Ever since gold was discovered in Asia Minor around 6,000 BC, it has been coveted for its brilliance and value. For all those years, gold has held some type of worth in society, so it is no wonder why people today still want to invest in the gold industry.
However, for a beginner, it can be hard to know how and where to start. Today we will explore the different ways to buy gold in Canada and how much you can expect to pay for gold in Canada.
How Can You Buy Gold in Canada?
There are three main ways you can buy gold in Canada; you can invest in physical gold, gold on the stock market, or gold via CFDs. Some investors like to purchase physical gold so they can tangibly hold its value in their hands.
Another reason people like investing in physical gold is because it is seen as having enduring worth since it has held value in society for thousands of years. Having physical gold also means the investor does not have to rely on financial institutions or the stock market, which is known for its volatility.
If an investor purchases pure gold, it is called gold bullion and will typically come as coins or bars. You have a greater chance of profit if your gold bullion is from an LBMA-certified refinery since you can prove its authenticity to your potential buyers.
Some of the most commonly traded bullion coins that are easy to sell are the: Australian Kangaroo, American Gold Eagle, Canadian Maple Leaf, and U.K.’s Gold Sovereign.
Another facet of the physical gold market is the jewelry industry which makes up over half of the current gold demands. Often, jewelry will not be pure gold, but instead 22K, so keep that in mind when you are shopping around for the precious metal.
In recent years, the gold industry has been flooded with fraudsters, so always research your gold source before purchasing to ensure they are reputable, whether it is an online merchant or a gold broker in your neighborhood.
If you are not interested in buying physical gold, investing in the gold stock market might be a good option. As an investor, you would buy shares in a company within the gold industry, and then you would profit based on their performance. The idea is to buy low and sell high.
For example, you could invest stocks in a gold mining company, and then you would profit from the performance of the gold mining company rather than gold as a commodity.
Otherwise, you could buy units in a gold-themed Exchange Trading Fund (EFT), and a gold expert would help you manage the funds. Some investors prefer this method since they get to not only invest in the gold market but also have the support and expertise of a professional.
Keep in mind, when investing in the gold stock market, all the usual risks of the stock market will apply, so be sure to do thorough research or consult an expert.
The final option for investing in the gold industry is CFDs which stands for Contract for Difference. With CFDs, you are investing in the price movements of future markets, and you earn profit from the bond price movements.
For example, an investor will profit through a CFD even if the bond price goes down. This option is the riskiest for investing in the gold market and should be left for the more experienced investors.
What is the average price of Gold in Canada?
The price of gold in Canada fluctuates, but the average cost of one ounce of gold is between $2100-$2300 CAD. Per gram, the average price of gold in Canada is between $72-81 CAD. For comparison, you could get ~ 0.04368 ounces or ~1.4 grams of gold for $100 CAD on the current market. This amount of gold would be about the same weight as a paperclip, $1 U.S. bill, or a piece of gum.
Of course, the price you can sell your gold for will depend on its pureness and authenticity. For example, a 22K gold necklace would be worth less than gold bullion at the same weight.
As mentioned, if you purchase gold bullion from an LBMA-certified refinery, it will increase your profits tremendously because you can prove its high grade.
Many people are looking to profit from the gold industry, but not all dealers are reputable. Always thoroughly research your gold investment options and consult a financial professional if you require further support.