In uncertain times, gold can always be relied on as a stable investment to protect and grow wealth. So it's no surprise that the current financial crisis precipitated by the coronavirus pandemic has led to a significant interest in gold investment in 2020.
If you're interested in gold investment, but you don't know where to start, here's a brief overview of the main options for investing in gold in Australia.
Types Of Gold Investment
Investing in gold doesn't necessarily mean you have to go out and buy a safe. There are three common ways to profit from gold assets:- Buying physical gold bullion
- Investing in gold-based funds
- Investing in gold mining companies
Buying Gold
Traditional gold investment involves owning physical gold bullion in the form of bars, coins or jewellery. These assets can be purchased from gold dealers online or in your local area.
One important consideration is where the gold will be stored. If you choose to store the gold in your home, you'll need to buy a safe and update your home contents insurance. You may decide instead to use a storage service offered by your gold dealer or to rent a safety deposit box at a bank.
Owning physical gold means your investment is fully tied to the asset and not a third-party investment fund or company, but the need for secure storage and the threats of theft or disreputable sellers can make it a riskier option.
Investing In Gold Stocks
Alternatives to buying gold physically are to invest in a gold-backed exchange traded fund (ETF) or gold mining companies on the financial markets. These allow you to profit from changes in gold prices without the risks and hassle of owning gold yourself.
- ETFs are funds that track the price of gold or stocks from multiple gold companies. These can be bought and sold on stock exchanges.
- Gold mining stocks are also traded on stock exchanges and are closely tied to the price of gold. You can invest in a mining company or companies of your choice through a broker or online trading platform.
- A third option is to speculate on changes in gold prices on the futures market, but this is a riskier option that's better suited to experienced traders.
No investment is entirely without risk, but the enduring stability of gold makes it a comparatively safe investment option. The long-term returns can be lower than for some other investments when your investment is tied to the price of gold alone, but investing in a successful gold mining operation can be more profitable.
Barclay Pearce Capital client AuStar Gold Limited (ASX:AUL) is an ASX listed emerging gold miner with its principal projects (Morning Star Gold Mine and Rose of Denmark mine) located in Victoria. The Company is singularly focused on the acquisition and return to production of historic gold mines. The Company holds a 95% interest in Morning Star Gold NL, which in turn owns the Morning Star high-grade gold project.
The September Quarter produced Gold sales of $1,773,076 including concentrate sales of $319,533. Dore containing 547 Oz gold were sold in the quarter, at an average gold price of $2,554.
There was a large focus on expanding mining operations with the commencement of development works in order to substantially increase production volumes from McNally Reef.
AuStar's vision is to become the next mid-tier gold producer in Australia.
AuStar's vision is to become the next mid-tier gold producer in Australia.
Philip Amery, Chairman of AuStar Gold is available for an interview. Contact Donna Warner, Barclay Pearce’s Chief Marketing Officer: donna@barclaypearce.com.au
To keep up to date with their news and progress, and for more information about gold investment as a whole, subscribe to the AuStar Gold Chairman's List.
