4 gold investments that have returns during recession

Gold is often seen as a relatively boring hedge of inflation, but in recent years it has been an absolutely excellent performer.

While gold did not significantly improve when inflation peaked in mid-2022, it began in October 2023 and grew 83% in the following 18 months. From general economic uncertainty to geopolitical turmoil to momentum and speculation, there are many reasons.

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With the first quarter economic signing and the full impact the Trump administration hasn't yet reached, some economists are preparing for the recession – an environment that can bring further gains to gold.

Here are some ways investors can participate in the gold market.

The easiest and most liquid way to participate in the gold market is funds traded through exchanges (ETFs). Gold ETFs trade on public stock exchanges and can be purchased and sold at any time in the market.

In the era of zero committee brokers, these transactions could be done for free with only a smaller fee ratio delaying returns. No insurance or storage is required, no need to worry about losses, you can determine the exact value of your investment from second to second in the open market. You can also hold gold ETFs in your retirement account, some of which are prohibited from holding physical gold bars or collectibles.

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Before the invention of gold ETFs, the traditional way to buy gold was to own physical gold bars in the form of bars, turmeric and even coins. Even now, investors prefer to have a tangible asset that they can touch and hold in their hands, which is increasingly rare in the era of electronic assets.

The advantage of gold bars is that dealers are easily available, usually 99.9% pure, meaning it will always have a market. The disadvantage of physical gold bars is that they must be stored safely, which can be expensive. Gold bar dealers also usually charge significant marks for selling or purchasing gold bars.

Another way gold prices rise is to have companies that really mine and perfect precious metals. Most major gold producers trade on public stock exchanges and can be traded at no commission like gold ETFs.

However, it is important to note that gold mining tools have different risk-reward characteristics than having gold bars or ETFs. Although mining stocks are affected by gold prices, they may evaporate because they are also affected by other factors. The company's revenue, operational efficiency, its production costs and geopolitical climate are just some factors that can transfer share prices.