Over the past few years, gold has become a hot topic again. As a general rule, when the economy dips, gold prices rise, so it tends to be the go-to investment for worried market-watchers.
Following a gloomy start to the year, gold prices are on the rise again. One ounce of gold is worth approximately £1,129 at present, and Deutsche Bank recently estimated that prices will hit 2,050 dollars (£1,297) in 2013.
Solid gold has been traded as a commodity for thousands of years - the first gold coins have been dated as far back as 700 BC - and it is still possible to buy and sell gold in its natural state today.
However, there are many other ways to access the commodity. Gold funds are springing up all over the world, in many different forms; while exchange traded funds (or ETFs) will track the index performance of gold shares, and can offer lower fees (of around 0.4%) and daily liquidity in most cases.
It is also possible to invest directly in gold-focused mining operations such as Dertour Gold, or through commodities firms such as Glencore.
If you are pessimistic on economic recovery, gold may be worth considering, but what goes up must also come down and the current trend for gold can’t last forever.
Gold bars come in metric sizes, and are based directly on that day’s gold price, plus a premium for manufacture and marketing. The smaller the bar, the bigger the premium.
Twenty-two carat gold sovereigns are the favourite of British investors. Sovereigns dating from about 1887 and up to 1982 are currently considered the best investment. Bullion coins recognised as UK legal tender are exempt from capital gains tax.
Another coin option is to buy South African Krugerrands. The smallest is a 0.1oz coin, which costs about £125 at the time of writing.