With gold prices skyrocketing, some serious investors are interested in owning large quantities of gold, and understandably don't feel secure hoarding that gold in their homes. Sure, having a few gold coins hidden in your house is pretty standard, but holding several thousand dollars or tens of thousands of dollars worth of gold in your home is not a wise idea. Theft or disaster could rob you of your gold, and the very security your gold is meant to bring you.
The traditional answer to hoarding is to keep your gold in safe and secured storage. These days there are simple methods that can even be carried out online. Depository receipts for gold are traded on the New York Stock Exchange, using the symbol GLD. Depository receipts are the documents that state your ownership of the gold. So when you buy depository receipts, you are buying the gold but the gold is kept in the same vault as before. You own the gold without possessing it.
Since depository receipts are traded on the NYSE, you can use an online brokerage like E-trade or Ameritrade to purchase gold just like a stock. This allows you to invest in gold and benefit from the longterm security it provides, and allows you to avoid keeping physical gold in your home and risking theft or loss during a disaster.
The downside is that you do not physically possess the gold in your hands, so you can't enjoy it for its aesthetic value, and in case of severe emergency you will not be able to use the gold as a medium of exchange because you won't physically possess it. You would have to sell the depository receipts, then wire the money from your brokerage to your bank account, withdraw the cash, and then spend it. This may not be your best option if your currency is rapidly hyperinflating and your bank doesn't have enough cash to fund all withdrawals.
Perhaps the best way to invest in gold is to possess some small quantity of physical gold in your home, in the form of coins or small bars, and for larger amounts to invest in gold online through depository receipts. The real benefit of this is that you can buy and sell actual gold right from your computer desk without ever having to transport it. And who knows how high gold prices will go, but if they ever reach a point when you are determined to sell immediately, fearing that it's a bubble about to burst, you can sell quickly from the comfort of your own home, just like a stock. That incredible 21st century convenience makes this a nice option to have.
Another benefit is that you will not have to pay all the transaction fees you have to pay when buying physical bars of gold bullion. Gold bullion coin prices as well as gold bullion bar prices often have a significant markup, but when buying through an online brokerage you simply have to pay your transation fee. For no-frills online brokerages such fees can be as low as $4.95 per transaction with TradeKing. Not only is it convenient to invest in gold online, but in practical terms it also gives you the best gold prices.