invest in gold


How can I invest in gold outside of the U.S. or Europe?

January 4, 2013, 12:00 PM Przemysław Radomski , CFA

As a student residing outside the US or Europe, how can I invest in precious metals?

Possibilities to invest in precious metals outside the US or Europe differ from country to country. But not only that. As your precious metals portfolio is likely to consist of different investment vehicles suited for long-term investments and short-term trading, you will most likely need to get access to more than just one service to have a well-structured portfolio. In our essay on gold and silver portfolio we suggest that you divide your portfolio into three parts: insurance (physical gold and silver, held almost at all times), long-term investments (also physical gold and silver, rarely sold off or hedged), and short-term speculative capital (only capital you can afford to lose, usually paper gold or paper silver).

For insurance and investment, gold bars or gold coins are the way to go. The same goes for silver bars and silver coins (the latter particularly if you have only limited capital at your disposal). We present a list of sites where you can order bullion bars or coins in our How to Buy: Gold bars and How to Buy: Bullion Coins sections. It is important to consider whether a particular site offers physical delivery to your location and what is the cost of such delivery. Various kinds of import duties can add to costs so it is always important to check applicable regulations on the import of gold and silver in the place where you currently reside. Alternatively, you can consider obtaining your physical gold and silver from local precious metal dealers. In that case, you should always use certified and respected dealers simply to avoid winding up with fake gold or silver. Once again, we would need to know which country you currently live in to provide more suggestions on obtaining physical metals.

As far as the trading part of your portfolio is concerned, you may use ETFs or ETNsto take advantage of short-term swings in gold and silver prices. Leveraged instruments like gold options or gold futures are only advisable for experienced investors. You can get access to ETFs or ETNs through a brokerage account. Quite obviously, you need to find a broker that offers access to gold and silver ETFs and ETNs. Another important factor is that different brokerage accounts have different fees.

For diversification purposes you might also want to include mining stocks in your portfolio. This can be done through a brokerage account as well. The same caveats apply as with ETFs and ETNs.

To sum up, you will probably need at least two services to properly structure your portfolio: (1) a physical bullion provider and (2) a brokerage account with access to gold and silver ETFs, ETNs and mining stocks. To give more suggestions we would need to know which country you reside in.

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