THE BLOG

The Case for Gold -- Just in Case!

05/11/2015 09:16 pm ET | Updated May 11, 2016

No one is talking much about gold these days, since gold is typically viewed as a hedge against inflation, and there's very little inflation around. Even worse, if the Fed raises rates, gold becomes less attractive as an investment. The price of gold has been fluctuating wildly around $1200 an ounce, not gaining a distinct direction.

But that might not always be the case - especially with central banks around the world, including Japan, Europe, and China, "printing money" furiously in an attempt to stimulate their economies. Gold in Euro terms is up 16.4 percent over the past year, and 8.7 percent against the yen, while the price of gold is down 6.7 percent against the U.S.dollar.

If you're intrigued, here are five ways to buy gold, including against other currencies.

1. Gold in Yen or Euros. There are two exchange-traded funds (ETFs) that allow you to invest in gold in these currencies. They are GYEN and GEUR, the Advisor Shares Gartman ETFs, listed on the NYSE, which allow you to trade gold against the two currencies. [See my previous columns in my HuffingtonPost archives for a full description of how they work.]

2. Gold ETF. The easiest way to buy or sell the price of gold in dollars is to use the SPDR Gold Trust, symbol GLD, the largest of these ETFs, traded on the NYSE. The shares trade directly based on the price of gold bullion, minus the miniscule expenses of running the fund. There are also "leveraged" gold ETFs, which magnify gains (and losses) in the gold price. Or you might be interested in the Merk Gold Trust, also NYSE listed under the symbol OUNZ. It allows you to take physical delivery of gold bars, as well as simply buying and selling the shares of the ETF.

3. Gold Stocks or Mutual Funds. There are dozens of publicly traded gold mining companies, some of them very large and listed on major exchanges, and others which are "penny stocks" and very speculative. Depending on the price of gold and company profits, many of the larger companies pay a dividend to shareholders. Major fund companies, including Fidelity, Vanguard, American Century and U.S. Global Investors offer gold mutual funds.

4. Gold Bullion or Coins. Several countries around the world, including the United States are currently minting gold bullion coins. Each trades at a slight premium to the price of gold, and the premium varies depending on demand for the coin. For example, with gold at $1200 an ounce, www.HarlanJBerk.com, a major dealer, quotes a single-coin price of $1270 for the American Eagle, $1260 for the Canadian Maple Leaf, and $1285 for the Chinese panda - each a containing one ounce of gold.

Older American gold coins such as the U.S. $20 coin, not made since the 1930s, sell for an even higher premium because of their rarity. An "uncirculated" U.S. $20 gold coin would cost about $1350 with gold at $1200/ounce.

To find a reputable coin dealer go to www.PNGDealers.com, the website of the Professional Numismatists Guild. Be sure to take delivery of your gold, and then safeguard your purchases in a bank vault.

5. Gold Futures and Options If you truly want to speculate, you can buy gold futures (in 100 troy ounce contracts) and options on the Comex division of the CME. (Full disclosure: I serve on the board of CME Group, Inc.) This type of speculation is not for novices as the markets are volatile and you can lose more than your initial margin deposit.

Gold should be considered in the context of all your investments, as a "hedge" against potential future inflation. In that role it has served investors well for millennia. In fact, since 1970, the annualized return for gold through the end of March this year was 8.2 percent per year -- while having a zero correlation to equities.

The time to buy gold is when it's not making headlines. And that's The Savage Truth.