by Bob Trowbridge

Created on: March 04, 2007   Last Updated: April 13, 2007

There are many ways to trade dollars for gold. You can buy gold bullion in bar form or coin form for a premium over the spot (current) price of gold. You can either take possession of the bullion or pay a small amount to have it kept in a vault for you. You can buy gold coins from many different nations. Their prices will vary according to the exchange rate between the US and the other country. Coins and bullion can be bought online or at most coin stores. You can buy gold certificates, which also represent gold that is held for you in a vault.

Now you can invest in gold through an Exchange Traded Fund (ETF). A gold ETF trades close to the spot price of gold. You can buy it just like you would a stock and sell it the same way. The ETF holds a certain amount of physical gold to cover the amount of gold it has sold.

A more indirect way to invest in gold is through gold mining stocks. The stocks carry a higher risk than gold bullion or coins, but both are risky. The stocks have the possibility of a higher return than physical gold but, as I said, carry a higher risk.

Gold and other precious metals are in a bull market right, although they took a hit this past week when the DOW crashed to its lowest in four years. Nevertheless, precious metals are on the rise and the bull market is expected to last at least a few years more if not longer. There is still time to get on this bull but you'd better have the money and the stomach for it.

As for me, my gold coins (the first ones I bought) are up over 100% in value. My highest current precious metals mining stock is over 700% in gains. My entire portfolio, which is mostly precious metals along with some base metals and energy stocks, is up over 100%. That includes a number of my stocks which are losing money.

If you think the economy is solid, you don't need gold or precious metals. If you think it's shaky, it might not be a bad idea to have some on hand.

Peace

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