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Buying COMEX Gold or Physical Gold

There is a wide variety of ways to invest in gold; gold coins and bars, gold futures, and collector’s coins all provide unique features and offer investors ways to profit from this precious metal. There are differences in purchasing futures contracts, sometimes known as COMEX gold contracts, and physical gold. This difference is important to understand before deciding what to purchase.

Gold futures represent a contract between buyer and seller to purchase a quantity of gold on a certain date at a predefined price. Purchases like these are made through commodities exchanges, known as COMEX. The most famous COMEX is the New York Commodity Exchange; here investors can purchase futures contracts based on prices that they anticipate at a later date. This can be a complex way to invest in gold and has a high risk based on speculation. and the fact that the COMEX gold contracts allow investors to leverage large amounts of gold, purchasing greater amounts than they actually purchase.

Purchasing physical gold is much more direct. An investor either buys gold bullion or collector’s coins and saves them or sells them in order to hopefully receive a profit. Deciding between bullion and rare coin purchases is generally influenced by investment funds and strategy. Bullion sells for near the gold spot prices, with dealer and delivery fees commonly added. Rare coins normally sell above the price of gold and their worth is calculated during certification by determining their quality, rarity and value in the open market.

For most investors, physical gold is a better investment option than COMES gold contracts, due to the high risks involved with gold futures and the security that comes from holding physical gold. In either case, it is wise for a person to discuss investment strategy with a company such as gold-investment.org. Part of the Certified Gold Exchange, the company has specialists that are knowledgeable and can help an investor decide the best plan for adding gold to his or her portfolio. 

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Stewart Lawson

Senior Staff Writer - Gold-Investment.info