Investing straight in commodities, such as oil or gold, tends to be more difficult for investors than investing in bonds and stocks.
A chief reason for this is that stocks and bonds are readily transferable and easily accessible to the average investor.
Habitually, commodities have been tougher to invest in due to the difficult way in which they trade over the futures and options markets. In other means, an investor can’t just buy a barrel of oil.
Gold is reachable to the normal person because an investor can easily purchase gold bullion from a bank in some cases or a dealer.
Though, with the beginning of more advanced financial instruments, gold, along with other commodities, has become much simple to invest.
The current exchange traded funds that duplicate the movements of the underlying commodity, giving investors direct exposure. Although not every commodity has an exchange traded funds (ETF), both oil and gold have ones.
For instance, the Gold Shares trades proceeding the New York Stock Exchange and can be merchandised at any time during the trading day.
Each share of the ETF represents 1/10 of an ounce of gold, so if gold is at the present time is $600 an ounce, the gold exchange traded funds will trade at $60 per share.
This investment product is one of the least and easiest expensive ways to access the gold market.
Overall, investors considering investing in gold directly have 3choices: they can purchase an ETF that reproduces the price of gold, they can purchase the physical asset, or they can trade futures and options in the commodities market.