There are a few smart gold investing options worth looking at this year if you want to add the precious metal to your portfolio.
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The economic landscape consistently experiences shifts and changes, which is one reason why investors seek out reliable assets to safeguard their wealth. And gold, which has been hailed as a timeless store of value, has long been a preferred choice for investors who want to add stability and security to their portfolios.
As we step into 2024, the focus on finding stable and secure investments continues to be important. After all, there are looming questions regarding where the economy could be headed — and ongoing inflation issues, coupled with the current geopolitical climate, are only adding to the unknowns. So investors who want to be prepared for anything may want to emphasize gold investing in 2024.
But there are lots of different gold investing options to choose from — each with its own set of possible benefits and downsides to consider. So which gold assets merit consideration this year? Let’s find out.
If you’re thinking about adding gold to your investment portfolio this year, you may want to weigh the following options:
Physical gold
The traditional method of investing in gold involves acquiring physical gold in the form of gold bars and coins or similar assets. Investing in physical gold provides a sense of security, as investors have direct ownership over their gold. Coins like the American Gold Eagle or the South African Krugerrand are popular choices, but they aren’t the only ones. Costco and other big box stores are also selling gold bars to customers who are ready to invest in the precious metal, so it’s easy to buy physical gold these days.
However, there are some potential downsides to investing in physical gold. For example, investors should be mindful of storage costs, insurance costs and the potential for theft, which should be weighed against the potential benefits of this type of gold investing. And it’s also worth noting that buying and selling physical gold may involve higher transaction costs compared to other investment options.
Gold ETFs offer a convenient and cost-effective way to gain exposure to the precious metal without the need for physical possession — which cuts down on the costs by eliminating the need for storage and special insurance. These funds typically track the performance of gold prices and are traded on stock exchanges, providing liquidity to investors.
And, investors can buy and sell shares in gold ETFs just like stocks. Before investing in gold ETFs, though, it’s crucial to understand that there are other types of associated expenses, such as management fees, which can add to the overall costs of this type of investment.
Gold stocks
Investing in gold mining stocks allows investors to participate in the potential upside of gold prices while also benefiting from the profitability of mining companies. And, companies involved in the exploration, development and production of gold can be attractive investment opportunities.
However, it’s essential to recognize that gold stocks are subject to company-specific risks, such as operational challenges and geopolitical factors. That’s why conducting thorough research on individual mining companies is crucial before making investment decisions.
Gold futures and options
For more experienced investors, gold futures and options contracts provide a way to speculate on the future price movements of gold. These financial derivatives allow investors to leverage their positions, potentially magnifying both gains and losses.
Futures contracts involve an agreement to buy or sell gold at a predetermined price on a future date. Options, on the other hand, provide the right (but not the obligation) to buy or sell gold at a specified price within a certain timeframe.
Due to their complexity, these instruments are typically not recommended for novice investors — but can be a smart option to consider for more experienced investors, especially those with extensive gold investing experience.
Gold mutual funds
Gold mutual funds pool money from multiple investors to invest in a diversified portfolio of gold-related assets, including stocks of gold mining companies, physical gold and other related securities. Mutual funds provide diversification, reducing the risk associated with investing in a single asset or company.
However, like ETFs, investors should be aware of management fees and other expenses associated with mutual funds. Those types of fees can add significantly to the overall cost of investing, so it’s important to weigh the benefits against the costs before making a decision on whether it’s the right option for you.
Digital gold
As technology continues to advance, digital gold has emerged as a modern and accessible investment option. Digital gold investing platforms allow investors to buy, sell and hold physical gold digitally, and these services typically provide the convenience of fractional ownership, making gold accessible to investors with smaller budgets.
But while digital gold eliminates the need for physical storage, investors should carefully evaluate the security measures implemented by the platform before making any investments.
The bottom line
Gold remains a valuable asset for investors seeking stability and a hedge against economic uncertainties. The diverse range of gold investing options available in 2024 caters to investors with varying risk appetites and preferences. But whether you’re opting for physical gold, ETFs, mining stocks, futures, mutual funds or digital gold, it’s crucial for investors to conduct thorough research, understand the associated risks and align their investment choices with their financial goals and risk tolerance.
Angelica Leicht is senior editor for CBS’ Moneywatch: Managing Your Money, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at Bankrate, HousingWire and other financial publications.
NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
