Traders can strategically buy and sell futures contracts to benefit from changes in the price of gold. Buyers of futures contracts benefit when commodity prices Sellers of futures contracts make a profit when commodity prices fall Contracts typically require a minimum purchase of 100 ounces of gold. Investors can invest in gold through exchange-traded funds (ETFs), buy shares in gold miners and partner companies, and purchase a physical product. These investors have as many reasons to invest in metal as there are methods to make those investments.
The gold ETF is a great way to own gold on paper. It's as easy as buying company shares, easily exchangeable for cash. Buying and selling can be done through your trading account. You can buy and sell during market hours from the comfort of your own home.
However, keep in mind that the shares of gold companies are correlated with gold prices, but they are also based on the fundamentals related to the current profitability and expenses of each company. On the contrary, the owners of a company, such as a gold miner, can benefit not only from the increase in the price of gold, but also from the company increasing its profits. Gold stocks generally rise and fall with the price of gold, but there are well-managed mining companies that are profitable even when the price of gold falls. This contrasts with the owners of a business (such as a gold mining company), where the company can produce more gold and, therefore, more profits, which increases investment in that business.