The New Gold Rush - Get it while you can

There has been a lot of speculation, as of late, to the expected rise in the price of gold.  There are some claims that Gold can rise to as high as $3000 - $5000 an ounce in just five years.  You might scoff at that prediction as I did 5 years ago when some of my investment buddies told me that Gold would rise to over a $1000 an ounce.  All their claims couldn’t convince me to invest in gold even though it was trading at just over $400 and ounce.  You see, I had my eye on Silver as it was a much more attainable price range for me. Silver, at the time, was only trading at around $6 an ounce.

I only started investing in Silver and Coins in 2005 and I only invested in tangible items such as Silver Art Bars, Silver Rounds, and Silver Dollars.  I watched as Silver tripled in price as Gold only doubled in price in the same time frame.  But I started to notice something; the weaker the US dollar became, the stronger Gold became and conversely, when the US dollar strengthens Gold weakens.  Silver on the other hand hit a plateau which it has remained at or near for a few years now and only realize minimal gains and losses.  I still invest in Silver and also in coins but not as hedge investment.

An older friend, and much wiser, coworker sat with me over lunch one day and we discussed our investments in coins and precious metals. It was then that I learned I was missing out on a great opportunity for investing in Gold and that my total investment strategy was lacking elements of real growth. My friend then introduced me to Exchange Traded Funds (ETF’s) and pointed out that I didn’t need large amounts of money to invest in Gold. I could invest in precious metals the same way I made investments into my 401k and my IRA.

Small investments are pooled together with many investors in a fund that purchases real gold. The ETF is traded on the stock market and can increase or decrease accordingly with the market as the market is tied to real time gold prices. This makes a Gold ETF a great vehicle for anyone that wants to invest in Gold at rates they can afford.

The Gold ETF’s should not be confused with Gold Mutual Funds. Gold MF’s invest money is into companies which belong to the gold sector, such as mining and gold exploration companies. These types of funds have just as much risk factor as any other stock on the market and need to be analyzed as such.

Any and all investments have certain risk factors that need consideration before jumping into. My only purpose of this article is to inform that there are easier ways to get into gold investing other than purchasing real Gold.