Cashing in on Gold: What are the 2022 Demand Trends and How to Invest

For investors, gold is deemed as one of the safest investment options, due to its tendency to hold up well against inflation in the long term. What is more, it has been reported that the demand for gold increased by 10% in 2021. This makes the year 2022 the perfect time to invest in gold. Read on to find out what the gold demand trends are and what kind of investment options you have before you take the leap and make this sizeable investment.

Purchase gold bullions

As the currencies, such as the dollar or euro take a face dive, the value of gold usually skyrockets. That’s why it’s wise to purchase physical gold. When talking about investing in gold, probably the first association for many are gold bars, also known as gold bullions. You can buy them from a dealer, brokerage, or bank. They come in different sizes, but for new investors, it’s advisable to take the smaller ones. You may even go for gold coins. Then, you should pay attention to gold prices to be able to sell the gold at the right moment. The only downside to owning physical gold is that there is a chance that you might get robbed. Therefore, you need to find a safe place to keep your gold bullions. For example, you can choose to store it in a safe at your home, or in a bank.

Invest in a gold futures contract

Buying a gold futures contract can be a viable option for those following gold value trends. The way this works is you pay for gold at a set price and agree to receive the gold at a future date. Then, you may wait for it to be yours or sell the contract before it expires.

Generally, the price of these contracts is much lower than the value of the gold, allowing you to gain a substantial profit when you sell it. However, keep in mind that there are risks to this kind of trade, as you may suffer losses greater than your initial investment. That’s why, if you choose this option, you need to keep up with the prices of gold to be able to predict future trends, as well as be very well aware of the potential risks.

Buy gold jewelry

Another way to cash in on gold is to buy and sell gold jewelry. Second-hand gold jewelry can be a great option, as some jewelry stores buy and refurbish or repurpose such jewelry. It costs less, so it can be a viable way for new investors to get started. Keep in mind that you need to make sure that you buy jewelry from a legitimate dealer, so as to avoid getting conned. Some dealers may try to sell you fake gold, so you need to be extremely careful. Then, you can sell the gold you purchased to reputable gold buyers, such as jewelry stores.

Invest in gold mining stocks

If you aren’t keen on holding onto physical gold, due to reasons such as storage or insurance costs, you may consider investing in gold mining stocks. This kind of investment works practically the same as purchasing any other stock. You can choose any gold mining company that you find trustworthy. The risks are practically the same as with any other stock investment, as the gold stock prices may drop at any time for a range of reasons, such as unfavorable market conditions. However, there are major advantages, as you may generate a substantial return of investment (ROI). That’s because even a minimal rise in the price of gold can result in a major increase in the value of gold stocks. You may also benefit from choosing the stocks that offer dividends, as such stocks have shown to do better than those that don’t pay dividends.

On a final note

As you’ve seen, there is a range of ways you can invest in gold. No matter if you choose to invest in physical gold, or you’d rather buy stocks, there is a good chance you’ll be able to cash in on your investment. As with any investment, there are risks, so you need to be mindful of current gold prices and any change in circumstances that you may be able to predict.

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