gold ETFs do not promise delivery of physical gold
• The price of a gold ETF can vary greatly from the actual gold price
Stocks of Gold Miners
There are many stocks available that can be purchased as an investment in gold. These stocks are referred to as gold miners or gold shares, and they represent companies that extract and process gold. As with any stock, the value of these companies fluctuates based on a number of factors, but generally speaking, the higher the price of gold, the more money these companies make.
Below you can see how gold prices have affected the two major mining companies in the past six years.
Gold Price | SPDR Gold Price | Ishares Gold Trust | ||||
---|---|---|---|---|---|---|
Year |
Average Price |
Annual % Change |
Average Price |
Annual % Change |
Average Price |
Annual % Change |
2024 |
$1,798.89 |
-3.51% |
$168.31 |
-4.15% |
$27.67 |
92.00% |
2020 |
$1,773.73 |
24.43% |
$166.65 |
24.81% |
$16.93 |
25.03% |
2019 |
$1,393.34 |
18.83% |
$131.52 |
17.86% |
$13.34 |
17.98% |
2018 |
$1,268.93 |
-1.15% |
$120.18 |
-1.94% |
$12.17 |
-1.76% |
2017 |
$1,260.39 |
12.57% |
$119.71 |
12.81% |
$12.11 |
12.91% |
2016 |
$1,251.92 |
8.63% |
$119.36 |
8.03% |
$12.05 |
8.31% |
👍 Pros
• High return
• Long-term investment opportunity
• Relatively inexpensive compared to other types of share investing
• Shareholders receiving dividends from profits generated by the company
👎 Cons
• High risk
• Annual fees
Golden Coins
Investing in gold by buying physical coins is a very simple process, which would seem to be an advantage. The Golden coin is a denomination of the currency. A denomination (sometimes called a face value) is the name given to a coin or paper money by a government.
There are some differences between physical gold and coins: the coins are smaller in size, so they are more affordable for small investors. Their weight is certified by a mint (20 pieces of coin weigh 1 troy ounce). The gold coins can be sold to a smelter, which pays you cash for them. You can buy gold coins online or at any local coin dealer near you.
👍 Pros
• Taking physical possession
• Greater liquidity and flexibility
• No expiry date and no minimum holding period
• Suitable for the small investor
👎 Cons
• May suffer losses because of currency fluctuations
• Purchasing coins is not instantaneous
Gold Bullion
Gold bullion is a precious metal, comes in the form of a bar or coin. Gold bullion allows investors to capitalize on the price of gold and is one way to invest in gold. Investors buy and sell gold bullion as an investment, usually with the hope that they will be able to sell it later on at a higher price.
Gold bullion can be purchased from many financial institutions, such as banks. However, keep in mind that there are large differences between different institutions regarding their commissions, prices, offers, and more. But they are also available through private vendors or online companies.
👍 Pros
• Suitable for both small and large investors
• Have actual gold
• Can sell or swap gold at any time
• It's affordable
• Collateral for securing loans
👎 Cons
• Risk of fraud or counterfeit products
• Safety and protections lay upon investors
• Need storage
Jewelry
Gold is used to make jewelry because it is beautiful and durable. It is also used as an investment instrument because it carries a higher value than other metals like silver or copper. Jewelry made from gold cannot be broken or destroyed due to its strength and resistance to external and internal factors.
Gold Jewellery can be purchased through mining companies or online dealers that offer physical delivery. The low threshold entry in the investment in gold is due to the fact that it's easy to acquire.
👍 Pros
• Easily tradable
• Taking physical possession
• Purchase from the local store
• Cheap and affordable
👎 Cons
• Maintenance cost
• Risk of fraud or counterfeit products
• Safety and protections lay upon investors
Gold Backed Crypto
Gold-backed cryptocurrency means that each coin has a certain weight of gold stored away safely in vaults somewhere in a secure location. This is what gives stability to the coin and makes it less volatile compared to other digital currencies like bitcoin.
PAX Gold/TetherU5
The main reason why gold-backed crypto is popular amongst investors is that the crypto coins are backed by gold, and this adds more stability to the digital currency and makes it more attractive for investors to invest in.
👍 Pros
• High-profit potential
• Greater liquidity and flexibility
• No expiry date and no minimum holding period
• No physical assets
👎 Cons
• Security issues regarding crypto
• Unregulated market
What Is The Best Way To Invest In Gold For Beginners?
Trying to determine what strategies work best for those who want to invest in gold can be very tricky since there are so many different possibilities and ways of doing so. If someone wants to invest in gold, then he or she will have to take into account several factors, such as the current gold rate, how much money they want to invest, how long they wish them to invest for, etc.
Generally, for large amounts of money, it is best to use futures or stock exchanges or simply buy bars, coins or goldbacks. For smaller amounts, ETFs and stocks can also be useful. Find out which is better to invest in: gold vs stocks, in the TU article.
If you use gold as an investment vehicle, keep in mind that it is a risky one that should only be used as part of a diversified portfolio. If you want to know what the average return on gold is, read the Traders Union article.
Top 3 Platforms To Invest In Gold
With the range of investment options available in the market, it is important to know which platform to invest in gold. If you want to invest in gold, there are three major platforms that may fulfill your need:
Admiral Markets
Admiral Markets platform is designed especially for commodities trading and offers the most favorable conditions for trading precious metals, including gold. It provides a wide range of instruments and tools to meet the demands of traders from different areas of activity and expertise.
Interactive Brokers
Interactive Brokers is a great broker for investing in gold due to its low cost and high liquidity. Some popular gold ETFs include GLD, IAU, GLL, and UGL.
Interactive Brokers is a great option for investors looking for an entry-level, low-cost way to trade precious metals.
eToro
eToro provides access to CFD (contracts for difference) instruments on shares and ETFs. It allows users to trade commodities and stocks across multiple markets. The site offers free social trading and allows people to copy other investors' portfolios and strategies.
Admiral Markets | Interactive Brokers | eToro | |
---|---|---|---|
Options for trading gold |
Stocks, Commodities, CFDs, Cryptocurrency, ETF, Futures |
Stocks, Commodities, CFDs, Cryptocurrency, ETF, Futures |
Stocks, Commodities, CFDs, Cryptocurrency, ETF |
Min Deposit |
$200 |
$0 |
$10 |
Account fee |
No |
No |
No |
Inactivity fee |
No |
No |
Yes |
Deposit fee |
Yes |
No |
No |
Withdrawal fee |
No |
$10 |
No |
Best option |
CFDs |
Stocks, ETFs, and Futures |
Gold copy trading |
How to Invest in Gold For Beginners Online?
Investing in gold on the Internet can seem daunting, especially when it comes to gold futures and CFDs investment. There is so much sheer volume of information that it can often seem impossible to find your way through it. But it is simple to do if you know where to look. However, below we will show you how to invest in gold online by explaining the four main steps involved:
Step 1: Perform Market Research
The value of gold can be volatile, so it's important to check the market trends before investing large amounts of money. There is the actual purchase of bullion itself (which is a commodity), as well as exchange-traded funds (ETFs) and futures contracts. Each of these has its own risks and rewards associated with them. When deciding which option will suit you best, think about how much money you want to spend on each item and how much gold you want in your portfolio.
Step 2: Open A Brokerage Account
Investing in gold online is easier than ever before. With many online brokerages, you can open an account and start buying gold with no or low minimum investment requirements.
Always open up an account with a reputable and low-cost brokerage firm. Also, check if it offers the services that you need. Today, the online broker offers an easy, quick, simple opening process. As an example, we have used Admiral Markets to open an account.
registration on Admiral Markets
Simply go to the online broker's website and go to the register and then follow the instructions. To get started, you'll also need to choose a username and password. After that login into your account. Some brokers will ask for proof of identification, such as a NID or passport.
registration on Admiral Markets
Step 3: Fund your account
After opening an account, you'll be asked to set up a debit card, credit card, or bank account to transfer money into your new account. However, there are some brokerages that charge deposit fees. So, check it before conducting the transaction. Then fund the account to open a real account for trading. However, you can use a demo account without funding to familiarize yourself with the platform.
Step 4: Buy Gold
After funding the account, you can invest money in whatever asset you want. However, be sure to check out the trading cost. This can vary widely from broker to broker. Some of them will charge you commissions every time you make a trade, while others will charge you just one time when you open your account.
Is Investing In Gold A Good Idea In 2024?
Gold has been trading at around $1,800 an ounce lately, but some investors expect to see it go much higher. In fact, according to the forecasts, experts of Yahoo Finance predict that it could reach $3,000 an ounce and more by 2024. They base this prediction on various factors such as inflation and currency devaluation, among others. Many economists believe that inflation is about to increase soon and rapidly too. If this happens, then gold prices will likely rise significantly too.
However, in the year 2024, it's difficult to predict what will happen to the investment market. It's hard to even say what will happen next month or next week.
Read more in the article How Much Gold Should I Own?
Summary
It’s easy to be afraid of investing in gold, especially if you are new in the investment. It’s an intimidating thought, and many people don’t know where to begin. Investing in gold is not that complicated if you take things one step at a time. However, by following these steps, you can invest in gold with confidence, whether you are a beginner or have been investing in the precious metal for years.
FAQs
Is investing in gold a better idea?
Investing in gold may be a good idea if you make careful investment choices and stick to your investment plans. It may increase in value over time, but there are also plenty of risks that threaten to sink your investment. If you want to invest in gold as an asset, watch for the current price and get in at the right time for your plans.
What is the current price of gold?
Gold is trading around $1,800 US Dollars (USD) per troy ounce, as reported by Kitco at the time of writing.
Is gold going down in 2024?
According to the FXStreet analysis, the price ranges around $1,700-$1,900 and waiting for a breakout. If it happens, it may go all the way long to $3,000.
Is buying gold illegal?
Gold investment is legal. Regulated brokers and exchanges are controlled by the government. However, there are many unregulated entities that offer gold investment. If you trade with them, it's your responsibility for your investment safety.
Team that worked on the article
Chinmay is a certified Investment Analyst and Portfolio Manager by the National Stock Exchange (NSE) Academy. He is currently associated with a $75 million VC fund and assists them in identifying and researching investable sectors and start-ups. He has completed his Bachelors of Business Administration from the Institute of Management, Nirma University and is currently pursuing MBA majoring in Finance from the same. He has 4 years of hands-on investment experience in a variety of asset classes and his professional qualifications include being a CFA Level 2 candidate and NSE Certified Market Professional Level 2.
He finds writing as a way to express his thoughts and share his knowledge with people eager to learn. He himself happens to be an avid reader of personal finance books and on top of his recommendation list are the international bestsellers ‘The Psychology of Money’ and ‘Think and Grow Rich’
He has this one strong belief as his motto: Life is what you make of it.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
The topics he covers include trading signals, cryptocurrencies, Forex brokers, stock brokers, expert advisors, binary options. He has also worked on the ratings of brokers and many other materials.
Dr. BJ Johnson’s motto: It always seems impossible until it’s done. You can do it.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.