Gold’s price dropped below $1,700 an ounce on July 21, 2021, as a strong US dollar overwhelms the value of gold. Since then, gold has made up a little ground and is now down around 1% year to date – considerably better than the S&P 500, Dow Jones Industrial Average, Nasdaq Composite, and many other prominent equities.
Here are three different options for purchasing gold right now.
1. Top gold ETFs
Gold exchange-traded funds (ETFs) allow you to invest in gold without the trouble of storing real bullion. They also minimize the potential for theft or loss, since they are more liquid than physical bullion and can be sold quickly when investors want to cash out.
The iShares Gold Trust, which has net assets of $29.8 billion, and the SPDR Gold Shares ETF, with net assets of $61.34 billion, are two well-known gold ETFs. Both have similar expense ratios (0.25 percent for the iShares Gold Trust versus 0.4 percent for the SPDR fund). Both funds, however, operate in a similar way as they each maintain and insure actual gold in a trust. The iShares Gold Trust has 501.4 metric tons of gold or 16.120 million ounces on July 28, 2022, which is the most recent date for which data is available.
2. A basket of mining stocks
Gold miners like as Newmont Corporation (NEM -1.16%) and Barrick Gold are riskier ways to invest in gold. These companies account for over 35% of the VanEck exchange-traded fund, which has 54 holdings in total. The fund is one of the biggest gold ETFs on the market, with a market cap of about $10.93 billion. However, it is down 20% this year and almost 40% from its peak owing to the fact that gold mining stocks are very sensitive to rising gold prices.
Each miner is subject to its own set of risks, some of which may result in unfavorable outcomes. Last week, New Gold’s important mines were hit by bad weather, sending the stock plummeting over 30% in the early hours of trading on July 12. The good thing about the VanEck ETF is that it spreads that risk across several miners from different countries while providing services for just 0.51 percent.
3. A top miner with a high yield
Newmont has by far the greatest market capitalization of any U.S.-based gold mining company, with a valuation of around $36.1 billion.
Newmont has operations in Australia, North America, Africa, and South America. And that’s just for starters because it offers a portfolio incomparable in the business sector.
Newmont also pays a $0.55 quarterly dividend, for a yield of about 4.8%. Newmont’s role as a source of passive income helps to offset the cyclicality in the gold sector.
Newmont’s dividend is determined by the state of the market, which has fluctuated widely in recent years. However, despite gold’s modest returns over the previous five years, Newmont’s payout has continued to grow.