Gold Mining Companies Business that specialize in mining and refining will likewise benefit from a rising gold price. Buying these types of companies can be an efficient way to make money from gold, and can also bring lower risk than other financial investment methods. The biggest gold mining business boast extensive international operations; therefore, company aspects common to many other big companies play into the success of such an investment.
One method they do this is by hedging versus a fall in gold rates as a normal part of their service. Even so, gold mining companies may provide a more secure way to invest in gold than through direct ownership of bullion.
Gold Jewelry About 49% of the international gold production is used to make precious jewelry. With the international population and wealth growing yearly, demand for gold used in jewelry production should increase over time. On the other hand, gold jewelry buyers are shown to be somewhat price-sensitive, buying less if the cost increases quickly.
Better jewelry deals might be found at estate sales and auctions. The advantage of purchasing precious jewelry by doing this is that there is no retail markup; the disadvantage is the time spent looking for valuable pieces. Nonetheless, jewelry ownership provides the most enjoyable method to own gold, even if it is not the most successful from an investment perspective.
As a financial investment, it is mediocreunless you are the jeweler. The Bottom Line Larger financiers wanting to have direct exposure to the rate of gold might prefer to invest in gold directly through bullion. There is also a level of comfort discovered in owning a physical possession rather of simply a piece of paper.
For financiers who are a bit more aggressive, futures and options will definitely suffice. However, purchaser beware: These investments are derivatives of gold's price, and can see sharp relocations up and down, particularly when done on margin. On the other hand, futures are probably the most efficient way to purchase gold, other than for the reality that agreements should be rolled over regularly as they expire.