View source for Chemistry:Gold as an investment

{{Short description|Investment in gold}}
{{pp-semi-indef|small=yes}}
{{Overly detailed|date=April 2022}}
{{Infobox currency
| currency_name     = Gold
| iso_code          = XAU
| symbol            = XAU
| using_countries   = Investors
}}

[[File:2006reserves (forex and gold).PNG|thumb|right|Reserves of [[Finance:Special drawing rights|SDR]], forex and gold in 2006]]
[[File:Gold bullion 2.jpg|thumb|A Good Delivery bar, the standard for trade in the major international gold markets.]]
[[File:InvestmentGold.jpg|thumb|Size of a 100 gram gold bar - packaged inside an assay for proof of authenticity - compared to a playing card.]]
Of all the [[Chemistry:Precious metal|precious metal]]s, [[Chemistry:Gold|gold]] is the most popular as an [[Finance:Investment|investment]]. Investors generally buy gold as a way of diversifying risk, especially through the use of [[Finance:Futures contract|futures contract]]s and [[Finance:Derivative|derivative]]s. The gold market is subject to [[Finance:Speculation|speculation]] and [[Finance:Volatility|volatility]] as are other markets.  Compared to other precious metals used for investment, gold has been the most effective safe haven across a number of countries.<ref>{{cite journal |last1=Low |first1=R.K.Y. |last2=Yao |first2=Y. |last3=Faff |first3=R. |title=Diamonds vs. precious metals: What shines brightest in your investment portfolio?|journal=International Review of Financial Analysis |date=2015|volume=43|pages=1–14 |doi=10.1016/j.irfa.2015.11.002 |url=https://espace.library.uq.edu.au/view/UQ:374946/UQ374946_OA.pdf}}</ref>

==Gold price==
[[File:Gold-nominal-constant-usd.svg|thumb|Gold prices (US$ per troy ounce), in nominal US$ and inflation adjusted US$ from 1914 onward.]]
[[File:Price of gold.webp|thumb|Price of gold 1915–2022]]
[[File:Gold price in USD.png|thumb|Gold price history in 1960–2014]]
[[File:Gold Spot Price per Gram from Jan 1971 to Jan 2012.svg|thumb|Gold price per gram between Jan 1971 and Jan 2012. The graph shows nominal price in US dollars, the price in 1971 and 2011 US dollars. The notable peak in 1980 followed the [[Place:Soviet Union|Soviet]] military involvement in Afghanistan, after a decade of inflation, oil shocks, and American military failures.]]

Gold has been used throughout history as [[Finance:Money|money]] and has been a relative standard for currency equivalents specific to economic regions or countries, until recent times. Many European countries implemented [[Chemistry:Gold standard|gold standard]]s in the latter part of the 19th century until these were temporarily suspended in the financial crises involving [[Social:World War I|World War I]].<ref>{{cite web|url=http://www.history.com/topics/world-war-i |title=World War I - Battles, Facts, Videos & Pictures |publisher=History.com}}</ref> After [[Social:World War II|World War II]], the [[Finance:Bretton Woods system|Bretton Woods system]] pegged the United States dollar to gold at a rate of US$35 per troy ounce. The system existed until the 1971 [[Finance:Nixon shock|Nixon shock]], when the US unilaterally suspended the direct convertibility of the United States dollar to gold and made the transition to a fiat currency system. The last major currency to be divorced from gold was the Swiss franc in 2000.<ref>{{Cite news|url=https://www.nytimes.com/1999/04/19/world/swiss-narrowly-vote-to-drop-gold-standard.html|title=Swiss Narrowly Vote to Drop Gold Standard|agency=Associated Press|date=April 19, 1999|work=The New York Times|access-date=March 19, 2018|language=en-US|issn=0362-4331}}</ref>

Since 1919 the most common benchmark for the price of gold has been the London gold fixing, a twice-daily telephone meeting of representatives from five [[Chemistry:Bullion|bullion]]-trading firms of the [[Chemistry:London bullion market|London bullion market]]. Furthermore, gold is traded continuously throughout the world based on the intra-day spot price, derived from [[Finance:Over-the-counter|over-the-counter]] gold-trading markets around the world ([[ISO 4217|code]] "XAU"). The following table sets out the gold price versus various assets and key statistics at five-year intervals.<ref>{{cite web |url=http://www.dailygoldpro.com/ |title=Gold Price USA |publisher=Daily Gold Pro |date=August 3, 2013 |access-date=February 12, 2014 |url-status=dead |archive-url=https://web.archive.org/web/20140111180034/http://www.dailygoldpro.com/ |archive-date=January 11, 2014 }}</ref>

{| class="wikitable" style="text-align:right; table-layout: fixed;"
|-
!rowspan=2|Year
!rowspan=2|Gold{{nobold| {{wipe|United States dollar}}/<br />ozt<ref>LBMA [http://www.lbma.org.uk/stats/goldfixg Gold Fixings] {{Webarchive|url=https://web.archive.org/web/20090301052649/http://www.lbma.org.uk/stats/goldfixg |date=2009-03-01 }} yearly close, rounded to nearest $</ref>}}
!colspan=2|DJIA
!colspan=2|[[Finance:Gross world product|World GDP]]
!colspan=2|US Debt
!colspan=2|[[Finance:List of countries by external debt|Debt per capita]]
!rowspan=2|Trade-weighted<br />US dollar<br />index{{nobold|<ref>[http://www.federalreserve.gov/releases/h10/Summary/indexb_m.txt Nominal broad dollar index] US Federal Reserve. Gives the comparative international value of the USD against a basket of the currencies of the US's major trading partners. Base date for index (100.0000) was Jan 1997. Index value shown as at June of the relevant year, rounded to nearest 1/10 of a point</ref>}}
|-
!{{nobold| USD<ref>{{cite web|url=https://finance.yahoo.com/q/hp?s=^DJI+Historical+Prices |title=^DJI Historical Prices &#124; Dow Jones Industrial Average Stock - Yahoo! Finance |publisher=Finance.yahoo.com |access-date=February 12, 2014}}</ref>}}
!{{nobold| XAU}}
!{{nobold| XAU (billions)}}
!{{nobold| USD (billions)<ref>[http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm Historical Debt Outstanding&nbsp;– Annual 1950&nbsp;– 1999], [http://www.treasurydirect.gov/NP/BPDLogin?application=np The Debt to the Penny. Total Public Debt Outstanding (including Intragovernmental Holdings)] {{Webarchive|url=https://web.archive.org/web/20110418203433/http://www.treasurydirect.gov/NP/BPDLogin?application=np |date=2011-04-18 }}, rounded to nearest billion $</ref>}}
!{{nobold| XAU (billions)}}
!{{nobold|USD<ref>{{Cite web|url=https://www.usgovernmentspending.com/spending_chart_1970_2010USm_15s4lo011scn_H0f_Public_Debt_and_Population|title=Public Debt and Population United States 1970-2010 - Federal State Local Data|website=www.usgovernmentspending.com|access-date=Sep 26, 2020}}</ref>}}
!{{nobold| XAU}}
|-
| 1970 ||    37 ||    839 || 22.7 ||  3.3 ||  89.2 ||    370 || 10.0 ||  1,874 || 50.6 ||
|-
| 1975 ||   140 ||    852 ||  6.1 ||  6.4 ||  45.7 ||    533 ||  3.8 ||  2,525 || 18.0 || 33.0
|-
| 1980 ||   590 ||    964 ||  1.6 || 11.8 ||  20.0 ||    908 ||  1.5 ||  4,013 ||  6.8 || 35.7
|-
| 1985 ||   327 ||  1,547 ||  4.7 || 13.0 ||  39.8 ||  1,823 ||  5.6 ||  7,657 || 23.4 || 68.2
|-
| 1990 ||   391 ||  2,634 ||  6.7 || 22.2 ||  56.8 ||  3,233 ||  8.3 || 12,892 || 33.0 || 73.2
|-
| 1995 ||   387 ||  5,117 || 13.2 || 29.8 ||  77.0 ||  4,974 || 12.9 || 18,599 || 48.1 || 90.3
|-
| 2000 ||   273 || 10,787 || 39.5 || 31.9 || 116.8 ||  5,662 || 20.7 || 20,001 || 73.3 || 118.6
|-
| 2005 ||   513 || 10,718 || 20.9 || 45.1 ||  87.9 ||  8,170 || 15.9 || 26,752 || 52.1 || 111.6
|-
| 2010 || 1,410 || 11,578 ||  8.2 || 63.2 ||  44.8 || 14,025 ||  9.9 || 43,792 || 31.1 || 99.9
|-
! colspan=11 | 1970 to 2010 net change, in %
|-
|      || 3,792 ||  1,280 || ... || ... || ... || 3,691 || ... || 2,237 || ... || ... 
|-
! colspan=11 | 1975 (post US off gold standard) to 2010 net change, in %
|-
|      ||   929 ||  1,259 || ... || ... || ... || 2,531 || ... || 1,634 || ... || ... 
|}

===Influencing factors===
[[File:Gold as an investment.webp|thumb|center|300px|
{{legend-line|#F4CF11 solid 3px|Price of [[Chemistry:Gold|gold]]}}
{{legend-line|#00A2FF solid 3px|10 year Treasury [[Finance:Real interest rate|real yield]] ([[Finance:Inverted yield curve|inverted]])}}
]]
[[File:Price of gold vs price of copper.webp|thumb|center|300px|Price of gold vs price of copper
{{legend|#FFD700|Price of gold (left)}}
{{legend|#FF871E|Price of [[Chemistry:Copper|copper]] (right)}}
]]
Like most commodities, the price of gold is driven by [[Finance:Supply and demand|supply and demand]], including speculative demand. However, unlike most other commodities, saving and disposal play larger roles in affecting its price than its [[Finance:Consumption (economics)|consumption]]. Most of the gold ever mined still exists in accessible form, such as bullion and mass-produced jewelry, with little value over its fine weight—so it is nearly as liquid as bullion, and can come back onto the gold market.<ref name="howstuffworks">{{cite web|url=http://money.howstuffworks.com/question213.htm |title=Howstuffworks "All the gold in the world" |date=April 2000 |publisher=Money.howstuffworks.com |access-date=March 16, 2010}}</ref><ref name="indestructable">{{cite web|url=http://www.gold.org/value/markets/supply_demand/recycled.html |title=World Gold Council > value > market intelligence > supply & demand > recycled gold |publisher=Gold.org |access-date=March 16, 2010}}</ref> At the end of 2006, it was estimated that all the gold ever mined totalled {{convert|158000|t}}.<ref>{{cite web | url=http://www.invest.gold.org/sites/en/why_gold/demand_and_supply/ | title=World Gold Council | access-date=July 4, 2008 | archive-url=https://web.archive.org/web/20080511212013/http://www.invest.gold.org/sites/en/why_gold/demand_and_supply/ | archive-date=May 11, 2008 | url-status=dead }}</ref>

Given the huge quantity of gold stored above ground compared to the annual production, the price of gold is mainly affected by changes in sentiment, which affects market supply and demand equally, rather than on changes in annual production.<ref>{{Citation |url=http://webarchiveproject.org/520811/ |work=World Gold Council |title=Frequently Asked Questions |url-status=dead |archive-url=https://web.archive.org/web/20160420230114/http://webarchiveproject.org/520811/ |archive-date=April 20, 2016 }}</ref> According to the [[Organization:World Gold Council|World Gold Council]], annual mine production of gold over the last few years has been close to 2,500 tonnes.<ref name=autogenerated1>{{cite web |url=http://www.gold.org/deliver.php?file=/value/stats/statistics/pdf/Supply_Demand.pdf |title=World Gold Council |publisher=Gold.org |access-date=March 16, 2010 |url-status=dead |archive-url=https://web.archive.org/web/20100916033528/http://www.gold.org/deliver.php?file=%2Fvalue%2Fstats%2Fstatistics%2Fpdf%2FSupply_Demand.pdf |archive-date=September 16, 2010 }}</ref> About 2,000 tonnes goes into jewelry, industrial and dental production, and around 500 tonnes goes to retail investors and exchange-traded gold funds.<ref name=autogenerated1 />

====Central banks====
Central banks and the [[Organization:International Monetary Fund|International Monetary Fund]] play an important role in the gold price. At the end of 2004, central banks and official organizations held 19% of all above-ground gold as official gold reserves.<ref>{{cite web|url=http://www.gold.org/value/markets/supply_demand/central_banks.html |title=Official gold reserves |publisher=Gold.org |access-date=March 16, 2010}}</ref> The ten-year [[Finance:Washington Agreement on Gold|Washington Agreement on Gold]] (WAG), which dates from September 1999, limited gold sales by its members (Europe, United States, Japan, Australia, the [[Organization:Bank for International Settlements|Bank for International Settlements]] and the International Monetary Fund) to less than 400 tonnes a year.<ref>{{cite web|url=http://www.gold.org/pr_archive/html/Wr991006.htm |title=400 tonnes/year |publisher=Gold.org |date=September 26, 1999 |access-date=March 16, 2010}}</ref> In 2009, this agreement was extended for five years, with a limit of 500 tonnes.<ref>{{citation | publisher=Financial Times | url=http://www.ft.com/cms/s/0/9acfe00e-83b1-11de-a24e-00144feabdc0.html |archive-url=https://ghostarchive.org/archive/8Qz1b |archive-date=2022-12-24 |url-access=subscription |url-status=live | title=Central banks revive gold bulls | date= August 8, 2009 | access-date=June 12, 2010}}</ref> European central banks, such as the Bank of England and the Swiss National Bank, have been key sellers of gold over this period.<ref>{{cite web|url=http://www.bankofengland.co.uk/publications/news/1999/036.htm|archive-url=https://web.archive.org/web/20050527073838/http://www.bankofengland.co.uk/publications/news/1999/036.htm|archive-date=May 27, 2005 |title=UK Treasury & Central Bank Gold Sales |publisher=Bankofengland.co.uk |access-date=March 16, 2010}}</ref> In 2014, the agreement was extended another five years at 400 tonnes per year. In 2019 the agreement was [[Finance:Washington Agreement on Gold#2019 lapsing of the agreement|not extended again]].{{Citation needed|date=August 2021}}

Although central banks do not generally announce gold purchases in advance, some, such as Russia, have expressed interest in growing their gold reserves again as of late 2005.{{cn|date=March 2023}} In early 2006, {{wipe|China}}, which only holds 1.3% of its reserves in gold,<ref>{{cite web |url=http://gold.seekingalpha.com/article/16299 |title=A Gold Play on the Dollar's Demise [SPDR Gold Trust (ETF), iShares Gold Trust(ETF), CurrencyShares Euro Trust&#93; - Seeking Alpha |publisher=Gold.seekingalpha.com |date=September 5, 2006 |access-date=February 12, 2014 |url-status=dead |archive-url=https://web.archive.org/web/20070706155619/http://gold.seekingalpha.com/article/16299 |archive-date=July 6, 2007 }}</ref> announced that it was looking for ways to improve the returns on its official reserves. Some bulls hope that this signals that China might reposition more of its holdings into gold, in line with other central banks. Chinese investors began pursuing investment in gold as an alternative to investment in the Euro after the beginning of the Eurozone crisis in 2011. China has since become the world's top gold consumer {{as of|2013|lc=y}}.<ref>{{cite web|url=http://www.ft.com/cms/s/0/5a48854c-8427-11e3-9903-00144feab7de.html#axzz2rEgLxwyU |archive-url=https://ghostarchive.org/archive/EfnnQ |archive-date=2022-12-24 |url-access=subscription |url-status=live |title=China becomes top gold consumer in 2013 |publisher=Ft.com |access-date=January 23, 2013}}</ref>

The price of gold can be influenced by a number of macroeconomic variables.<ref name="eprints.hud.ac.uk">{{Cite web |url=http://eprints.hud.ac.uk/23829/3/NtimAccepted_version_March_2015.pdf |title=Archived copy |access-date=2015-05-27 |archive-date=2015-05-27 |archive-url=https://web.archive.org/web/20150527122338/http://eprints.hud.ac.uk/23829/3/NtimAccepted_version_March_2015.pdf |url-status=dead }}</ref> Such variables include the price of oil, the use of [[Finance:Quantitative easing|quantitative easing]], currency exchange rate movements and returns on equity markets.<ref name="eprints.hud.ac.uk"/>

{| class="wikitable"
|-
! Years !! Amount of gold sold by IMF<ref>{{Cite web|url=http://www.imfsite.org/imf-effect-on-gold-prices/imf-gold-sales-history/|title=IMF Gold Sales History|access-date=Sep 26, 2020}}</ref><ref>{{Cite web|url=https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14/42/Gold-in-the-IMF|title=Gold in the IMF|website=IMF|access-date=Sep 26, 2020}}</ref> !! sold to
|-
| 1970–1971 || "as much gold as IMF bought from {{wipe|South Africa}}" ||
|-
| 1976–1980 || 50 million ounces (1555 tons) ||
|-
| 1999–2000 || 14 million ounces (435 tons) ||
|-
| rowspan=5|2009–2010 ||rowspan=4| 13 million ounces (403 tons) ||200 tons to {{wipe|India}}
|-
||10 tons to Sri Lanka
|-
||10 tons to Bangladesh
|-
||2 tons to [[Earth:Mauritius|Mauritius]]
|-
| colspan=2|IMF still have a balance of 2,814.1 metric tons of gold
|}

====Hedge against financial stress====
Gold, like all precious metals, may be used as a [[Finance:Hedge|hedge]] against [[Finance:Inflation|inflation]], [[Finance:Deflation|deflation]] or currency [[Finance:Devaluation|devaluation]], though its efficacy as such has been questioned; historically, it has not proven itself reliable as a hedging instrument.<ref>{{Cite web|url=https://medium.com/hedgehound/hedgehound-fridayfinance-on-hedging-inflation-with-gold-375f3ce09cfe|title=On hedging inflation with gold|last=Valenta|first=Philip|date=June 22, 2018|website=Medium|access-date=November 30, 2018}}</ref> A unique feature of gold is that it has no default risk.<ref>{{Cite web|url=https://www.pimco.com/en-us/insights/viewpoints/gold--the-simple-facts/|title=GOLD - The Simple Facts|access-date=2018-03-19|archive-date=2019-04-03|archive-url=https://web.archive.org/web/20190403114451/https://www.pimco.com/en-us/insights/viewpoints/gold--the-simple-facts|url-status=dead}}</ref> As Joe Foster, portfolio manager of the New York-based Van Eck International Gold Fund, explained in September 2010:

{{blockquote|The currencies of all the major countries are under severe pressure because of massive government deficits. The more money that is pumped into these economies&nbsp;– the printing of money basically&nbsp;– then the less valuable the currencies become.<ref>{{cite web|last=Deener |first=Will |url=http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-deenercol_27bus.ART0.State.Edition1.248c0fa.html |title=Why gold, silver are up while inflation is low &#124; Dallas Morning News |publisher=Dallasnews.com |access-date=2014-02-12}}</ref>}}

{| class="wikitable"
|+ Deutsche Bank's view of the point at which gold prices can be considered close to fair value (on October 10, 2014)<ref>Versus long term averages [http://www.etf.db.com/CHE/DEU/Download/Research-Commodities/55984c89-9f08-44ad-a5de-bac0be822f86/Special-Report.pdf Deutsche Bank Markets Research]</ref>
|-
!
!USD/oz
|-
| In real terms (PPI)|| 725
|-
|In real terms (CPI)|| 770
|-
|Relative to per capita income|| 800
|-
|Relative to the S&P500|| 900
|-
|Versus copper|| 1050
|-
|Versus crude oil|| 1400
|}

====Jewelry and industrial demand====
Jewelry consistently accounts for over two-thirds of annual gold demand. India is the largest consumer in volume terms, accounting for 27% of demand in 2009, followed by China and the USA.<ref>{{cite web|url=http://www.gold.org/investment/why_how_and_where/why_invest/demand_and_supply/ |title=Demand and supply |publisher=World Gold Council |url-status=dead |archive-url=https://web.archive.org/web/20110122124718/http://www.gold.org/investment/why_how_and_where/why_invest/demand_and_supply/ |archive-date=January 22, 2011 }}</ref>

Industrial, dental and medical uses account for around 12% of gold demand. Gold has high thermal and electrical conductivity properties, along with a high resistance to corrosion and bacterial colonization. Jewelry and industrial demand have fluctuated over the past few years due to the steady expansion in emerging markets of middle classes aspiring to Western lifestyles, offset by the financial crisis of 2007–2010.<ref>{{cite web|url=http://www.gold.org/world_of_gold/market_intelligence/gold_demand/gold_demand_trends/ |title=Gold Demand Trends |publisher=World Gold Council |url-status=dead |archive-url=https://web.archive.org/web/20101205182917/http://www.gold.org/world_of_gold/market_intelligence/gold_demand/gold_demand_trends/ |archive-date=December 5, 2010 }}</ref>

====Gold jewelry recycling====
In recent years the recycling of second-hand jewelry has become a multibillion-dollar industry. The term "Cash for Gold" refers to offers of cash for selling old, broken, or mismatched gold jewelry to local and online gold buyers.

====War, invasion and national emergency====
When dollars were fully convertible into gold via the [[Chemistry:Gold standard|gold standard]], both were regarded as money. However, many people preferred to carry around paper banknotes rather than the somewhat heavier and less divisible gold coins. If people feared their bank would fail, a [[Finance:Bank run|bank run]] might result. This happened in the USA during the [[Finance:Great Depression|Great Depression]] of the 1930s, leading President Roosevelt to impose a national emergency and issue [[Finance:Executive Order 6102|Executive Order 6102]] outlawing the "hoarding" of gold by US citizens.  There was only one prosecution under the order, and in that case the order was ruled invalid by federal judge John M. Woolsey, on the technical grounds that the order was signed by the President, not the Secretary of the Treasury as required.<ref>{{cite magazine| url=http://www.time.com/time/magazine/article/0,9171,746366,00.html | archive-url=https://web.archive.org/web/20091115093303/http://www.time.com/time/magazine/article/0,9171,746366,00.html | url-status=dead | archive-date=November 15, 2009 | magazine=Time | title=Sequels, Nov. 27, 1933 | date=November 27, 1933}}</ref>

==Investment vehicles==

===Bars===
[[File:1 oz of Gold.jpg|thumb|right|{{convert|1|ozt|g}} gold bar with certificate]]
The most traditional way of investing in gold is by buying bullion gold bars. In some countries, like {{wipe|Canada}}, Austria, [[Finance:Liechtenstein|Liechtenstein]] and {{wipe|Switzerland}}, these can easily be bought or sold at the major banks. Alternatively, there are bullion dealers that provide the same service. Bars are available in various sizes. For example, in Europe, [[Chemistry:Good Delivery|Good Delivery]] bars are approximately {{convert|400|ozt|kg}}.<ref>{{citation|publisher=LBMA |url=http://www.lbma.org.uk/docs/gdlvarious/GD%20Rules%2020100511.pdf |title=The Good Delivery Rules for Gold and Silver Bars |date=May 2010 |access-date=May 21, 2010 |url-status=dead |archive-url=https://web.archive.org/web/20100705095149/http://www.lbma.org.uk/docs/gdlvarious/GD%20Rules%2020100511.pdf |archive-date=July 5, 2010 }}</ref> {{convert|1|kg|ozt|1}} bars are also popular, although many other weights exist, such as the {{cvt|10|ozt|g}}, {{cvt|1|ozt|g}}, 10&nbsp;g, 100&nbsp;g, 1&nbsp;kg, 1&nbsp;[[Physics:Tael|Tael]] (50&nbsp;g in China), and 1&nbsp;[[Physics:Tola (unit)|Tola]] (11.3&nbsp;g).

Bars generally carry lower price premiums than gold bullion coins. However larger bars carry an increased risk of forgery due to their less stringent parameters for appearance. While bullion coins can be easily weighed and measured against known values to confirm their veracity, most bars cannot, and gold buyers often have bars re-[[Metallurgical assay|assay]]ed. Larger bars also have a greater volume in which to create a partial forgery using a [[Chemistry:Tungsten|tungsten]]-filled cavity, which may not be revealed by an assay. Tungsten is ideal for this purpose because it is much less expensive than gold, but has the same density (19.3 g/cm<sup>3</sup>).

Good delivery bars that are held within the [[Chemistry:London bullion market|London bullion market]] (LBMA) system each have a verifiable chain of custody, beginning with the refiner and assayer, and continuing through storage in LBMA recognized vaults. Bars within the LBMA system can be bought and sold easily. If a bar is removed from the vaults and stored outside of the chain of integrity, for example stored at home or in a private vault, it will have to be re-assayed before it can be returned to the LBMA chain. This process is described under the LBMA's "Good Delivery Rules".<ref>{{cite web |url=http://www.lbma.org.uk/assets/GD_Rules_4.pdf |title=LBMA : The Good Delivery Rules for Gold and Silver Bars |publisher=Lbma.org.uk |access-date=February 12, 2014 |archive-date=September 7, 2014 |archive-url=https://web.archive.org/web/20140907223739/http://www.lbma.org.uk/assets/GD_Rules_4.pdf |url-status=dead }}</ref>

The LBMA "traceable chain of custody" includes refiners as well as vaults. Both have to meet their strict guidelines. Bullion products from these trusted refiners are traded at face value by LBMA members without assay testing. By buying bullion from an LBMA member dealer and storing it in an LBMA recognized vault, customers avoid the need of re-assaying or the inconvenience in time and expense it would cost.<ref>{{cite web|last=Townsend |first=Erik |url=http://www.financialsense.com/contributors/erik-townsend/so-you-think-you-own-gold?device=desktop |title=So You Think You Own Gold? Understanding the nuances of paper vs. physical and allocated vs. unallocated metal &#124; Erik Townsend |publisher=Financial Sense |access-date=February 12, 2014}}</ref> However this is not 100% sure; for example, Venezuela moved its gold because of the political risk for them. And as the past shows, there may be risk even in countries considered democratic and stable; for example [[Finance:Executive Order 6102|in the US in the 1930s gold was seized by the government]] and legal moving was banned.<ref>{{cite news|last=Cancel |first=Daniel |url=https://www.bloomberg.com/news/2011-08-16/venezuela-may-move-reserves-from-u-s-to-allied-countries-says-lawmaker.html |title=Venezuela May Move Reserves From U.S. to 'Allied' Countries, Says Lawmaker |publisher=Bloomberg |date=August 16, 2011 |access-date=February 12, 2014}}</ref>

Efforts to combat gold bar counterfeiting include [[Physics:Kinebar|kinebar]]s which employ a unique holographic technology and are manufactured by the Argor-Heraeus refinery in Switzerland.

===Coins===
Gold coins are a common way of owning gold. Bullion coins are priced according to their fine weight, plus a small premium based on [[Finance:Supply and demand|supply and demand]] (as opposed to numismatic gold coins, which are priced mainly by supply and demand based on rarity and condition).

The sizes of bullion coins range from {{convert|0.1|to|2|ozt|g|lk=in}}, with the {{convert|1|ozt|g}} size being most popular and readily available.{{citation needed|date=March 2018}}

The Krugerrand is the most widely held gold bullion coin, with {{convert|46|e6ozt|t|abbr=off}} in circulation. Other common gold bullion coins include the Australian Gold Nugget (Kangaroo), Austrian Philharmoniker (Philharmonic), Austrian 100 Corona, Canadian Gold Maple Leaf, Chinese Gold Panda, Malaysian Kijang Emas, French Napoleon or Louis d'Or, Mexican Gold 50 Peso, British Sovereign, American Gold Eagle, and American Buffalo.

Coins may be purchased from a variety of dealers both large and small. Fake gold coins are common and are usually made of gold-layered alloys.<ref name=":0">{{Cite news|url=https://www.cbsnews.com/news/chinas-latest-export-boom-fake-gold-coins/|title=China's latest export boom: Fake gold coins|access-date=January 20, 2018|language=en}}</ref>

===Gold rounds===
''Gold rounds'' look like gold coins, but they have no [[Finance:Currency|currency]] value.<ref>{{cite web | url=https://www.jmbullion.com/investing-guide/james/buying-bars-rounds-coins/ | title=Should you Buy Bars, Rounds, or Coins? | date=14 January 2015 }}</ref><ref>{{cite web | url=http://www.gainesvillecoins.com/learn/difference-between-coins-and-rounds | title=What Is the Difference Between Coins and Rounds? | access-date=2017-06-14 | archive-date=2019-04-03 | archive-url=https://web.archive.org/web/20190403164513/https://www.gainesvillecoins.com/learn/difference-between-coins-and-rounds | url-status=dead }}</ref> They range in similar sizes as gold coins, including {{convert|0.05|ozt|g}}, {{convert|1|ozt|g}}, and larger. Unlike gold coins, gold rounds commonly have no additional metals added to them for durability purposes and do not have to be made by a government mint, which allows the gold rounds to have a lower overhead price as compared to gold coins. On the other hand, gold rounds are normally not as collectible as gold coins.

===Exchange-traded products===
Gold exchange-traded products may include exchange-traded funds (ETFs), [[Finance:Exchange-traded note|exchange-traded note]]s (ETNs), and [[Finance:Closed-end fund|closed-end fund]]s (CEFs), which are traded like shares on the major stock exchanges. The first gold ETF, Gold Bullion Securities (ticker symbol "GOLD"), was launched in March 2003 on the Australian Stock Exchange, and originally represented exactly {{convert|0.1|ozt|g}} of gold. {{as of|2010|November|}}, [[Company:SPDR Gold Shares|SPDR Gold Shares]] is the second-largest exchange-traded fund in the world by [[Social:Market capitalization|market capitalization]].<ref>{{cite web|url=http://etfdb.com/compare/market-cap/|title=Largest ETFs: Top 25 ETFs By Market Cap|publisher=ETFdb|access-date=November 3, 2010}}</ref>

Gold exchange-traded products (ETPs) represent an easy way to gain exposure to the gold price, without the inconvenience of storing physical bars. However exchange-traded gold instruments, even those that hold physical gold for the benefit of the investor, carry risks beyond those inherent in the precious metal itself. For example, the most popular gold ETP (GLD) has been widely criticized, and even compared with [[Finance:Mortgage-backed security|mortgage-backed securities]], due to features of its complex structure.<ref>{{citation | work = The Golden Sextant | title = Musings on the Realms of GLD | author = Bob Landis | year = 2007 | url = http://www.goldensextant.com/GLD.html }}</ref><ref>{{citation | work = Rapid Trends | title = Owning GLD Can Be Hazardous to Your Wealth | author = Dave Kranzler | date = February 12, 2009 | url = http://www.rapidtrends.com/2009/02/13/owning-gld-can-be-hazardous-to-your-wealth/ | access-date = July 18, 2010 | archive-url = https://web.archive.org/web/20100226142021/http://www.rapidtrends.com/2009/02/13/owning-gld-can-be-hazardous-to-your-wealth/ | archive-date = February 26, 2010 | url-status = dead }}</ref><ref>{{citation | work = [[Finance:Seeking Alpha|Seeking Alpha]] | author = RunToGold.com | title = Is the GLD ETF Really Worth Its Metal? | date = February 19, 2009 | url = http://seekingalpha.com/article/121456-is-the-gld-etf-really-worth-its-metal }}</ref><ref>{{citation | work = Bullion Bulls Canada | author = Jeff Nielson | title = The Seven Sins of GLD | date = July 6, 2010 | url = http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=13341:the-seven-sins-of-gld&catid=48:gold-commentary&Itemid=131 | access-date = July 18, 2010 | archive-url = https://web.archive.org/web/20100710121708/http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=13341:the-seven-sins-of-gld&catid=48:gold-commentary&Itemid=131 | archive-date = July 10, 2010 | url-status = dead }}</ref>

Typically a small commission is charged for trading in gold ETPs and a small annual storage fee is charged. The annual expenses of the fund such as storage, insurance, and management fees are charged by selling a small amount of gold represented by each certificate, so the amount of gold in each certificate will gradually decline over time.

Exchange-traded funds, or ETFs, are investment companies that are legally classified as open-end companies or [[Finance:Unit investment trust|unit investment trust]]s (UITs), but that differ from traditional open-end companies and UITs.<ref name="Exchange-Traded Funds ETFs">{{cite web|url=https://www.sec.gov/answers/etf.htm| title=Exchange-Traded Funds (ETFs)|access-date=May 5, 2010}}</ref> The main differences are that ETFs do not sell directly to investors and they issue their shares in what are called "Creation Units" (large blocks such as blocks of 50,000 shares). Also, the Creation Units may not be purchased with cash but a basket of securities that mirrors the ETF's portfolio. Usually, the Creation Units are split up and re-sold on a secondary market.

ETF shares can be sold in two ways: The investors can sell the individual shares to other investors, or they can sell the Creation Units back to the ETF. In addition, ETFs generally redeem Creation Units by giving investors the securities that comprise the portfolio instead of cash. Because of the limited redeemability of ETF shares, ETFs are not considered to be and may not call themselves mutual funds.<ref name="Exchange-Traded Funds ETFs"/>

===Certificates===
Gold certificates allow gold investors to avoid the [[Risk|risk]]s and costs associated with the transfer and storage of physical bullion (such as theft, large bid–offer spread, and [[Metallurgical assay|metallurgical assay]] costs) by taking on a different set of risks and costs associated with the certificate itself (such as commissions, storage fees, and various types of [[Credit risk|credit risk]]).

Banks may issue gold certificates for gold that is ''allocated'' (fully reserved) or ''unallocated'' (pooled). Unallocated gold certificates are a form of fractional reserve banking and do not guarantee an equal exchange for metal in the event of a [[Finance:Bank run|run]] on the issuing bank's gold on deposit. Allocated gold certificates should be correlated with specific numbered bars, although it is difficult to determine whether a bank is improperly allocating a single bar to more than one party.<ref>{{cite web |url=http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/4/7_Andrew_Maguire_%26_Adrian_Douglas.html |work=King World News |date=April 7, 2010 |title=Interview: Harvey Organ, Lenny Organ, Adrian Douglas |url-status=dead |archive-url=https://web.archive.org/web/20100701170920/http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/4/7_Andrew_Maguire_%26_Adrian_Douglas.html |archive-date=July 1, 2010 }}</ref>

The first paper bank notes were gold certificates. They were first issued in the 17th century when they were used by goldsmiths in {{wipe|England}} and the Netherlands for customers who kept deposits of gold bullion in their vault for safe-keeping. Two centuries later, the gold certificates began being issued in the United States when the US Treasury issued such certificates that could be exchanged for gold. The United States Government first authorized the use of the gold certificates in 1863. On April 5, 1933, the US Government [[Finance:Executive Order 6102|restricted the private gold ownership in the United States]] and therefore, the gold certificates stopped circulating as money (this restriction was reversed on January 1, 1975). Nowadays, gold certificates are still issued by gold pool programs in {{wipe|Australia}} and the United States, as well as by banks in {{wipe|Germany}}, {{wipe|Switzerland}} and Vietnam.<ref>{{cite web|url=http://vietnamembassy.org.au/Economics.htm |work=Vietnam Economics |date=August 4, 2013 |title=The economy of Vietnam: gold standard |url-status=dead |archive-url=https://web.archive.org/web/20130725210441/http://vietnamembassy.org.au/Economics.htm |archive-date=July 25, 2013 }}</ref>

===Accounts===
Many types of gold "accounts" are available. Different accounts impose varying types of intermediation between the client and their gold. One of the most important differences between accounts is whether the gold is held on an allocated (fully reserved) or unallocated (pooled) basis. Unallocated gold accounts are a form of fractional reserve banking and do not guarantee an equal exchange for metal in the event of a [[Finance:Bank run|run]] on the issuer's gold on deposit. Another major difference is the strength of the account holder's claim on the gold, in the event that the account administrator faces gold-denominated [[Social:Legal liability|liabilities]] (due to a [[Finance:Short|short]] or [[Finance:Naked short selling|naked short]] [[Finance:Position|position]] in gold for example), asset forfeiture, or [[Finance:Bankruptcy|bankruptcy]].

Many banks offer gold accounts where gold can be instantly bought or sold just like any foreign currency on a fractional reserve basis.{{Citation needed|date=June 2012}}<ref>{{Cite web|last=Lonergan|first=Martin|date=April 19, 2021|title=Swiss Banks offer allocated gold|url=https://www.financialsense.com/contributors/julian-phillips/swiss-bank-clients-unallocated-to-allocated-gold-accounts#:~:text=Swiss%20banks%20UBS%20and%20Credit,bullion%20in%20'allocated'%20accounts.}}</ref> Swiss banks offer similar service on a fully allocated basis. Pool accounts, such as those offered by some providers, facilitate highly liquid but unallocated claims on gold owned by the company. [[Finance:Digital gold currency|Digital gold currency]] systems operate like pool accounts and additionally allow the direct transfer of fungible gold between members of the service. Other operators, by contrast, allows clients to create a bailment on allocated (non-fungible) gold, which becomes the legal property of the buyer.

Other platforms provide a marketplace where physical gold is allocated to the buyer at the point of sale, and becomes their legal property.{{citation needed|date=October 2014}} These providers are merely custodians of client bullion, which does not appear on their balance sheet.

Typically, bullion banks only deal in quantities of {{convert|1000|ozt|kg}} or more in either allocated or unallocated accounts. For private investors, [[Chemistry:Vaulted gold|vaulted gold]] offers private individuals to obtain ownership in professionally vaulted gold starting from minimum investment requirements of several thousand U.S.-dollars or denominations as low as one gram.

===Derivatives, CFDs and spread betting===
[[Finance:Derivative|Derivative]]s, such as gold [[Finance:Forward contract|forwards]], [[Finance:Futures contract|futures]] and [[Finance:Option|options]], currently trade on various exchanges around the world and [[Finance:Over-the-counter|over-the-counter]] (OTC) directly in the private market.  In the U.S., gold futures are primarily traded on the New York Commodities Exchange ([[Company:New York Mercantile Exchange|COMEX]]) and Euronext.liffe.  In {{wipe|India}}, gold futures are traded on the [[Company:National Commodity and Derivatives Exchange|National Commodity and Derivatives Exchange]] (NCDEX) and [[Company:Multi Commodity Exchange|Multi Commodity Exchange]] (MCX).<ref>{{Cite web|url=http://www.ncdex.com/products/products_precious_gold100gms.aspx?Type=Gen|archive-url=https://web.archive.org/web/20061201055048/http://www.ncdex.com/products/products_precious_gold100gms.aspx?Type=Gen|url-status=dead|archive-date=2006-12-01|title=National Commodity & Derivatives Exchange Limited|date=Dec 1, 2006|access-date=Sep 26, 2020}}</ref>

As of 2009 holders of COMEX gold futures have experienced problems taking delivery of their metal. Along with chronic delivery delays, some investors have received delivery of bars not matching their contract in serial number and weight. The delays cannot be easily explained by slow warehouse movements, as the daily reports of these movements show little activity. Because of these problems, there are concerns that COMEX may not have the gold inventory to back its existing warehouse receipts.<ref>{{citation | work = The Huffington Post | title = Where's the gold? | author = Nathan Lewis | date = June 26, 2009 | url = http://www.huffingtonpost.com/nathan-lewis/wheres-the-gold_b_216896.html }}</ref>

Outside the US, a number of firms provide trading on the price of gold via [[Finance:Contract for difference|contracts for difference]] (CFDs) or allow spread bets on the price of gold.

===Mining companies===

The price of gold bullion is volatile, but unhedged gold shares and funds are regarded as even higher risk and even more volatile. This additional volatility is due to the inherent [[Finance:Leverage|leverage]] in the mining sector. For example, if one owns a share in a gold mine where the costs of production are US{{convert|300|$/ozt|$/g|abbr=off}} and the price of gold is {{convert|600|$/ozt|$/g}}, the mine's [[Finance:Profit margin|profit margin]] will be $300. A 10% increase in the gold price to {{convert|660|$/ozt|$/g}} will push that margin up to $360, which represents a 20% increase in the mine's profitability, and possibly a 20% increase in the share price. Furthermore, at higher prices, more ounces of gold become economically viable to mine, enabling companies to add to their production. Conversely, share movements also amplify falls in the gold price. For example, a 10% fall in the gold price to {{convert|540|$/ozt|$/g}} will decrease that margin to $240, which represents a 20% fall in the mine's profitability, and possibly a 20% decrease in the share price.

To reduce this volatility, some gold mining companies [[Finance:Hedge|hedge]] the gold price up to 18 months in advance.  This provides the mining company and investors with less exposure to short-term gold price fluctuations, but reduces returns when the gold price is rising.

==Investment strategies==

===Fundamental analysis===
Investors using [[Finance:Fundamental analysis|fundamental analysis]] analyze the [[Finance:Macroeconomics|macroeconomic]] situation, which includes international [[Finance:Economic indicator|economic indicator]]s, such as [[Finance:GDP|GDP]] growth rates, [[Finance:Inflation|inflation]], [[Finance:Interest rate|interest rate]]s, [[Finance:Productivity|productivity]] and energy prices. They would also analyze the yearly global gold supply versus demand.

===Gold versus stocks===
[[File:Dow Gold Ratio.png|thumb|Dow/Gold Ratio 1968–2008]]

The performance of gold bullion is often compared to [[Finance:Stock|stock]]s as different investment vehicles. Gold is regarded by some as a store of value (without growth) whereas stocks are regarded as a return on value (i.e., growth from anticipated real price increase plus dividends). Stocks and bonds perform best in a stable political climate with strong property rights and little turmoil. The attached graph shows the value of Dow Jones Industrial Average divided by the price of an ounce of gold. Since 1800, stocks have consistently gained value in comparison to gold in part because of the stability of the American political system.<ref>Investments (7th Ed) by Bodie, Kane and Marcus, P.570-571</ref> This appreciation has been cyclical with long periods of stock outperformance followed by long periods of gold outperformance. The Dow Industrials bottomed out a ratio of 1:1 with gold during 1980 (the end of the 1970s bear market) and proceeded to post gains throughout the 1980s and 1990s.<ref>{{cite web |url=https://www.goldrepublic.com/news/the-best-inflation-hedge-gold-versus-stocks.html |title=The Best Inflation Hedge: Gold versus Stocks |publisher=GoldRepublic |date=March 25, 2014 |access-date=November 11, 2014|archive-url=https://web.archive.org/web/20141104093626/https://www.goldrepublic.com/news/the-best-inflation-hedge-gold-versus-stocks.html |archive-date=November 4, 2014 }}</ref> The gold price peak of 1980 also coincided with the Soviet Union's invasion of Afghanistan and the threat of the global expansion of communism. The ratio peaked on January 14, 2000, a value of 41.3 and has fallen sharply since.

One argument follows that in the long-term, gold's high volatility when compared to stocks and bonds, means that gold does not hold its value compared to stocks and bonds:<ref name="Sowell, Thomas 2004">Sowell, Thomas (2004). ''Basic Economics: A Citizen's Guide to the Economy''. Basic Books, {{ISBN|978-0-465-08145-5}}.</ref>
{{blockquote|1=To take an extreme example [of price volatility], while a dollar invested in bonds in 1801 would be worth nearly a thousand dollars by 1998, a dollar invested in stocks that same year would be worth more than half a million dollars in real terms. Meanwhile, a dollar invested in gold in 1801 would by 1998 be worth just 78 cents.<ref name="Sowell, Thomas 2004"/>}}

===Using leverage===
Investors may choose to [[Finance:Leverage|leverage]] their position by borrowing money against their existing assets and then purchasing or selling gold on account with the loaned funds. Leverage is also an integral part of trading gold [[Finance:Derivative|derivatives]] and [[Finance:Hedge|unhedged]] gold mining company shares (see gold mining companies). Leverage or derivatives may increase investment gains but also increases the corresponding risk of capital loss if the trend reverses.

==Taxation==
{{Main|Finance:Taxation of precious metals}}
Gold maintains a special position in the market with many [[Engineering:Tax|tax]] regimes.  For example, in the [[Social:European Union|European Union]] the trading of recognised gold coins and bullion products are free of VAT. [[Chemistry:Silver|Silver]] and other precious metals or commodities do not have the same allowance.  Other taxes such as [[Finance:Capital gains tax|capital gains tax]] may also apply for individuals depending on their [[Finance:Tax residence|tax residency]]. U.S. citizens may be taxed on their gold profits at collectibles or capital gains rates, depending on the investment vehicle used.<ref>{{cite web |last=Knepp |first=Tim |url=http://www.onwallstreet.com/ows_issues/2010_1/many-ways-to-gain-exposure-to-gold-2665039-1.html |title=Gold taxes |publisher=Onwallstreet.com |date=January 1, 2010 |access-date=March 16, 2010 |url-status=dead |archive-url=https://web.archive.org/web/20091231025230/http://www.onwallstreet.com/ows_issues/2010_1/many-ways-to-gain-exposure-to-gold-2665039-1.html |archive-date=December 31, 2009 }}</ref>

==Scams and frauds==
Gold attracts a fair share of fraudulent activity.  Some of the most common are:
* Cash for gold&nbsp;– With the rise in the value of gold due to the financial crisis of 2007–2010, there has been a surge in companies that will buy personal gold in exchange for cash, or sell investments in gold bullion and coins. Several of these have prolific marketing plans and high-value spokesmen, such as prior vice presidents. Many of these companies are under investigation for a variety of [[Finance:Securities fraud|securities fraud]] claims, as well as laundering money for terrorist organizations.<ref>{{cite web|url=https://abcnews.go.com/Blotter/glenn-beck-fires-back-goldline-investigation/story?id=11218568 |title=Glenn Beck Fires Back Over Goldline Investigation - ABC News |publisher=Abcnews.go.com |date=July 21, 2010 |access-date=February 12, 2014}}</ref><ref>{{cite web|author=Stephanie Mencimer |url=http://motherjones.com/mojo/2010/07/goldline-finally-under-investigation |title=Goldline Finally Under Investigation |publisher=Mother Jones |access-date=February 12, 2014}}</ref><ref>{{cite news|url=http://www.huffingtonpost.com/2009/12/07/glenn-becks-golden-confli_n_383242.html |title=Glenn Beck's Golden Conflict Of Interest |publisher=Huffingtonpost.com |date=December 7, 2009 |access-date=February 12, 2014 |first=Danny |last=Shea}}</ref><ref>{{cite news|url=http://www.huffingtonpost.com/2010/07/20/glenn-becks-sponsor-goldl_n_652766.html |title=Glenn Beck's Sponsor Goldline Under Investigation By Los Angeles D.A. For Fraud (VIDEO) |publisher=Huffingtonpost.com |date=July 20, 2010 |access-date=February 12, 2014 |first=Tom |last=Kent}}</ref> Also, given that ownership is often not verified, many companies are considered to be receiving stolen property, and multiple laws are under consideration as methods to curtail this.<ref>{{cite web|url=http://www.dailyfinance.co.uk/2010/10/28/cash-for-gold-boom-boosts-crime/ |title=Aol Money &#124; Personal Finance Comparison, Business News & Market Updates |publisher=Dailyfinance.co.uk |access-date=February 12, 2014}}</ref><ref>{{cite web |url=http://stcroixsource.com/content/news/local-news/2010/03/27/cash-gold-businesses-fueling-crime-police-say |archive-url=https://web.archive.org/web/20110716135132/http://stcroixsource.com/content/news/local-news/2010/03/27/cash-gold-businesses-fueling-crime-police-say |archive-date=July 16, 2011 |title=Cash-for-Gold Businesses Fueling Crime, Police Say |last=Kossler |first=Bill |date=March 27, 2010}}</ref>
* High-yield investment programs&nbsp;– HYIPs are usually just dressed up [[Finance:Pyramid scheme|pyramid scheme]]s, with no real value underneath.  Using gold in their prospectus makes them seem more solid and trustworthy.
* Advance fee fraud&nbsp;– Various emails circulate on the Internet for buyers or sellers of up to 10,000 metric tonnes of gold (an amount greater than US Federal Reserve holdings).  Through the use of fake legalistic phrases, such as "Swiss Procedure" or "FCO" (Full Corporate Offer), naive middlemen are drafted as hopeful brokers.  The end-game of these scams varies, with some attempting to extract a small "validation" amount from the innocent buyer/seller (in hopes of hitting the big deal),<ref>{{cite news |url=http://news.bbc.co.uk/1/hi/world/africa/3887493.stm |archive-url=https://web.archive.org/web/20090228132855/http://news.bbc.co.uk/1/hi/world/africa/3887493.stm |archive-date=February 28, 2009 |title=Turning the tables on Nigeria's e-mail conmen |first=Dan |last=Damon |date=July 11, 2004 |work=BBC News}}</ref> and others focused on draining the bank accounts of their targeted dupes.<ref>{{cite web|author=Joe Wein |url=http://www.419scam.org/ |title=Advance Fee Fraud and Fake Lotteries |publisher=419 Scam |date=June 21, 2011 |access-date=February 12, 2014}}</ref>
* Gold dust sellers&nbsp;– This scam persuades an investor to purchase a trial quantity of real gold, then eventually delivers [[Chemistry:Brass|brass]] filings or similar.
* Counterfeit gold coins.<ref name=":0" />
* Shares in fraudulent mining companies with no gold reserves, or potential of finding gold. For example, the Bre-X scandal in 1997.
* There have been instances of fraud when the seller keeps possession of the gold.<ref>{{Cite web|url=http://about.ag/GoldSilverFraud.htm|title=Gold and Silver Bullion Bankruptcies, Fraud, Government Actions, etc.|website=about.ag|access-date=Sep 26, 2020}}</ref>  In the early 1980s, when gold prices were high, two major frauds were International Gold Bullion Exchange and Bullion Reserve of North America.<ref>Audit After Gold Dealer's Suicide Suggests Customers Lost Millions ''New York Times'' October 5, 1983 [https://www.nytimes.com/1983/10/05/business/audit-after-gold-dealer-s-suicide-suggests-customers-lost-millions.html]</ref>  More recently,{{when|date=February 2020}} the fraud at [[Finance:E-Bullion|e-Bullion]] resulted in a loss for investors.{{citation needed|date=February 2020}}

==See also==
{{div col}}
* [[Chemistry:Gold fixing|Gold fixing]]
* [[Chemistry:Gold repatriation|Gold repatriation]]
* [[Finance:Full-reserve banking|Full-reserve banking]]
* Gold exchange-traded product
* [[Finance:Inflation hedge|Inflation hedge]]
* [[Chemistry:Vaulted gold|Vaulted gold]]
* [[Chemistry:Peak gold|Peak gold]]
* [[Chemistry:Gold reserve|Gold reserve]]
* [[Finance:Traditional investments|Traditional investments]]
* Alternative investments
* List of bullion dealers
{{div col end}}

===Rare materials as investments===
* [[Chemistry:Diamonds as an investment|Diamonds as an investment]]
* [[Chemistry:Palladium as an investment|Palladium as an investment]]
* [[Chemistry:Platinum as an investment|Platinum as an investment]]
* [[Chemistry:Silver as an investment|Silver as an investment]]

==References==
{{Reflist}}

==External links==

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