4 Ways to Invest in Gold That Makes Money

There are various methods you can employ to invest in gold for financial gain. Gold is not only sought after for its use as jewelry but is also deemed as a highly profitable investment option. This is due to the fact that gold's value tends to increase over time and doesn't experience significant drops in price.

An example is the current pandemic period from 2020 to 2022 where the price of gold has risen significantly. As a result, gold is now sought after as an investment, making it crucial for you to understand how to invest in it.

If you're interested in investing in gold but are a beginner, don't fret. This article will guide you on how to invest in gold for profit. Read on for the details!

How to invest in gold for profit

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As prices and popularity have risen, gold has become a popular investment option for many. So, how can you invest in gold to make a profit?

1. Ensure Gold Investment Objectives

Before investing in gold, it's important to determine the investment's purpose. Goals such as wedding savings, education, and retirement funds can be targeted with gold investments.

For instance, if your goal is to retire and start your own business in 10 years, you can allocate a portion of your salary for gold investment each month. Having a clear goal like this helps determine the amount of gold to invest each month to reach the target by the set time.

2. Monitor Gold Price Developments Periodically

Keeping track of gold price fluctuations is now made easy by the many websites and smartphone apps that show daily updates.

Although gold prices are known for their stability, monitoring them regularly is still necessary as prices can still drop. This helps to avoid selling gold during a price decline and ensures maximum profit. Hence, it's important to regularly monitor gold price developments.

3. Focus on the Future

Gold investment is best suited for long-term plans, such as 10-15 years in the future. This requires patience in investment. It's important to remember that gold investment differs from short-term investments focused on quick profits. Understanding this distinction is key to making profitable and suitable gold investments.

4. Buy and Sell Gold in a Trusted Place

There are many places that buy and sell gold for investment. It's crucial to purchase from an official and trustworthy source. The official source should have proper documentation and certificates recognized by the government.

PT ANTAM is a recommended place to buy gold, either directly from its sales outlets or through authorized e-commerce sites. Another option is opening a gold savings account with PT Pegadaian, both of which are state-owned enterprises offering reliable sales.

When selling gold, it's advisable to sell back to the same place of purchase to avoid losses and fraud by the seller. Sellers may undervalue the gold, but by returning to the place of purchase, the original purchase price can be shown as reference.

Gold Bullion

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When people think about investing in gold, bullion is usually what comes to mind - large, shiny gold bars stored in a secure vault. Gold bullion bars are available in various sizes from a few grams to 400 ounces, with 1- and 10-ounce bars being the most common. At a current price of $1,900 per ounce (September 2020), investing in bullion can be costly. Unlike stocks, there's no option to buy a fraction of a gold bar.

Given the high price of bullion, it's crucial to work with a trustworthy dealer and ensure delivery with insurance or secure storage in a vault or safe deposit box. Keeping track of the gold price can also help in making informed buying decisions, as most dealers update prices based on current market rates.

Gold Coins

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The most prevalent gold coins are those that weigh 1 or 2 ounces, although smaller sizes such as half-ounce and quarter-ounce coins are also available. The most widely sold collectible coins include South African Krugerrands, Canadian Maple Leafs, and American Gold Eagles. Some dealers even offer blank, worn, or damaged coins.

However, the price of gold coins may not always match their gold content. Popular collectible coins often carry a premium. For instance, a one-ounce American Gold Eagle coin retailed for slightly over $2,000 in mid-September 2020, which is almost a 5% increase compared to the same amount of bullion.

You may be able to get better deals on gold coins from local collectors or pawn shops, but it is generally safer to purchase from a reputable and licensed dealer.

Gold Jewelry

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Investing in gold jewelry is another option, but it comes with various risks that investing in pure gold does not.

Firstly, it is important to exercise caution when purchasing jewelry, as not all secondhand pieces are sold by trustworthy dealers. You need to verify the authenticity of the piece to protect yourself and future buyers. To avoid issues, it is crucial to buy investment jewelry from a reputable dealer and obtain proper documentation.

Secondly, the jewelry's design and manufacturer can affect the markup, which can range from 20% to more than three times the raw value of the precious metal.

Lastly, it is important to consider the jewelry's purity, measured in karats, with 24 karats being equal to 100% gold. Lower purity decreases the melt value, or the raw value of the jewelry's components if melted down into pure gold.

Should You Invest in Gold?

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Gold can serve as a hedge against inflation and other uncertainties, offering a secure investment option. Although it can be as volatile as stocks in the short-term, gold has maintained its value well over the long-term.

Your investment strategy will depend on your risk tolerance and preferences, with options including physical gold, gold stocks, gold ETFs and mutual funds, and speculative futures and options contracts. Regardless of the form of gold investment, it is typically advised to allocate no more than 10% of your portfolio to gold.

All forms of investing come with risks, and gold is no exception. However, the unique gold market is complex and takes time to understand, making gold ETFs and mutual funds a safer choice for most investors seeking stability and value in their portfolios.

Read More: How to Invest in Cryptocurrency




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