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MoneyWatch: Managing Your Money
By Tim Maxwell
Edited By Matt Richardson
/ CBS News
In 2023's uncertain economic environment, gold can be a wise investment, providing a safe haven for your cash while diversifying your portfolio. The precious metal can also be a smart move in a strong economy because it often retains its value over time and may even appreciate. Historically, gold is known as a store of value, which means it may help to hedge against inflation. Additionally, gold's price often moves inversely to stocks and bonds, giving your portfolio an additional layer of diversification.
Understanding the price and value of gold can be tricky for any investor, but it's essential if you want to make the best choices for your investments. The price of gold fluctuates due to supply and demand, geopolitical events and economic stability, among other factors. Meanwhile, the value of gold is more subjective and can depend on your unique situation, including your financial goals, risk tolerance level and how an investment fits into your strategy.
As such, if you have $1,000 to invest in gold, it makes sense to consider the amount your money will purchase in various gold options, and how well they align with your financial goals. Start by requesting a free investors kit here to learn more about this unique investment opportunity.
How much gold will $1,000 buy?
The amount of gold $1,000 can buy depends on its current market price. Keep in mind, different forms of gold investments, such as coins, bars, or ETFs, may offer different quantities for the same amount. Let's examine how much gold, in various forms, you could buy with $1,000, using Monex's spot price of $1,938 per ounce as of early August, 2023.
- $1,000 investment in gold bullion: Approximately .5 oz, or .516 oz. gold bullion
- $1,000 investment in American Eagle Gold coins: Four 1/10 oz. American Gold Eagle coins (price based on Monex $2,396.50 ask price).
- $1,000 investment in SPDR Gold Shares ETF: 5.54 shares ($179.54 per share)
- $1,000 investment in Gold IRAs: Varies depending on specific investments within the IRA and other factors.
- $1,000 investment in gold mining company stocks: Varies per company, but $1,000 would buy you about 24.72 shares of Newmont Corporation ($40.44 per share) and 61 shares of Barrick Gold Corporation at ($16.31 per share). These two firms are among the most popular investments in the gold mining sector.
As you can see, the $1.938 spot price is more than the $1,000 investment amount, but you may be able to purchase in .5 ounce, .25 ounce or 1/10 ounce amounts. Remember, however, many gold dealers have minimum purchase amounts, such as 10 gold coins. With $1,000, you may find it easier to invest in gold ETFs, IRAs or gold mining stocks. While higher investment amounts deliver higher returns, you can reap the benefits with any deposit amount. For example, here's what $500 might buy you using the same parameters as above:
- $500 investment in gold bullion: Approximately .25 oz, or .257 oz. gold bullion
- $500 investment in American Eagle Gold coins?: Two 1/10 oz. American Gold Eagle coins *
- $500 investment in SPDR Gold Shares ETF: 2.78 shares ($179.54 per share)
- $500 investment in Gold IRAs: Varies depending on specific investments within the IRA and other factors.
- $500 investment in gold mining company stocks: Varies per company, but $500 would buy you about 12.36 shares of Newmont Corporation ($40.44 per share) and 30.65 shares of Barrick Gold Corporation ($12.31 per share).
Learn more about investing in gold and your gold IRA options with a free investment guide.
Other considerations
As with other assets, gold investing can include various fees and additional costs. For example, the costs of buying physical gold could include storage and shipping fees, insurance and premiums over the spot price.
It's also wise to consider your investment horizon, understanding that gold is often seen as a long-term investment. Gold's value may fluctuate significantly in the short term, but it is historically regarded as a stable store of value over longer periods.
"Gold is a great long-term investment where the investor should have no immediate plan to sell," says Mark Charnet, founder & CEO of American Prosperity Group. "Gold should be sold when the shares are up substantially over acquisition costs. This will take years to accomplish, which is why investing in gold is not for the faint of heart."
Learn more by requesting a free information kit here.
The bottom line
Choosing where to invest $1,000, or any amount, in gold may come down to your individual preferences, risk tolerance and financial goals. Gold may be a particularly attractive investment option in the current economic environment. As a hedge against inflation, gold may help you preserve your purchasing power and add stability to your portfolio. Of course, it's wise to consult your financial advisor or accountant to ensure investing in gold aligns with your overall investment strategy.
