Gold prices have been hitting record highs almost every day in recent weeks. For investors trying to figure out what to do, the situation gets more confusing when expert opinions on the outook for the yellow metal are as diverse as they are contradictory: Goldman Sachs says prices will hit $1650/oz within 12 months, but French bank Natixis says prices will actually decline in 2011 as the global economy recovers.
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While Uwe Parpart, Chief Economist and Strategist for Asia at Cantor Fitzgerald, says all investors should own some gold in their portfolio, it’s easier said than done, as predicting the price of gold is just as tough as timing the stock market.
There are many ways to buy gold. You could buy an exchange-traded fund (ETF) such as the SPDRs GLD, mining stocks, futures contracts on the precious metals or the physical bullion itself. Each of these has its pros and cons.
Buying gold and storing it in a vault costs money and isn’t always practical for retail investors. Instead, John Stephenson, who’s written The Little Book of Commodity Investing, recommends investors buy shares in mining companies. Read more
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