A guide to investing in gold 

A guide to investing in gold 

Ever wondered why your grandma loved buying and hiding gold? Probably because she was thinking of the future! Your grandma might not have known it back then, but this is a type of investment. What makes gold so special, you ask? There are plenty of reasons, and trust us, after reading this article, you'll run to buy gold from the closest source. So, keep reading because we'll even tell you about a reliable place to buy it from.

There are several ways to invest in gold. You can buy physical gold in the form of jewellery, bars, and coins or shares in gold mines, gold mutual funds, and gold futures. Each method has its advantages, but we will focus on investing in physical gold in this article.

First, how did people start trading gold?

Gold has always been one of the most precious metals, even in ancient times when money didn't exist, as people across the globe wore gold jewellery. The use of gold as a currency began around 560 BC when merchants sought a unified and convenient currency to simplify trade operations. Enter the stamped gold coin—the solution that made buying and selling easier.

Gold's importance grew, eventually becoming a symbol of wealth that exists to this day. Many investors value gold for its ability to protect their wealth from inflation and diversify their investment portfolios because it's considered a low-risk option that remains resilient amid market fluctuations where other investments may falter.

How does gold protect your wealth? 

As mentioned earlier, one key aspect that sets gold apart from other investments is its ability to retain its value, unlike money, which depreciates during periods of inflation.

Here's an example to make things clearer:

Suppose your grandmother owned an ounce of gold in the early seventies when its price was around 30 JOD. Let's also assume that your grandfather saved 30 JOD in a safe box during the same period. At that time, both the ounce of gold and the 30 JOD had equal purchasing power, allowing them to buy a luxury watch or bag. Fast forward to the present, and with inflation, the value of the JOD has decreased, and the price of gold has increased. If your grandmother were to sell her ounce of gold today, she would receive enough money to purchase that luxury bag. On the other hand, if your grandfather were to take out his 30 JOD from the safe box, it wouldn't be enough to buy the luxury watch.

Isn't this enough to excite you about investing in gold today?

But gold's ability to hedge against inflation isn't the only reason it's great. 

What makes gold an enticing option to invest in? 

Profits: Imagine you bought an ounce of gold for 1,200 JOD, and after a year, its price increased to 1,400 JOD. Selling it at that point would have made you a profit of 200 JOD. The key to maximising profits is knowing the best times to buy and sell. That's why you should monitor the gold market and its price fluctuations.

Portfolio diversification: Risk diversification is one of the most important investment rules. If you're investing in high-risk stocks, gold will help you diversify risks as it's a low-risk investment, thus protecting your money from economic fluctuations.

Liquidity: When you need money, you can sell gold to earn cash quickly. There's always a demand for gold, ensuring a ready market for selling. But avoid selling when the gold market is experiencing a downturn to prevent potential losses and keep the original purchase price.

How to invest in gold?

Follow these simple steps to invest in gold:

  • Find a reliable source to buy gold

Stay vigilant and avoid falling for scams where you may buy gold at a higher price than the real market price or, even worse, fake gold! Also, make sure to avoid online stores that sell gold, as this isn't a reliable option. 

If you want to ensure the gold you're buying is real, you can buy certified gold bars from any Bank al Etihad branch. Whether you're thinking of gifting an ounce of gold as an investment in a loved one's future or aiming to diversify your investment portfolio with 1-kilogram bars, our branches offer several options to meet your needs!

  • Look for a safe place to store gold

Ensure you have a secure space to protect your gold from being stolen. If you were thinking about burying it in your backyard and waiting for a magical gold tree to grow, think again! Sadly, that won't happen. Don't worry though! We've got you covered. You can buy or rent a safety deposit box through our mobile banking app to safely store your gold. Just follow the steps here!

What about investing in gold jewellery?

If you've decided to buy gold jewellery that can serve as an accessory and an investment, it's important to know that some risks are involved. While investing in gold jewellery isn't necessarily a bad idea, it carries different risks than investing in gold bars.

Aside from not knowing for sure whether the gold you're buying from a store is new and having to save the purchase invoices or certificates to sell it again, you would also be paying for the design and manufacturing fees of a jewellery piece, making it higher than the price of raw gold.

Moreover, it's important to check the purity and karats of the gold jewellery. For example, 24-karat gold is 100% pure gold. If the gold has a lower karat, its purity decreases, reducing the value of the piece if it's melted down.

We hope you're now on your way to a Bank al Etihad branch to buy gold, ready to build a sound financial future for yourself! If you're interested in exploring other types of investments, rest assured that we provide a diverse range of options and guidance on financial planning. With our support, you can execute investments across various financial instruments, enhancing diversification and boosting your wealth. 

Click here to learn more.

Was this article helpful?
Join the feedback revolution! We're all ears, ready to absorb your thoughts and transform them into content that you enjoy!