Derivative Gold Investments
Derivative gold investments are those, which do not involve taking physical possession of actual bullion bars and coins. Rather, investors conduct electronic, and paper transactions via banks, or various gold investment entities. It’s true that bullion bars can be purchased at major banks, but such a transaction obviously isn’t considered to be a derivative gold investment. Rather, transactions like ETFs (Exchange Traded Funds) are one of today’s popular derivative investments, but these Internet-exchanged bullion shares are more costly than actual bullion, and generally aren’t considered to be wise long term investments.
Gold futures are one of the riskier types of derivative gold investments, as they require the buyer to purchase his or her bullion at a pre-designated date, based the buyer’s calculation that the gold spot price will yield him or her a profit by that time.
Pool accounts are where groups of investors “pool” their money into ETF, or other types of derivative gold ventures, and share the profit or loss of the investment, with no pool participant ever holding the actual metal.
Gold leverage programs involve borrowing a sumof funding based on a designated quantity of gold, whose price is frozen on the day of the transaction. The borrower is expected to repay the debt within a designated time frame (known as a margin call), regardless as to whether the gold spot price has increased or fallen within said time frame.
Investors who would rather own physical metal can avoid paying felonious retail prices for their gold bars and coins by contacting one of our friendly specialists, who offer institutional discounts on bullion, as well as rare gold coin to household investors like you.
Zachary A. Pew