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The price of gold has been on an upward trend over the last few months as high inflation, geopolitical tensions and elevated interest rates have continued to negatively impact the economy. With more investors seeking out assets that can help to protect their wealth, the demand for gold has surged, propelling gold’s value higher — and leading the price to hit a new record of over $2,400 per ounce in late May.
Between gold’s price performance and its reputation as a reliable store of value, even more investors are now seeking out opportunities to add gold to their portfolios. And, one popular option that has garnered significant interest recently is 1-ounce gold bars. These compact, easily tradable gold bullion products offer a tangible way to own physical gold and can be an effective diversification tool or inflation hedge.
But while 1-ounce gold bars may seem like an attractive investment choice, they come with their own set of considerations. Aside from the initial purchase cost, there are additional expenses, such as storage fees, insurance premiums and custodian costs, to consider. And, not all investors want to navigate the process of buying and selling physical gold (and the logistical complexities involved). Fortunately, there are a range of alternatives to consider if you want to capitalize on gold’s upward momentum without owning physical bullion.
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1-ounce gold bar alternatives to consider this June
As we enter the month of June, here are some other gold assets worth considering:
Gold exchange-traded funds
Gold exchange-traded funds (ETFs) may be a good alternative to consider this June because they provide a convenient and cost-effective way to gain exposure to gold’s price movements without the need for physical possession. When you buy shares of a gold ETF, you’re buying shares of a fund that holds actual gold bullion. This, in turn, allows you to gain similar liquidity to owning physical gold, but without taking direct physical delivery or covering associated storage and insurance expenses.
Ready to buy in? Learn more about your top gold investing options here.
Gold mining stocks
Investing in shares of gold mining companies can offer you leveraged exposure to gold price appreciation, making gold stocks another option worth weighing this month. That’s because gold miners’ profit margins expand when the value of gold bullion increases, like it has in recent months. As such, gold mining companies’ stock prices tend to appreciate at an amplified rate — even compared to the metal itself.
However, it’s worth noting that gold stocks also carry inherent operational risks that increase volatility. In turn, you may want to ensure that you’re educated on how this type of investment works if you want to mitigate the potential risks and maximize the potential returns on your money.
Gold futures and options
If you’re a more experienced or seasoned investor, gold futures and options contracts may be worth a look this June. These investments, traded on commodity exchanges, provide you with opportunities to speculate on short-term gold price movements or hedge existing positions.
But while investing in gold futures and options can offer amplified upside, this type of gold investment also comes with a risk of large losses due to leverage. So, before taking this route, it’s imperative that you fully understand the complex trading strategies associated with this type of investment. Otherwise, the risks could far outweigh the rewards.
Gold mutual funds
Gold mutual funds may also be worth considering this month if you’re looking for an alternative gold asset to invest in. Rather than the funds directly owning gold bullion, these actively managed funds invest across a diversified basket of gold-related equities, like precious metal miners, royalty companies, ETFs and, in certain cases, some physical metal.
That said, while gold mutual funds provide you with professional portfolio management, they also carry higher expense ratios. They can also come with a risk of underperformance compared to other gold assets, so be sure to weigh the pros and cons of this option before making a decision.
Gold jewelry and coins
While not primarily investment vehicles, gold jewelry and collectible coins can serve as alternative ways to own physical gold. And, in addition to investment purposes, collectible gold jewelry and coins can satisfy the desire for direct, tangible ownership while potentially accruing numismatic premiums over time. So, if you’re looking for a way to invest in physical gold but aren’t ready to buy 1-ounce gold bars this June, gold jewelry and coins might make sense.
However, this type of gold investment tends to have higher markup costs versus standard bullion products. And, gold jewelry and coins may also offer less liquidity compared to 1-ounce gold bars (or other types of physical gold bullion), so the potential downsides could outweigh the benefits of simply buying gold bars instead.
The bottom line
While the allure of 1-ounce gold bars may be strong right now, it can still make sense to explore the diverse range of gold investment options available to you. By considering alternatives like gold ETFs, gold mining stocks, gold futures, gold mutual funds, or even gold jewelry and coins, you can tailor your gold exposure to your specific needs and preferences, potentially enhancing your returns while managing risks.