Best Way to Invest in Gold and Silver for Beginners: 5 Different Paths

Silver, like gold, is closely attached to many forms of currency. Bullion coins are the most tangible example of silver investing. Though silver is still a rare physical commodity, it is generally less valuable than gold.

Despite this, it maintains its value during uncertain times and shows a positive cumulative return. In fact, between 1970 and 2020, the value of an ounce of silver grew from $1 to $18.

Silver investing is a wise choice for beginners who may not be able to afford gold right out of the gate. A precious metals IRA typically includes these options in its inventory due to high demand and accessibility for incoming investors.

Some younger investors begin with silver to build a healthy portfolio in precious metals while they save up for more expensive commodities.

Let’s look closer at some of the avenues for finding the best way to invest in gold and silver.

1. Physical Gold and Silver (Bullion)

A gold bullion weighs anywhere from several grams to several hundred ounces. However, these bullions are typically expensive investments for many beginners. That is because an ounce of this metal sits around $1,900 (2020 estimate).

Not only will you need to pay for the physical commodity itself, but also its transportation and insurance. Bullions take the form of gold bars in many cases and require careful handling.

Their physical nature makes it nearly impossible to purchase a fractional share of gold. That is why many investors look instead to silver bullions.

Silver bullions are lighter and less expensive. Silver coins also make the purchase and storage of these investments more convenient.

Stay vigilant for commemorative gold and silver bullions. Sellers usually mark up the price of these items significantly.

2. ETFs (Exchange-Traded Funds)

Exchange-Traded Funds are accounts that purchase materials like gold and silver on your behalf. Mutual funds like these allow you to enjoy working with gold without the inconveniences of physical ownership.

For investors that want to diversify their portfolio, this solution works. That is because very few accounts invest strictly in gold or silver. They will continue to find other worthwhile commodities that boost their clients’ gains.

You can explore several ETFs on the market, but always complete thorough research before committing. Keep in mind that these accounts will charge a fee for working with gold and silver. Despite this, these expenses are usually more manageable than the insurance and storage of metal.

For some investors, ETFs streamline their trading experiences. Just remember that the value of mutual funds may not always match up with the market price of gold. These accounts trade paper, backed up by debt and contracts for bullions.

This fact may drive some investors away. Still, ETFs may be a practical solution if you want to find the best way to invest in gold and silver.

3. Mining Stocks

Gold mining is a lucrative industry —one that you can share the rewards in by investing. This method splits physical investment with stocks.

You can share the profits of gold mining by investing in the source. However, like traditional stocks, these companies can be highly speculative. Gold miners are subject to laws, regulations, workforce, and credit liquidity.

Capital costs are usually high, and it could take months or even years to receive proven deposits from these companies.

You should also consider the location of many of these mining facilities. Due to historical conflicts and geographic limitations, many of these companies operate in high-risk nations. The transition of ownership, shutdowns, and wars can significantly impact the success of your investment

Because of this, it can be risky to bet solely on mining stocks and bonds.

4. Gold & Silver Futures

You can sign contracts that agree to buy and sell gold at a given date. This method helps you circumvent current market conditions. Investors call these gold and silver futures.

Because of the high price of gold per ounce, investors typically require significant capital to engage in these deals. Investors need to partner with an online broker that trades in these securities. If you have the means to try this contract, you can enjoy options that help you leverage your initial investment.

One advantage of this strategy is that you can quickly buy and sell gold through an online service. The catch is that you must keep a close eye on your holdings and exercise your options before they expire.

Most experts view this strategy as the riskiest. Newer investors should stay clear of this option until they have the capital to trade in this avenue safely.