Gold
Bid : 3,082.65/oz
Ask : 3,091.90/oz
Silver
Bid : 34.59/oz
Ask: 34.69/oz
Platinum
Bid: 1,371.91/oz
Ask : 1,407.58/oz
Refresh in 00:00
Gold
Bid : 3,082.65/oz
Ask : 3,091.90/oz
Silver
Bid : 34.59/oz
Ask: 34.69/oz
Platinum
Bid: 1,371.91/oz
Ask : 1,407.58/oz
Refresh in 00:00

Best Ways To Invest in Gold in Australia

December 7, 2023

Australia provides numerous ways to invest in gold for its citizens and investors looking to diversify their portfolios. From traditional options like gold jewellery to modern digital investment schemes, there are several gold investment strategy options available in Australia that allow individuals to gain exposure to this precious metal.

All Gold Investment Strategy Options

There are several factors to consider for the best way to invest in gold in Australia. This includes traditional options like gold jewellery and solid gold in the form of bars and coins. By assessing these various gold investment strategy options, investors can determine the most suitable avenue.

Investing in Jewellery

One of the customary options is to buy gold jewellery. Individuals have been buying gold ornaments like earrings, chains, necklaces and bangles for generations not just for adornment but also as a form of investment. Jewellery allows investors to benefit from the intrinsic value of gold as the precious metal itself makes up a significant portion of the product weight. 

However, jewellery as an investment comes with certain issues. Making charges and variances in purity bring down its resale value making it difficult to cash in at the market rate of gold. Storage and safety of jewellery items is also another factor to consider.

Investing in Gold Bars and Coins

Another traditional option for Australians looking to invest in gold is to buy solid gold in the form of biscuits, bars or coins. These allow investors to own 24-carat or 99.99% pure gold without any additional costs associated with making charges or purity variances seen in jewellery. Popular choices include Gold Kangaroos from The Perth Mint which provide a legal tender option in addition to gold value.

Storage is hassle-free as solid gold has fully assured purity and liquidity when compared to other less direct options. This makes solid gold one of the best ways to invest in gold in Australia with reliable storage as well as appreciation potential.

Gold Schemes (Saving Instruments)

Other innovative options include various saving instruments or schemes launched by banks and non-banking financial institutions. These allow individuals to invest in gold without actual storage through digital purchases. For example, several entities offer gold savings accounts where investors can save periodically in gold. The equivalent quantity gets credited to their account with assured liquidity. Some even provide options like loans against gold and bonuses on quantity held till maturity.

Gold bars and coins, a symbol of wealth and prosperity, gleam in this image.

Digital Gold

An increasingly popular way of investing in gold is through digital gold. It allows investors to purchase gold online, wherein the quantity gets credited to their Demat account. Account holders have full ownership of the gold and can take physical delivery or sell it back at live market prices. Features like fractionally investing even with small amounts and high liquidity make digital gold an attractive investment option.

Sovereign Gold Bonds

Sovereign Gold Bonds issued by the RBI provide yet another way for Australians to invest without holding physical assets. These bonds are denominated in grams of gold and are substitutes for holding gold in tangible form. With a tenure of 8 years and an interest rate of 2.50% per annum, they offer a dual advantage of regular interest as well as capital appreciation on redemption linked to market rates. An additional incentive of 0.5% per annum for the last four years of the eight years is also given. 

Gold Exchange Traded Funds

ETFs listed on the Australian stock exchanges provide another cost-effective and convenient way for investors to gain exposure to gold prices through diversified and transparent investment conduits. ETFs track domestic and international gold prices and allow buying and selling of units during market hours similar to any share. Unlike physical gold, ETFs involve no hassles of storage while offering almost equivalent returns.

Gold FOFs

For investors seeking well-diversified exposure to gold without direct ownership, Gold Fund of Funds (FOFs) is another avenue. These mutual fund schemes invest predominantly in a basket of domestic and international gold ETFs and funds. This provides benefits like expert management and savings on transaction costs for small investors. 

Given their diversified nature, FOFs reduce volatile swings seen in individual funds or ETFs. Similar to mutual funds, they allow regular investing through SIPs for systematic allocation to gold over the long term.

gold bars and money on wooden table. A symbol of wealth and financial security.

Why Invest in Gold?

There are several compelling reasons Australians have opted to invest in gold over the years. As a precious metal, gold holds a unique position within portfolios owing to characteristics like global acceptance, limited supply and proven history as a dependable store of value during periods of economic uncertainty and inflation. Learn more about why you need to invest in gold.

Golden Gold Investment Tips

  • Research thoroughly and understand intrinsic worth beyond short-term price swings
  • Maintain 5-10% portfolio allocation to gold for effective diversification
  • Choose reputed traders/refiners for physical gold and trust brands like Perth Mint for coins and bars
  • Optimize liquidity through low-cost ETFs and mutual Funds for smaller investment amounts
  • Start SIPs in Gold Funds for the benefit of rupee cost averaging on prices
  • Assess taxes and duties for applicable forms like capital gains before opting for physical options
  • Insure gold assets properly based on value for protection from risks
  • Rebalance portfolio periodically by booking profits from gold during rallies
  • Seek professional advice to determine risk profile and suitable options

Final Words 

In summary, gold stands out as a vital diversifier within investment portfolios for Australians due to its intrinsic characteristics. From time-tested bars and coins to modernized ETFs, there are numerous avenues to gain optimized exposure proportionate to goals and risk tolerance. While higher volatility relative to other asset classes may deter some, gold survives and strengthens through economic cycles as a proven store of value. 

With careful research and due diligence in selecting options, investors can build resilient portfolios through prudent gold allocation over the long term. Adhering to golden tips also ensures making the most of this valuable commodity over different market conditions. Overall, gold ensures stability for investors and creates a strong foundation towards meeting financial objectives.

Categories

Latest Posts