If you want direct investment in the gold index then I would recommend GLD. This is the 'streetTRACKS Gold Shares ETF'. It mirrors the GO@LD, which is the London gold index price. This is directly correlated to the gold price. Gold is trading at $900/ounce today and GLD is at just under $90/share.
To evidence the statement that GLD and GO@LD mirror each other, I have pasted in the graphs below. The top is GO@LD, again, the actual price per ounce of gold and the bottom is GLD, the etf that mirrors the gold price.
GO@LD
GLD
Looks the same right? Well, that's b/c it is! Just goes to show there is no reason to buy the actual gold. Just buy GLD.
Another play would be to own stock in gold explorer, miner, producer and manufacturer companies. Some of these are ABX, AUY, NEM, GG, GOLD, and HMY. There are several others but these are the most well known. They differ somewhat as to where they mine or own mines at and to what extent they are vertically integrated (which means whether they just mine the gold or if they look for it, mine it, and then produce bars/coins, and sell it). Check some of them out and see if owning one or a couple would interest you.
The main idea is to diversify your portfolio. The best way to do so is to own some gold in the portfolio b/c it is a hedge against the dollar and inflation. This helps b/c usually the dollar depreciates during times when the market has soured, precisely as it has done in the past 6 months or so. During the same time gold has appreciated and the GLD and gold stocks have followed.
For the record, I own AUY. I think it's a great growth play. I also believe gold as a commodity will continue to rise in price for a year or two, or at least until the inflation anxiety passes.
The Guru
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