Gold Reports

Despite being one of the world’s top producers of iron ore, the Pilbara region is now experiencing increasing gold exploration as a result of a significant finding made in 2017 by Novo Resources and Artemis Resources. Your portfolio can benefit greatly from diversity by adding some gold shares. This is because investors regard gold as a safe-haven asset – meaning it tends to keep its value, even during a weak market or recession.

In a down market, exposure to gold can therefore help shield your portfolio from severe losses. Investors will start placing their money into gold, which will increase the price, as shares and other risky assets decline. As a result, your gold shares may increase in value even when the prices of the majority of your other shares decline.

Benefits to Investing in Gold

Many of the same advantages as buying gold directly may be obtained by investing in gold stocks. Among the primary benefits are:

• Diversification: We’ve previously discussed the advantages of diversity that come with gold investment. As gold often resists share market declines, it is an excellent method to shield your portfolio from big losses during a downturn.
• Reduced price volatility: Compared to the price of stocks, gold’s price has a lower volatility over the long term and is more stable. At times of turbulence in the stock market, this might help you feel more at ease.
• Hedge against inflation: When inflation increases, the value of your investments may be swiftly lost. Yet, historically speaking, gold has beaten inflation, making it a superior store of value.

Risks

Low-returning – gold has established itself over time as a reliable store of wealth. It is often a low-risk, low-return investment as a result. This means that unlike certain growth shares, its value is unlikely to increase rapidly.

Company-specific hazards – In addition to the price of gold, you can also be subject to additional risks depending on the type of gold share you invest in. For instance, a mining exploration business may run out of money and cease operations, or production costs for some miners may rise, adversely affecting revenues.

Investing in Physical Gold

Physical gold is frequently recommended by professionals as a safe entry point into the market for Australians wishing to invest in the gold sector. Investors may purchase and sell as much physical gold in Australia as they like because there are no minimum or maximum limits on the quantity of the yellow metal that can be kept in one’s possession by the government.

Although it’s important to keep in mind that certain banks technically do not allow the storing of gold, this is stated in the terms and agreements that clients must agree to when they register. Australian residents who are private investors should also be aware that actual gold cannot be insured.

Exemplars of Physical Gold Purchases are:

• Bullion coins — The mint offers the Australian Kangaroo, a gold coin containing 1 ounce of 99.99 percent pure gold.
• Minted bars — The Perth Mint also gives investors the option to buy minted bars in eight different sizes ranging from 1 gram to 10 ounces. The minted bars are 99.99 percent pure gold.
• Cast bars — The mint describes cast bars as “one of the most cost effective and convenient ways to buy precious metals.” These 99.99 percent pure gold bars range in size from half an ounce to 50 ounces.
  
  

Investing in Gold ETFs

ETFs, or exchange-traded funds, are another well-liked method of gaining exposure to the gold market. They are easily accessible and tend to be less dangerous because they trade like stocks on an exchange.

Gold ETFs available for purchase on the ASX are:

• Global X ETFs Australia — Previously ETFS Metal Securities Australia, this ETF has been listed on the ASX since 2003, with a management fee of 0.4 percent. With this ETF, one share represents about a tenth of the spot gold price.

• Perth Mint Gold ETF — The Perth Mint Gold ETF also launched in 2003, but has a much lower management fee of 0.15 percent. It also doesn’t have the same level of liquidity as Global X ETFs as it trades at about a fifth of its size.

• BetaShares Gold Bullion ETF — The BetaShares Gold Bullion ETF is unique from the two ETFs listed above as it tracks the US gold spot price, providing “purer” exposure to the US spot gold price. BetaShares units are equal to one-hundredth of the US spot gold price.

• Van Eck Vectors Gold Miners ETF — Launched in 2015, this ETF provides diversified exposure to gold-mining companies. While only 12.4 percent of its holdings are ASX-listed stocks, its top 10 constituents include two Australian companies, Newcrest Mining and Northern Star Resources. The management fee is 0.53 percent.