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Investment in gold can be done directly through
ownership, or indirectly through certificates, accounts, spread betting,
derivatives or shares.
Other than storing gold in one's own safe deposit box at a bank or in your home,
gold can also be placed in allocated (also known as non-fungible), or
unallocated (fungible or pooled) storage with a bank or dealer. In the case of
the latter going bankrupt, the client will be unable to claim the gold and would
become a general creditor, whereas gold held in allocated storage should be
returned to the client in full]. However even with gold held in allocated
storage, many gold bugs would still choose their storage provider carefully,
making sure of high net worth, with some preferring an offshore bank or storage
facility.
Gold bar
The most traditional way of investing in gold is by buying bullion gold bars. In
some countries, like Argentina, Austria, Liechtenstein and Switzerland, these
can easily be bought or sold "over the counter" of the major banks.
Alternatively, there are bullion dealers which provide the same service. Bars
are available in various sizes, for example in Europe these would typically be
in 12.5kg or 1kg bars (1kg = 32.15072 Troy ounces), although many other weights
exist, such as the Tael, 10oz, 1oz bar, 10g, or 1 Tola. Gold bars can be held
either directly (i.e. held directly by you or in your own safe) or indirectly
(held in a vault on your behalf). Because of the many difficulties of
transporting, storing and verifying pure gold bars, an increasingly popular
method of investing in gold bars for the small investor is via allocated
holdings using a gold account - see 'Accounts' below.
Coins
Three gold sovereigns and a KrugerrandMain article: Gold coin
Buying gold coins is a popular way of holding gold. Typically bullion coins are
priced according to their weight, with little or no premium above the gold
price. Among the most popular[citation needed] bullion gold coins are the South
African Krugerrand, the Canadian Gold Maple Leaf, the American Gold Eagle, the
American Gold Buffalo, and the Australian Gold Nugget, all of which contain
exactly one troy ounce of gold each. Other popular one ounce bullion coins
include the Chinese Panda, and the Austrian Philharmonic. Gold coins which are
used as bullion coins include the British gold sovereign and the Swiss Vreneli,
but these are much lighter than one ounce. Again the large Swiss and
Liechtenstein banks will buy and sell these coins over the counter. Also
available is the gold dinar which has Islamic significance.
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