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Money Smart: How to invest in precious metals

The demand for precious metals has increased as a safe haven throughout the coronavirus crisis. Here are 3 ways to invest in the valuable metals.

SAN ANTONIO — The coronavirus pandemic has filled the year with economic uncertainty. Precious metals like gold or silver have been an attractive investment to protect against inflation. For example, the price of an ounce of gold in 1970 was about $35. Today, an ounce of gold is roughly $1,950. If you don't know how to start, here are 3 way to begin investing in this hard asset.

1. Buy in physical form

“You have to decide on bars. You have to decide whether it’s a coin. You’re going to have to decide where to buy it and where you’re going to store it,” said Karl Eggerss, senior wealth advisor and partner of Covenant. “If you decide to buy physical gold, you have to go with a reputable dealer. There is a big spread on gold. So, when you go to buy gold, there’s a big premium they’re going to put on it. You’re going to have to pay that.”

2. Exchange-Traded Funds

“Trades on the New York Stock Exchange and it literally, tracks the price of either gold or silver. That’s an easy way to go and benefit from the price of gold or silver going up without having to physically go buy,” said Eggerss.

3. Stocks

“Look at companies that actually, mine gold or silver. So, forget about the gold prices. If you think they’re going up, gold or silver, typically, the companies that mine gold or silver would generally move more or less than the actual price of gold or silver. Therefore, you might actually, benefit from buying the miners that mine for gold. That can simply be done with your brokerage account on the New York Stock exchange,” he said.  

While precious metals have proven to be a long term store of value, the prices will fluctuate.

“There’s an old saying, when you go buy gold or silver, that when you buy it, it’s the Mona Lisa. Meaning it’s priced very high. And then, when you sell it they weigh it. Meaning they just give you what it’s worth. So, take that into consideration that it may not be as easy to sell, as it was to buy,” said Eggerss.