Which Is Better – Investing in Gold Mining Stock or in Actual Gold?

Gold is one of the safest investment options to protect against inflation and market crashes. With gold prices rising after January, investors are again taking interest. Investments in physical gold and gold mining stocks are two popular methods of owning gold. There a few similarities between the two, in addition to differences. The question is which option is better?

Similarities

Gold has a baseline worth few different commodities have. Its practical value in technology, manufacturing and economics provides the precious metal a degree of value stability. It follows that both physical gold and gold mining stocks have the potential to recuperate from any financial loss incurred through inflation or hardship.

Differences

Investing in gold mining stock means you’re betting on the success of a specific company instead of gold in general. By putting your money in physical gold, you’re buying gold bullions and coins that’s directly related to the health of the gold market itself. Moreover, commodity investments don’t generate income.

Advantages of Gold Mining Stock over Physical Gold

The biggest benefit of gold mining stock is that it moves up with the growth in gold prices. Stock value depends on a provider’s management and individual performance. This means that if you invest in the right mining stocks, they can elevate your investment portfolio considerably faster than physical gold rates. On the other hand, the value of physical gold is dependent upon market sentiment following economic downturn. The appreciation in this case is continuous.