Gold is hovering near historical highs. Here’s how investors can play on the fad. (Video)

Gold (GC=F) hovered at a record high of around $2,700 an ounce on Wednesday and silver traded near 12-year highs as the US presidential election between Kamala Harris and Donald Trump was just days away and most investors expected another decline bets on Wednesday. The next Federal Reserve meeting will be on November 7th.

Gold

This week, Goldman Sachs analysts predicted gold will rise about 10% to $3,000 by December 2025 due to demand for physical gold from central banks, investors pouring into physical gold-backed exchange-traded funds (ETFs), and speculative positioning .

“History shows that gold positions tend to rise in times of uncertainty and when investors seek a safe haven,” write Lina Thomas and Daan Struven of Goldman Sachs.

Retail investors looking to get involved in precious metals trading have several options, from owning physical gold to investing in mining companies. Here are some of them:

Physical gold and silver

“For gold, like silver, buying a physical asset is the safest and most reliable option,” said Alex Ebkarian, co-founder and chief operating officer of Allegiance Gold.

Ebkarian said investors should have a mid- to long-term view of the return on investment, and also understand that if gold is stored off-site, such as in a secure vault, storage and transportation fees apply. There is also an upfront premium charged upon purchase.

“When it comes to investing in bullion, I recommend starting with 1 ounce and buying well-known brands like PAMP Suisse, Valcambi,” he said.

Physical purchases can be made from local dealers, online platforms, and even major retailer Costco (COST), although the latter does not buy anything back from customers.

Buying coins also comes with a premium, from the most common to the rarest collectibles.

“When it comes to coins, it is best to focus on the products of the four largest sovereign mints in the world: the United States Mint, the Royal Canadian Mint, the Perth Mint and the Royal Mint. They produce investment grade coins that are in high demand. and extremely liquid. Diversifying your assets gives you more flexibility and options in the future,” Ebkarian said.

The most popular for both gold and silver is 1 oz. American Eagle.

“The 1 oz American Eagle coins are the most liquid, traded and recognized bullion coins in the world. They are in high demand,” said Scott Travers, executive editor of COINage Magazine and author of “The Coin Collectors Survival Guide.”

Travers said consumers should make sure coins are verified by one of the industry’s three major grading agencies, or purchase a coin tester to check them.

Gold and Silver ETFs

Another way to gain exposure to gold or silver is through ETFs, which track the price of the commodity.

The iShares Silver Trust (SLV) and Physical Silver Shares ETF (SIVR) are up about 42% year to date, while the SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) are up about 34% year to date. date.

Global physically backed ETFs saw their fifth straight monthly inflows in September, attracting $1.4 billion, according to the World Gold Council.

“The main advantage of gold ETFs is that they closely track the price of gold, making it easy to buy and sell and does not require physical storage. But ETFs charge management fees, and their prices can fluctuate depending on market conditions, beyond just changes in the price of gold, Peter Earle, senior economist at the American Institute for Economic Research, told Yahoo Finance.

Shares of gold and silver mining companies

“Retail investors have every reason to invest in gold and silver through mining stocks,” said Warwick Smith, CEO and director of American Pacific Mining Corp (USGD.CN).

“Even with competition from important metals such as copper, gold remains everyone’s favorite in 2024 and will continue to be the best-performing asset in commodity markets next year,” he added.

Year to date, the VanEck Gold Miners ETF (GDX), which consists of companies involved in the discovery, mining and processing of gold and silver, is up 33%, compared with gold’s 29% gain over the same period. Miners are catching up this year as the wider five-year period shows physical gold has performed much better.

Some experts warn that the indirect route of investing in gold adds an element of risk to the company beyond that associated with the commodity itself.

“Gold stocks carry all the risk of adverse gold price movements in addition to corporate governance risks: operational issues and company-specific factors,” Earle said.

Major miner New Gold (NGD) is up about 95% year to date, while Chicago-based Coeur Mining (CDE) is up about 110% over the same period. South African Harmony Gold (HMY) is up about 85% since the start of 2024.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her to X in @ines_ferre.

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