Gold Rushed: Investing in Gold

Buying gold right now might seem crazy to some. The price has been rising rapidly, oil and other commodities have been shooting through the roof, and theres talk of an oil bubble about to burst.

So what is the common investor to do?

If you ask us, we would say buy gold. Why? Inflation is here, demand is up, and gold has dropped way off it’s high from a few months ago. Being able to invest in these times might be a great idea to even the most timid investors. And you don’t have to go spending thousands on gold bullion. You can buy just an ETF and get in on the action like that.

As we’ve suggested in the past you can buy a gold ETF like IAU from iShares, a great ETF company that provides all sorts of sector ETFs like precious metals and other commodities.

Once again, the price of $870 or so per ounce seems like a great price to buy at.

If you want to get into gold and you don’t want have gold bullion collecting dust in the corner of your safe deposit box, then an iShares electronically traded fund might be the way to go for you. With iShares IAU ETF you can own a fractional ownership of gold held by the iShares Gold Trust.

Rather than own large sums of gold you own roughly 1/10th an ounce of gold per share you own in the iShares trust. And the best part is, you can trade these easily from your regular stock trading account. This means if you buy and hold you can take advantage of long term capital gains rules rather than taking the sale of a gold bar as a fully taxed gain, as you would do if you owned gold bars.

Some people say they want to be able to hold the gold, but those same people don’t realize that when they buy stock in a company they have nothing to hold, so why not do the same with buying gold. The ETF IAU will allow you to own a piece of a precious metal that has historically held it’s value. And with the spread of wealth around the world increasing, demand for gold can only go up (or so we think).

Buying gold now during this volatile time period may be risky, but if you hold long enough, we imagine that owning an ETF like IAU will prove to be very valuable, and easy to trade.