A Note on Gold

Gold is a fascinating asset and concept. From Egyptian Pharaohs to Sir Isaac Newton to the “Nixon Shock” in the 1970’s, gold has been part of the story. Oh, and by the way, its price has risen over 35% so far in 2020.

Over the years there have been reasons (and not) for an investor to buy gold. One of the “catches” is that gold can be an extremely volatile asset, depending on the global economic cycle, level of interest rates and expectations for inflation. Another catch is that there are multiple ways for an investor to buy gold. Among these ways is to purchase gold in its physical form and insure and store it (expensive) or to purchase gold jewelry or gold wristwatches (also expensive but much simpler). OR, gold can be purchased in a non-physical form through gold futures contracts or via an exchange traded fund, or ETF, like the super-widely held SPDR Gold Trust whose trade symbol is GLD. The GLD trades like a stock and may be the closest way to own gold without having actual possession of the gold bars or coins.

bullion gold gold bars golden
Gold as an investment is not always as glittery and beautiful as the pure form.

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