A little while ago I wrote why I think gold is a bad investment, since than gold’s price has increased even more, reaching new highs. Investing in gold seems to be getting more attention. People invest in gold for different reasons and recently I got an email from a reader asking “if gold is a bad investment, why do people still invest in it?” I can’t really answer for everyone, but there are variety of reasons why people invest in gold and just because I think gold is a bad investment doesn’t mean others agree. Let’s look at some common reasons why people invest in gold.

Investing in Gold
Investing in Gold

Why Invest in Gold?

The US Dollar and Gold move in opposite directions, currently the US Dollar is weak and seems to be getting weaker due to economic policy, most do not see an end to this weakness and believe gold will increase in value because of it.

Inflation protection. In the past gold has been a decent protection against inflation, in high inflationary times gold tends to rise quickly. As the government printed trillions of dollars inflation is inevitable in the future, as inflation hits gold prices will continue to rise.

Not Controlled by Government– Gold is a commodity and the government does not control it, there is only a limited amount of gold available. Current gold production is not keeping up with current global demand for gold, as demand increases so do gold prices.

How to Invest in Gold

Maybe you do believe gold is a good investment but not sure how to invest in gold, here are a few ways one can invest in gold.

Gold Funds
With the recent gold buzz more and more gold mutual funds have come to existence, pretty much every mutual fund company now offers gold funds. You can also look at ETFs and gold index funds.

If you are looking for bullion check out your financial institutions, most banks offer bullion to their clients. You can also purchase storage room from them if you do not have a safe place to keep them.

Depending on who your broker is, you can probably purchase bullion from your brokers.

Buying Gold Online
You can now buy gold online, there are many online websites you can purchase bullion from, I wouldn’t trust every site I go on so do a little bit of research.

Are you a believer in gold investment? How do you invest in gold?



Ray is an ex-financial adviser and the founder of Financial Highway. Currently working in the financial industry and working towards completing his Chartered Financial Analyst, CFA, designation.