NEW YORK (Commodity Online): Following a huge rise in Gold prices last week and in the beginning of this wee, pundits in bullion markets have advised investors to rush to buy gold as the yellow metal is all set to cross $2,000 per ounce in the coming months.

There was a 26.3 percent rise in the price of gold so far this year — to a record $1,130 an ounce this week.

And, this is not the end of it, say analysts. As long as the US remains under pressure to print more money to help fund the stimulus plan, the dollar will remain under pressure — giving lift to gold.

Anyone who believes that the world is in a time of fiscal uncertainty should own gold. Those who believe that this economic credit crisis will be protracted and that the dollar will continue to devalue as a result of government policy should have exposure to gold.

You can either buy gold bars or gold coins. Coins can be a better option because of the premium they command if gold continues to go higher.

Gold coins, new and old, tend to have better liquidity than gold bars. Popular gold coins today include the American Eagle, the Australian Kangaroo Nugget and the UK Britannia. Please remember that just like any other investment vehicle — gold is very risky when held as a disproportionately large part of the portfolio. Also, the price of gold can drop as fast as inflationary fears dissipate and the dollar strengthens.

Gold bars are made by only a select number of accredited companies globally. A number of companies offer investors the opportunity to buy Gold bullion in weights of 10 oz. and 1 kg. Make sure to research companies to make sure they are legit.

Buying shares of gold-mining companies, Exchange Traded Funds (ETFs) and shares of gold-focused mutual funds are three of the best ways to get in on the gold rush without having to cart it home.

With the stocks, some companies have locked in — or “hedged” — the price that they will receive for each ounce of gold that they sell over some future period, thus, capping their upside. But, even the companies with hedged books will still enjoy strong earnings if demand persists, and the stocks can more than the price of gold itself. Companies that show the greatest upside potential include AngloGold Ashanti Ltd. (AU), Compania de Minas Buenaventura SA (BVN), and Gold Fields Ltd. (GFI) — and each has seen its share price more than double in the past 12 months.

The most widely held gold ETF is the streetTRACKS Gold Shares (GLD), which trades like a stock but whose price reflects the performance of the price of gold bullion. The Trust underlying the ETF holds gold, and issues baskets in exchange for deposits of gold. There’s also iShares COMEX Gold Trust (IAU).

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook