question for gold investors

  1. 1,987 Posts.
    I've been doing a little research into ways of inveting in gold and I'm after some advice/opinions from those more familiar with this market than I am.

    I'm not looking to get into a discussion on whether the price of gold is going to rise or by how much I just want to gain a better understanding of how I might invest.

    I understand that there are numerous ways in which I can gain exposure to an increasing (or decreasing) gold price. I can buy shares in a company that produces gold (I'm sort of ignoring the exploration juniors for the moment), I can trade on the ASX in a number of different gold instruments such as GOLD or ZAUWBA, I can participate in a certificate program such as that offered by the Perth Mint, or I can purchase the physical item.

    I'm interested in understanding the relative pros and cons of these various methods. Balancing issues such as liquidity, currency effects and ongoing costs might indicate a preference for one particular method. For example the good liquidity in the shares of a large gold producer might be offset by the fact that a 10% increase in the price of gold may not directly translate into a 10% increase in the share price. Conversely a 10% gain in gold price might be devalued by the inability to liquidate the asset.

    Thoughts and comments much appreciated.

    Cheers

    Badfish
 
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