The problem is that you can’t invest in physical gold through Fidelity. If you’re looking for ways to invest in gold but don’t want to buy paper gold or Fidelity products, read on. The aim of such ETFs is to achieve the price development of gold minus the ETF’s annual expense ratio. This makes it a good choice for investors who want to buy gold but don’t want the security of buying physical precious metals.
Fidelity is one of the largest financial services companies in the world and offers some gold options that aren’t available elsewhere. This is in contrast to owners of a company (such as a gold mining company), where the company can produce more gold and therefore more profit, which drives up investments in that company. The biggest benefit of using futures to invest in gold is the immense amount of leverage you can use. Since gold doesn’t generate cash flow, investors must also rely on someone else paying more for the metal than they themselves in order to make a profit with gold.
When economic times get tough or financial events like the collapse of Silicon Valley Bank upset the markets, investors often turn to gold as a safe haven. That’s one reason why legendary investors like Warren Buffett warn against investing in gold and favor buying cash flow companies instead. Larger funds in this sector include the VanEck Gold Miners ETF (GDX), the VanEck Junior Gold Miners ETF (GDXJ) and the iShares MSCI Global Gold Miners ETF (RING). If gold moves against you, you will be forced to raise significant sums of money (known as margin) to maintain the contract, or the broker will close the position and you will incur a loss.
These funds can give you exposure to the metals market without having to buy and store physical gold. Most physical metal dealers require investors to pay a premium over the spot price of gold to buy coins or bars. The three largest ETFs include the SPDR Gold Shares (GLD), the iShares Gold Trust (IAU) and the abrdn Physical Gold Shares ETF (SGOL). It’s bigger than many of its competitors and offers multiple gold options that aren’t available elsewhere.
You may want to trade in bars rather than coins, as you’re likely to pay a price for the collector value of a coin and not just its gold content.
