Of all the ways to invest in gold, the riskiest is trading futures or options contracts, a form of speculative investing. Futures and options are derivatives, meaning their value is based entirely on the price of an underlying asset. Gold bullion comes in bars ranging from a few grams to 400 ounces, but it’s most commonly available as one- and 10-ounce bars. Given that the current gold price is around $1,900 per ounce , this makes investing in gold bullion an expensive proposition.

Theoretically, it’s possible to form gold by the nuclear processes of fusion, fission, and radioactive decay. It’s easiest for scientists to transmute gold by bombarding the heavier element mercury and producing gold via decay. Bond yields probably need to peak, but it might not be plain sailing for gold when they come down. They are only likely to do so if inflation is perceived to be comfortably heading towards target. That would then make bonds attractive again from both a more compelling real return and a likely lower bond-equity correlation.

This method makes sense for “investors who are willing to bear the added risk of being exposed to an individual company’s performance,” says Morningstar’s Mills. That brings into play issues like the quality of the company’s management, how much gold it has in the ground, and how much it’s going to cost to get it out. The IRS views profits you earn from trading physical gold and other collectibles differently. If you own physical gold for less than one year, gains are taxed as ordinary income. If you own physical gold for longer than one year, gains are taxed at a maximum 28% rate. Gold doesn’t produce income like bonds or dividend-paying stocks.

Precious metals are rare metals that have a high economic value, such as gold, silver, and platinum. She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies for financial brands.

How to Buy Gold: 4 Ways to Invest

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Any gold dealer—either in-person or online—can assist you in the purchase of physical gold. However, you’ll want to make sure the dealer you’ve chosen is reputable. Gold coins, like the American Gold Eagle or Canadian Maple Leaf, are popular collectables.

This can be purchased on the stock exchange and transferred in the same way as a share. When you think about investing in gold, don’t restrict yourself to just buying physical gold, like coins or bullion. Alternatives to invest in gold include buying shares of gold mining companies or gold exchange-traded funds . You can also invest in gold by trading options and futures contracts. Just remember, like gold stocks you aren’t buying gold, just paper that is theoretically backed by debt or equity of mining companies or futures and options contracts for physical bullion. This means the value of gold mutual funds and ETFs may not entirely match up with the market price of gold, and these investments may not perform the same as physical gold. Another way to invest in gold for beginners is to combine physical assets with traditional stocks.

As of September, gold accounted for 11.2% of its holdings, according to WGC data. U.S. Global InvestorsThe list of biggest buyers during the third quarter was dominated by emerging markets as countries continue to diversify away from the U.S. dollar. In the top spot was China, which added a massive 78 metric tons of gold, followed by Poland and Turkey . If you’re still on the fence, take a look at what the official sector has been up to. Central banks bought a collective 337 metric tons of gold in the third quarter, marking the second-largest third quarter on record, according to the latest report by the World Gold Council .

If you’re concerned about inflation and other calamities, gold may offer you an investing safe haven. Though in the shorter term it can be just as volatile as stocks, over the very long term, gold has held its value remarkably well. You may also opt to buy gold you can wear—or that someone once wore but has been damaged—in the form of gold jewelry. Investing in gold jewelry, however, carries many risks that investing in pure gold doesn’t.