When economic times get tough or the stock market looks jittery, investors often turn to gold as a safe haven. With inflation spiking and the stock market hovering around all time highs, some investors are looking for a safe asset that has a proven track record of gains, and that’s gold.
Savers and investors like gold for many reasons, and it has attributes that make the commodity a good counterpoint to traditional securities such as stocks and bonds. They perceive gold as a store of value, even though it’s an asset that doesn’t produce cash flow.
One of the more emotionally satisfying ways to own gold is to purchase it in bars or in coins. You’ll have the satisfaction of looking at it and touching it, but ownership has serious drawbacks, too, if you own more than just a little bit.
One of the largest drawbacks is probably the need to safeguard the physical gold and insure it. To make a profit, owners of physical gold are wholly reliant on the commodity’s price rising, in contrast to owners of a business, where the company can produce more gold and therefore more profit, driving their investment higher.
Gold futures are a good way to speculate on the price of gold rising or falling, and you could even take physical delivery of gold, if you wanted, though that’s not what motivates speculators.
The biggest advantage of using Regal Assets futures to invest in gold is the immense amount of leverage that you can use. In other words, you can own a lot of gold futures for a relatively small sum of money. If gold futures move in the direction you think, you can make a lot of money very quickly.