Monday, 7 November 2011

How to make money through gold

The price of gold is embarking on a pretty remarkable upward trajectory at the moment. This month it hit another new high, at $1,387 an ounce, having frequently hit new record highs across the year already.
So why is the price jumping? And how do you go about making money from gold?

Hedging your bets

There are a number of different theories on just why the price of gold is rising so consistently. Some experts reckon that rising prices are here to stay, driven by the emerging middle classes in nations like China, India and Brazil.
However, in the short term, much of the price rise is down to investors looking to hedge their bets against the risks of both inflation and deflation, or looking for a form of back-up currency against the increasing difficulties in the foreign exchange markets.
And that demand from investors is only likely to increase if various central banks continue with stimulus programmes which weaken the value of paper currency and increase inflation.
So how do you go about getting involved with gold?

Buying bullion

One way of investing in gold is to buy the actual gold bullion in the form of coins or gold bars.
There is a wide range of coins to choose from, printed by governments across the world. However, UK investors tend to stick to two main types, sovereign and kruggerrand. So what’s the difference?

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