Gold Prices Plunge: Here Are 5 Ways to Buy It At a Bargain

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Each of these five ways to add gold to your portfolio has pros and cons. But if you see the value of having gold among your investments, they're all worth considering to give you the gold exposure you want.
Nelson Ching/Bloomberg via Getty ImagesA gold bust of Mao Zedong, former leader of China, right, is displayed for sale at a department store specializing in precious metals and stones in Beijing, China.
The bull market in gold since 1999 has made many gold investors rich. But Monday's big plunge in the price of gold -- prices dropped more than $100 in a single day, sending gold below $1,400 per ounce for the first time in two years -- have some experts thinking that the good times for the yellow metal have come to an end.

Fears about the health of the Chinese economy prompted Monday's gold-price collapse, as the emerging-market nation has become an essential driver of commodities prices around the world.

But gold prices had already been performing badly, with a $60-per-ounce drop last week resulting from word that the central bank in Cyprus would likely have to sell off some of its gold reserves in the aftermath of its banking crisis.

Experts disagree about where gold will go next. Analysts from Goldman Sachs and Societe Generale both predicted falling gold prices recently, although they didn't specify that the declines would come as quickly as they did. But others point out that the rapidly rising costs of producing gold could put a floor under its price, setting the stage for a potential bounce in the future.

Even at current levels, gold has still held onto most of its long-term gains, having traded at around $250 per ounce in 1999. But with prices down more than $500 an ounce from its highs during 2011, you can now pick it up at a relative bargain.

To take advantage of this potential value opportunity, here are five ways you can add gold exposure to your investment portfolio, along with the pros and cons of each.




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11 Comments

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alfredschrader

On paper I'm the wealthiest person on Earth. I don't even own one ounce of gold, nor even a gold watch. The watch I own cost a dollar. It's light and very accurate. The expensive watch I owned hurt my wrist- it was made of heavy metals, so I donated it to charity. Owning a watch is for time slaves anyhow. I can't tell anyone what to invest in, only where I had success. The most valuable investment book I own is the Holy Bible, not something by Fortune Magazine, etc.
On paper Steve Jobs was very wealthy, but he is dead - may he rest in peace. We were both born the same year.
Wisdom from God is the best investment you can make.

April 17 2013 at 6:02 PM Report abuse -1 rate up rate down Reply
kupiec8

Check your facts. I don't believe any of you ever even owned gold. It was never 1200 an ounce in the the 70's . Never went to the 1000 level until the late 2000's. Talk Talk Talk

April 16 2013 at 7:05 PM Report abuse +2 rate up rate down Reply
1 reply to kupiec8's comment
sadiemae1214

Price of gold in 1970 was $36. an ounce. Late 2000's? You have some kind of time machine or something?

April 16 2013 at 9:25 PM Report abuse -1 rate up rate down Reply
pfjw

Gold prices are based on fear, not wisdom. It has no practical purpose whatsoever other than in a few (fewer each day) medical, electrical, military and computing applications, and perhaps for jewelry (which is not practical). One cannot eat it, and if there is nothing to trade it for, it cannot be made into anything useful.

So, the price will reflect the proximity of the end of the world - and not a whole bunch more than that. And then consider - should the world actually end or nearly so, a fresh apple, a quart of clean water, even a fresh Tastykake Pie will be worth far more than its weight in gold.

April 16 2013 at 11:13 AM Report abuse rate up rate down Reply
teegerard

LIKE THE HOUSING MARKET PRICING GOING BACK TO A NORMAL RATE. A $275.00 UNDER ARNOLD (GOV) WENT UP TO $600,000-$700.000, NOW THAT SAME HSE GOES FOR $300,000 OR LESS. SAME WITH GOLD, IT'S GOING TO GO BACK TO $375-$450 oz.. Buffet warned this going to happen.

April 16 2013 at 11:10 AM Report abuse rate up rate down Reply
Bill

Yeah.....go ahead and buy while the price is falling...real good investment advice...

April 16 2013 at 8:52 AM Report abuse +1 rate up rate down Reply
kluj1

lol...nobody ever says sell it....like at 1800...1900...nope these people said buy more its going to 5000....now they say buy it lower....buy buy buy....uh huh....sure sure....you will get a bounce....but thats about it....then lower...so buying means you are chancing it against the big trend....how bout saying, let it fnd a botrtom and bounce and sell the bounce short and placwe a stop at recent resistance which was support when it was up there !! many layers of resistance above now. gold 5000 reminds me of dow 30000 calls.....and then we went to 6000.

April 16 2013 at 8:27 AM Report abuse rate up rate down Reply
Amber

We have not bought gold for 4years so this did not affect our original investment however it does affect our overall net worth. We have been into silver the last few years, hoping that does not take a turn for the worse. We are in it for the long haul so we believe it will rebound well. Lets hope!

April 16 2013 at 12:20 AM Report abuse -1 rate up rate down Reply
ronstriathlon

The way to buy gold at a bargain is to go back in time 15 years. A lot of people that bought late and are slow to sell are going to get hurt financially.

All those ads pushing gold, gold, gold, buy buy buy sure pumped up the price. Who were those guys selling all that gold anyway and why didn't they hold on to it? hmmm

April 15 2013 at 11:27 PM Report abuse +1 rate up rate down Reply
amani4000

Sell, sell sell !! If you bought in the last year you are going to lose your shirt. Here comes the crash so many have warned us about. Best keep your cash under the mattress, it is much safer there.

April 15 2013 at 7:32 PM Report abuse +2 rate up rate down Reply
joethightwad

Another option is to buy shares in closed end bullion funds such as the Central Fund of Canada (CEF). Like an ETF, it assumes the cost of storage and insurance; is priced at or near the net asset value of its holdings; is highly liquid and easily bought or sold; and profits (or losses) are treated the same as stock trades, not as collectables subject to the 28% rate.

April 15 2013 at 3:43 PM Report abuse rate up rate down Reply