Are Gold Investments Smart In Australia?

Gold Investments In Australia

Gold Investments Take An Upturn in 2016

Gold investments is one of the oldest instruments, but not many people have it in their investment portfolio today. Since the beginning of 2016, prices have surged up, which has surprised many ­– especially after a lacklustre 2015 performance. With the price rise and promising performance, there has been renewed interest in gold investments. Gold has risen to over AU$1700 in 2016, which is nearly a 20 percent increase in this year itself. Many experts believe that it could hit the $2000 per ounce mark soon too.

Historically, the metal has performed well when other modes of investment have taken a hit, especially during the global financial crisis. This makes gold a smart addition to your investment portfolio for the purpose of hedging or insurance against any drop of other investment instruments. This precious metal is valuable practically everywhere in the world, in comparison to currency or stocks, which are dependent on a strong organisation supporting their value. Gold investments have also historically beaten inflation, which is why it remains a good investment avenue, especially when you look at the current slump in global investment markets, a trend expected to continue through 2016.

Is Gold Really Worth It?

Since the drastic fall of oil prices, gold has emerged as a safer and key investment avenue. The volatility of the global economy, the exit of Britain and Greece from the European Union, the Middle East crisis and the oil price fall has led to a great degree of uncertainty across financial markets, including Australia. In comparison, gold has been known to perform well even during a crisis, making it a safe bet for you to diversify your investment portfolio.

Alternate Avenues For Gold Investments

Many investors have shunned gold as an investment opportunity because of the notion that gold must be stored and purchased physically. The truth is that investors don’t always have to purchase physical gold to diversify their investment portfolio. Here are some other options to invest in gold:

  • Gold Exchange Traded Funds (ETF): A gold ETF is a fund traded on the Australian Securities Exchange (ASX). The fund value movement replicates the gold value. Some ETF’s traded on the ASX are Betashares Gold Bullion ETF and ANZ Gold ETF.
  • Gold Mining Companies: This is an indirect, but effective method of taking advantage of increasing gold prices. The genesis stems from the fact that when gold prices rise, the share price of gold mining companies will also rise. Regis Resources, Evolution Mining , Northern Star resources and Newcrest Mining are some of the gold mining companies listed on the ASX.
  • Managed Funds With A Special Emphasis On Gold: Investors unaware of buying the right mining stocks will likely benefit more from a professional fund management service to take advantage of promising gold prices. A managed fund specialising in gold will enable investors to benefit from higher gold prices, while the investment itself is managed by professionals. Baker Steel Gold Fund and BlackRock International Gold Fund are some examples of gold-focussed managed funds.

With so many options for gold investments, it is clear that adding this strategy to an investment portfolio is prudent, enabling investors to intelligently diversify their risks, which helps them to stay protected from the volatility of the current market, currency and stock fluctuations.

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