Is investing in gold the real deal?
They say not all that glitters is gold, but gold definitely does glitter quite well 😍
When it comes to investing, we’ve spoken about it all at SOTM; the benefits of playing the long-game in the sharemarket, how property is generally a sturdy asset and why keeping your money tucked away in a savings account - though comforting - can hold you back from a future of financial freedom.
One of the investment strategies we somehow haven’t discussed is gold and judging by the number of DMs we’ve had on the topic asking whether or not it’s legit (thanks to some recent viral tiktok videos), we thought it was about time we covered it.
How does investing in gold actually work?
In Australia people typically invest in gold in one of three ways - they trade gold via the futures market (an auction market), they invest in gold stocks or they buy physical gold, which you can do directly via places like The Perth Mint. Buying physical gold is the most standard method and you can purchase it in bars (bullions) or in coins.
Unlike the share market, you won’t earn interest from gold, nor will you earn a passive income like the one you’d receive from having tenants in an investment property, but it has proven itself a reliable asset since ancient times, maintaining its value when other assets and currencies have not.
What are the benefits?
One of the biggest benefits of gold is that it can add strategic security to your folio. While the share and property markets can be volatile, gold has proven its steadiness time and time again, earning it a reliable reputation unaffected by the external influences that can greatly impact the value of other types of investments. If you’re seeking an asset that could help safeguard your finances when the market turns, then something as sturdy as gold could be a good option.
Another major pull is its enduring appeal; gold's value transcends time, culture, borders and markets and in the face of uncertainty, gold has delivered unwavering stability which can’t be said for all investment types.
Gold is also liquid, meaning you can sell it for cash easily.
Is there anything to be mindful of?
As always, diversity is key here. We don’t want you throwing all of your pennies into the gold basket thoughtlessly. Make sure your investment plan is strategic and varied, catering to your financial position and risk profile.
The price. Unsurprisingly gold doesn’t come cheap, at the time of writing the spot price of gold is more than 2,600 Australian Dollars. Also, remember gold prices are often listed in USD rather than AUD, so don’t forget to double check the currency to avoid a nasty surprise!
Scammers. As always, it’s important to ensure you’re buying from a reputable source, not from a guy called Greg on Facebook Marketplace. To establish whether or not your source is reputable, it’s a good idea to find out where the dealer sources their gold from and to work with reliable providers like The Perth Mint.
I’m intrigued, how do I find out more?
If you’re not sure where to track down gold (beyond panning for some glitter at Sovereign Hill), then the perfect place to start is by doing some research with the team at The Perth Mint, who have been refining gold and other precious metals since 1899. Not only do they have a global reputation for the quality and purity of their products, but they’re also incredibly secure, storing more than six billion AUD of gold and silver for more than 70,000 clients in over 130 countries.
The Perth Mint is also dedicated to ethically sourced precious metals and they’re owned by the Government of WA, with all precious metals holdings bound by a government guarantee. It’s the only place in the world where you can buy gold that has an explicit government guarantee of weight and purity. What does that mean? Your gold investment is safe in their hands and if anything were to happen to your gold it would be replaced by its equivalent dollar value at their expense.
Visit The Perth Mint website to find out more about why gold could be your perfect next investment.