• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Daniels Trading

Independent. Objective. Reliable.

Top Navigation

  • Open a Futures Account
  • Sign Up
  • Log in
  • 1.800.800.3840

Primary Navigation Menu

  • About
    • Who We Are
    • Services
    • Careers
    • Risk Disclosure
    • COVID-19
  • Trade
    • Broker-Assisted
    • Self-Directed / Online
    • Request Pricing
  • Hedge
    • DanielsAg Mobile App
    • Ag Marketing Plan
    • WASDE Analysis
    • Grain Resources
    • Livestock / Dairy Resources
    • Hedging Videos
    • Request Pricing
  • Invest
    • Automated Strategies
    • Managed Futures
    • Request Pricing
  • Advisories
    • GENERAL / FUNDAMENTAL
      • DT Newsletter
      • Insider Market Advisory
      • Turner’s Take Newsletter & Podcast
    • TECHNICAL ANALYSIS
      • The Cullen Outlook
      • Data Feed Trade
      • Jarboe Trading Journal
      • Trade Spotlight
    • AG MARKETING
      • Cattleman’s Advisory
      • The Swine Times
      • Technical Ag Knowledge
      • This Week in Grain
      • Turner’s Take Ag Marketing
    • THIRD-PARTY RESOURCES
      • CFRN
      • Moore Research Center, Inc. (MRCI)
      • OptionWorks®
      • TASMarketProfile.com
  • Education
    • CME Group Resource Center
    • Small Exchange Resources
    • Guides
    • Frequently Asked Questions
    • Order Entry Handbook
    • Webinars
  • Blog
    • Futures 101
    • Ag Marketing
    • Tips & Strategies
    • Trading Advisories
  • Resources
    • Trading Software
    • Quotes and Charts
    • Futures Calendars
    • Contract Specifications
    • Margin Requirements
    • Futures Calculator
  • Accounts
    • GAIN Capital Futures
    • StoneX
  • Contact
Home / Futures Blog / 4 Ways to Invest in Gold

4 Ways to Invest in Gold

April 26, 2011 by Drew Rathgeber

Is this the Most Historic Gold Bull Market Ever?

I’m sure many of you are learning more and more about gold these days due to inflation fears, economic fundamentals and geopolitical events.  In my opinion, each of these factors is making its case for gold.  In fact, I believe we haven’t seen a bull market to this degree since the late 1970’s – early 80’s.  Therefore, I thought this would be a great opportunity to write an article on the many basic ways an individual investor can participate in the current gold bull market.

Physical Gold / Gold Spot Market

Perhaps the most popular way to invest in gold is to purchase physical gold.  Pros call this the “spot market.”  Spot means cash price.  This is the price at which an investor can buy gold today in the form of physical coins or bars, which can then be delivered to the investor’s house or banking institution.  You have probably seen many new companies selling gold and silver.  I used to work for one of these physical metals firms, and I must advise a word of caution when dealing with the spot market.  Some unscrupulous firms use “bait and switch” tactics, so one must be very careful and perform due diligence. I recommend using the Better Business Bureau (B.B.B.) to check the reputation of a company prior to making a purchase.  I also recommend utilizing basic coins like Golden Eagles, Vienna Philharmonics, or Maple Leafs for delivery.  Moreover, I advise to not get diverted into rare coins or other products, as the selling firm will likely add a much higher premium to these products.  Finally, be very careful with bank storage programs.  From my understanding, some banks are being very difficult when it comes time to deliver!

Precious Metal ETFs

Another way to invest in gold is using gold ETFs.  ETF stands for Exchange Traded Fund.  There are many new ETFs out there, but one should seek to understand the tax implications and costs with gold ETFs prior to investing.  Also remember these forms of investments are not backed 100% by the gold they display, so if you want delivery, this is not the correct vehicle for you.  ETFs are simply a financial vehicle, not the physical product.  Here is a short list of precious metal ETFs: GLD, SLV, GDX, DBB, IAU, GLTR.

Mining Stocks

A gold investing vehicle that may take the least amount of capital would be buying Junior Mining stock shares.  These are more effectively exploratory companies or small time producers.  I do know there are different tax implications with equities versus gold futures so one must consider this as well and consult a C.P.A.

Gold Futures

In my opinion, one of the best ways to invest in gold is through futures contracts.  Futures can be perceived as much more complicated, but my personal belief is that there are many advantages along with the potential disadvantages.  Gold futures contacts are traded in three sizes:

Contract Specifications:

Contract Symbol Size
Gold Futures (Full Contract) GC 100 troy ounces
COMEX miNY Gold Futures QO 50 troy ounces
E-micro Gold Futures MGC 10 troy ounces

The following example uses the Full (100oz) gold futures contract:

If the price of gold is $1,300.00 per ounce and you’re holding a full size contract the total value of that contract is $130,000.00. In terms of margin, you only have to invest $6,751 to control this contract.  An important point to remember is that a $67 dollar move in gold can essentially wipe out your account if you are undercapitalized.  My recommendation for new traders is to not use the minimum margin requirements as a guide to fund your account.  I would personally use double to triple the amount required.  Therefore, you have a lot more room for error and can potentially survive the volatility.  Every $1.00 dollar move in gold futures equals $100 for the full size contract.  Furthermore, I would always recommend gold futures versus other vehicles because of the transparency, available trading software, nightly statements, and regulation by the Commodity Futures Trading Commission (C.F.T.C.) and National Futures Association (N.F.A.).

Before investing in gold, I recommend that you call a Series 3 licensed broker who can listen to your objectives and then direct you to the right investment vehicle.  Whether you want to trade or invest using managed futures, automated strategies, a broker-assisted account or a self-directed account, speaking with a knowledgeable commodity futures broker can help you to gain knowledge and comfort in the decision making process.

Complete Gold Futures Trading Kit

Take your knowledge of the Gold Markets to the next level. Our complete Gold Futures Trading Kit includes four insight guides that will help answer many of your trading questions.

Register Now

Risk Disclosure

THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.

THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.

TRADE RECOMMENDATIONS AND PROFIT/LOSS CALCULATIONS MAY NOT INCLUDE COMMISSIONS AND FEES. PLEASE CONSULT YOUR BROKER FOR DETAILS BASED ON YOUR TRADING ARRANGEMENT AND COMMISSION SETUP.

YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE "RISK DISCLOSURE" WEBPAGE ACCESSED AT WWW.DANIELSTRADING.COM AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.

GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.

Filed Under: Uncategorized

About Drew Rathgeber

Drew began his career at one of the nation’s largest physical spot bullion dealers in 2003. From there he made the transition into commodity futures in 2006. Because he has worked on both sides of the fence, ‘Spot’ and ‘Futures’, he has an astute understanding of how the precious metals markets can work for Retail Traders, Hedgers, and Commercials. He can use this knowledge to help investors and traders alike. Drew also has years of experience in electronic software execution, automated systems, hedging, newsletters, options strategies and outright futures contracts. Through his expertise in these areas, he can guide you and answer all of your questions while teaching you how to manage risk.

Today you can see Drew working in many different capacities in the commodity futures markets. You can even see his weekly IMA Live precious metals commentary every Tuesday and Thursday or sign-up for his weekly newsletter, the “Rath Overlay”, which highlights commodity futures markets and possible future events using his time-tested yet simple trading strategy.

Drew grew up near the popular surf beaches of Southern California. Drew is still an avid surfer and snowboarder. Currently his latest craze is United States Masters Swimming (USMS). He is a nationally ranked swimmer and enjoys competitive open water distance swimming.

Primary Sidebar

Get Blog Updates

Subscribe to our blog and receive a daily email with information on market insights, trading tips & strategies.

Trustpilot

Footer

Site Navigation

  • Frequently Asked Questions
  • About Us
  • Customer Reviews
  • Contact Us
  • Futures Blog
  • Open a Futures Trading Account
  • Media Resources
  • Fund Your Account
  • Legal Notices

Contact Us

Daniels Trading
100 South Wacker Drive, Suite 1225
Chicago, IL 60606
+1.312.706.7600 Local / Int'l
+1.800.800.3840 Toll-Free
+1.312.706.7605 Fax

Connect with Us

Trustpilot

Copyright © 2021 · Daniels Trading. All rights reserved.

Risk Disclosure

THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.

THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.

TRADE RECOMMENDATIONS AND PROFIT/LOSS CALCULATIONS MAY NOT INCLUDE COMMISSIONS AND FEES. PLEASE CONSULT YOUR BROKER FOR DETAILS BASED ON YOUR TRADING ARRANGEMENT AND COMMISSION SETUP.

YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE "RISK DISCLOSURE" WEBPAGE ACCESSED AT WWW.DANIELSTRADING.COM AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.

GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.

  • Risk Disclosure
  • Privacy Policy
  • California Residents Privacy Notice
  • Terms of Use
  • Back to top