Stockpiling gold has been a favorite pastime of the wealthy throughout history, and the gleam of gold is still irresistible to many investors today. Some people like the fact that gold is a tangible commodity that will retain its value even if paper currency loses its value, while other investors are attracted to the liquidity of gold. This article offers several ways to add gold to your investment portfolio.

Steps

Buy Gold Bullion

1. Decide what type of investment-grade gold bullion to buy. The choices are gold coins and bars.
   • The American Eagle Gold Coin is made from 22-karat gold mined in America. Other gold bullion coins include the Canadian Maple Leaf, Australian Kangaroo, South African Krugerrand and 24-karat Austrian Philharmonic.
   • Gold is also sold in bars that are usually 99.5 to 99.99 percent fine. The popular gold refineries include PAMP, Credit Suisse, Johnson Matthey and Metalor, which will be stamped on the bar.
2. Choose a weight to buy.
   • The American Eagle Gold Coin and the other coins listed in Step 1 are made in four weights: 1 oz., 0.5 oz., 0.25 oz. and 0.10 oz.
   • Gold bullion bars are sold in grams or ounces and include 1-oz., 10-oz. and 100–oz. bars.
3. Find a source that sells gold bullion. Often the same dealers, brokerage houses and banks sell both coins and bars.
4. Look online or call the source to find out the current market price for gold. Verify this price with at least one other reputable source.
5. Buy gold coins or bars at the prevailing market price, plus a premium of approximate 1 percent. Most dealers have purchase minimums, charged for shipping and handling, and offer quantity discounts.
6. Store your gold, preferably in a safety deposit box.

Buy Gold Futures

1. Open a futures account at a commodity trading firm. Futures allow you to control a higher value of gold than you have in cash.
2. Invest risk capital that you can afford to lose. If the price of gold drops, you could end up owing more than you invested, once commissions are added.
3. Buy a gold futures contract. Each trading unit on COMDEX is equivalent to 100 troy ounces. Electronic trading on the Chicago Board of Trade (e-CBOT) is another way to trade gold. Gold futures is a legally binding agreement for delivery of gold in the future at an agreed upon price. For example, you can buy 100 oz. of gold for a 2-year contract worth $46,600 for as little as 3 percent of the value, or $1,350. The commodity trading firm charges a commission for every trade.
4. Wait for the contract to end and collect your earnings or pay your losses. An investor can exchange a futures position for physical gold, referred to as EFP. However, most investors offset their positions before the contracts mature instead of accepting or delivering physical gold.

Buy a Gold Exchange Traded Fund

1. Buy a gold exchange traded fund. Use the same broker or online broker you would use to buy a stock or mutual fund to buy shares in a gold exchange traded fund, such as GLD on the New York Stock Exchange. A gold exchange traded fund is designed to track the price of gold, while maintaining the liquidity of a stock.
   • Note that gold exchange traded funds do not give you the ability to physically control the gold. Thus some gold advocates believe this is an inferior way to own the commodity.[1]

Tips

• The United States Mint website offers a database of coin dealers listed by state.
• Buying bullion is limited to weekdays during trading hours from 9 a.m. to 5 p.m. EST.
• The commission rate on gold futures trading is negotiable.

Warnings

• Never pay significantly more than market price for gold bullion. There are gold scams out there.
• Make sure you can tell if the gold is real to avoid wasting your money on fake gold.