Gold can be an attractive investment for anyone who needs to diversify their portfolio. As a strong defensive position, it’s a way to weather turbulent times when the value of stocks, bonds, currencies, and other assets are uncertain. It plays an essential role in the right portfolio, but how do you buy gold in Canada? There are three ways to invest in gold, all of which can be done from just about anywhere in the world.
#1 Gold ETFs
A gold Exchange-Traded Fund can be a good option for investors who don’t want to worry about storing and insuring physical precious metals and are willing to live with higher counter-party risks. An ETF allows you to buy stocks in a company that invests in gold – or more accurately, in derivative contracts backed by the metal.
The idea behind an ETF is that it tracks an index or, in this case, a commodity. Without owning the asset personally, your stock in an ETF reflects rising and falling prices. If you prefer to manage all of your investments digitally, it can be a convenient way to take advantage of precious metals.
Not everyone is willing to part with direct control of their assets and worry about ETFs trading on gold-mining companies or on futures. That’s not real ownership of the rare metal.
#2 Gold Coins and Bars
Many prefer the traditional way of buying gold: bullion coins and bars. American Gold Eagle and Canadian Gold Maple Leaf coins remain some of the safest and most reliable ways to enjoy the full benefits of bullion investing. Bullion offers:
- Direct control over your asset with no third-party risk;
- No risk that a supplier will fail to deliver or settle with cash in the event of a supply shortage;
- High liquidity, as you can sell gold to coin dealers in Canada quickly and easily.
- A physical and tangible asset that you can hold
These products can be bought from places like Global Bullion Suppliers in Canada quickly. If you’re a first-time gold buyer, you can also talk to an agent about your purchase. Global Bullion even offers a free bullion consultation to any investors – providing basic tips like industry terminology and how to maximize your investment.
Bullion coins and bars are a way to own precious metals “as cash.” When the value of paper currency is eroding due to inflation or in exchange value, gold becomes a better alternative to cash. It doesn’t hurt that the Canadian Gold Maple Leaf is one of the world’s most popular and widely accepted coins.
#3 Mining Stocks
Your third option is to invest in gold-producing companies, i.e., mining stocks. You would think that when prices of the metal rise, the value of mining companies would increase, too. However, mining stocks are your riskiest option.
When you invest in a company, you’re not just investing in the product they deliver. You’re investing in the competency of management and betting that they can deliver their product at a profit. The complexity and cost of mining operations mean that even high gold prices are no guarantee that the mining companies will be profitable.
There are plenty of ways ordinary investors can take advantage of precious metals in Canada.
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