How to invest in gold as prices surge thanks to US stock market

THE price of gold has reached a three-month high, so you may be questioning whether now is a good time to invest. The price of the precious metal soared to a high of 4,601 US dollars (£3,373) an ounce at its highest point yesterday. Gold prices are at a three month high and could rise further Credit: Getty We explain how you can invest and cash in Credit: Getty Prices have risen due to concern about the US economy and a weakened dollar, causing investors to consider precious metals as a safe investment. Meanwhile, the price of gold could increase tenfold in the coming weeks according to Thomas Kaplan, one of the world’s leading investors in gold and silver. Sign up for the Money newsletter Thank you! “Seeing gold go up another tenfold from here, to me is not just likely, but inevitable,” he told Canadian precious metal analyst Kitco News. Gold previously reached a record high in January, soaring above 5,000 US dollars (£3,662) an ounce for the first time. Here we reveal the easiest way YOU can invest. How can I invest in gold? There are several ways to invest in gold including funds and the stock market Credit: Getty One of the simplest ways to get started is to put your cash in a gold Exchange Traded Commodity (ETC), which tracks the spot price of gold. A popular ETC is the iShares Physical Gold ETC, which puts your money directly into physical gold bullion. The fund has an annual fee of 0.12%. Most read in Money Another option is to buy gold bullion from the Royal Mint or a registered dealer such as BullionVault and Bullion by Post. But to do this you’ll need a chunk of cash upfront, so it’s not the best option if you’d prefer to invest little and often. A Britannia 1g Gold Bullion Minted Bar will set you back around £156. In comparison, if you’d rather invest in the stock market then you need just £1 to get started. Another option is to invest in a ready-made fund which spreads your cash among shares of companies that are involved in mining gold. For example, the Ninety One Global Gold Fund invests at least two-thirds of its portfolio in global gold mining shares and other products. I made £650 after one month by investing in gold KATE Seow, 41, runs her own business Kate Seow Jewellery - and first found out about the soaring price of gold thanks to her business contacts. She says: “I buy gold in sheets or wire form for my work and I kept getting emails from my bullion providers about putting their prices up. Investing in gold felt like a good way to offset my rising business costs.” Kate, who lives in Yarm, opened a stocks and shares Isa and, using money from inheritance, invested the maximum £20,000 that you are able to put into these accounts each tax year. She put £5,000 into the iShares Physical Gold ETC in August. Within one month it had gone up 13% and she had made a £650 profit. She decided to sell her holding. “I started reading about how the price could drop and I was worried about losing a lot of money,” says Kate. “In hindsight, it was probably a rookie error but I needed to get used to that volatility.” Kate reinvested £3,000 in the fund at the start of November after the gold price had dipped and this time she plans to stay invested for the long-term. When the new tax year begins in April, she plans to set up a direct debit to invest a regular amount each month so she can continue to grow her money. “They say you should invest in things you understand and because I work with gold, I feel like I really understand it. Investing in it felt like a no-brainer,” says Kate. Another option is the BlackRock Gold & General Fund which targets companies in gold mining and precious metals. But this can be a risky move as these funds are considered to be volatile, as if the gold price falls then so does the profit these companies can make. What are the risks to watch out for? There are risks to watch out for before you race to get started Credit: Getty When investing there’s always the risk that you could lose money as the value of your investment can fall as well as rise. Past performance is not an indication of future returns, so there’s no guarantee that an investment that has previously performed well will continue to do so. There’s no way to know if prices will continue to climb higher this year. If you have invested when the price is high and it then plummets you will have made a loss. Meanwhile, it can be tempting to try and time the market, so you buy when prices are low before they rise. But time in the market is better than timing the market. The best strategy is usually to invest little and often, that way your investment has time to ride the rises and falls in the market. Comment now