For us, the best type of gold to buy are physical gold bars. The precious metal has been valued for centuries as a safe haven in which to cultivate and store wealth, and physical ingots best reflect these qualities today. Gold bars also give you the flexibility to invest in small amounts of gold. Your investment in gold can be as small as 1 gram or an ounce.
Futures contracts are traded on the commodity exchange (COMEX), managed by the Chicago Mercantile Exchange (CME). Speculators and large commercial interests use them to “bet on the price of gold” or to hedge their position in gold. Gold futures entitle the holder to receive physical gold at a predetermined time in the future, usually one month, but contracts are usually settled in cash. The minimum size of a gold futures contract on COMEX is 100 troy ounces.
It's very common to think that gold rises when stocks fall, or that American gold tends to perform well during a recession, but not 100% of the time. Regardless of the form it takes, even having a modest gold allocation of 1% to 5% in a portfolio helps provide long-term diversification. Gold coins, ingots, and other tangible assets are only part of a balanced investment plan. Think of them more like an insurance policy.
Investing in gold stocks, ETFs or mutual funds is often the best way to expose yourself to gold in your portfolio.