The different ways to invest in gold
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Retail investors can buy gold bars and coins from a shop or online, though ETFs have become a major way of investing in the precious metal.
PHOTO: AFP
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BENGALURU - Gold surged above US$4,000 an ounce
Spot gold was up 0.7 per cent at US$4,011.18 per ounce by 0300 GMT. US gold futures for December delivery gained 0.7 per cent to US$4,033.40 per ounce.
Here are the different ways to invest in gold:
Spot market
Large buyers and institutional investors usually buy gold from big banks. Prices in the spot market are determined by real-time supply and demand dynamics.
London is the most influential hub for the spot gold market, largely because of the London Bullion Market Association.
The association sets standards for gold trading and provides a framework for the over-the-counter market, facilitating trades among banks, dealers and institutions.
China, India, the Middle East and the United States are other major gold trading centres.
Futures market
Investors can also get exposure to gold via futures exchanges, where people buy or sell a particular commodity at a fixed price on a particular date in the future.
Comex (Commodity Exchange), part of the New York Mercantile Exchange, is the largest gold futures market in terms of trading volumes.
The Shanghai Futures Exchange, China’s leading commodities exchange, also offers gold futures contracts. The Tokyo Commodity Exchange, popularly known as Tocom, is another big player in the Asian gold market.
Exchange-traded funds
Exchange-traded funds (ETFs) issue securities backed by physical metal and let people gain exposure to gold prices without taking delivery of the metal itself.
ETFs have become a major method of investing in the precious metal.
Inflows into physically backed gold ETFs are US$64 billion (S$82.8 billion) so far in 2025, according to data from the World Gold Council, with a record US$17.3 billion in September alone.
Bars and coins
Retail investors can buy gold from metals traders selling bars and coins in a shop or online. Gold bars and coins are both effective means of investing in physical gold. REUTERS
