MOSCOW, March 21. /TASS/. Investing in gold has traditionally been a good way to hedge risk during tough economic periods. Experts interviewed by TASS gave some advice about the best practices when investing in the precious metal.
"From the viewpoint of diversification, gold is a solid investment that shields investors during turbulent economic times. It is possible to invest in gold in various ways, for example, by investing in non-physical gold, or purchasing ‘gold’ bonds, other stock instruments (including shares of gold miners), or opening unallocated bullion accounts. One can invest in physical gold by purchasing precious coins or bullions," Finam’s analyst Nikolay Dudchenko said. The best option is to invest in non-physical gold, he noted, adding that investing in physical gold usually carries additional expenses such as renting a safe deposit box or buying insurance if the investor plans to keep the metal at home..
However, investing in non-physical gold also has its downsides, the analyst stressed. "For example, impersonal accounts are not insured, which is why it is necessary to choose the bank for the opening of such an account carefully. Various lenders may provide differing buy/sell spreads on precious metals, which should also be considered," he explained. When buying bonds or shares it is necessary to do a thorough check on broker and securities issuers. For investors who don’t have time to do a deep dive into how shares and bonds work, the prudent move is to open an unallocated bullion account, the expert concluded.
BCS World of Investment’s personal broker Gusein Rzayev advises purchasing the precious metal on the Moscow Exchange. "Today’s low exchange rate of the dollar against the ruble makes it possible to earn double profit, in the form of growth of the rate of gold itself and growth of the dollar’s exchange rate against the ruble. The thing is that amid the improving situation on the peaceful settlement on Ukraine, the dollar’s exchange rate against the ruble has declined to 82-83, which is far lower than provided by the budget - 96.5 rubles with the export oil price of $70 per barrel. In the mid-term the dollar’s exchange rate against the ruble has all prerequisites to return to the level around 100 rubles," he said. This makes investing in gold through the purchase of stock gold more attractive than purchasing shares of gold-mining companies, the expert added.
Chief Strategist at Vector X Maxim Khudalov believes that from the viewpoint of investment gold miners’ stock is more interesting now.