How to Buy Gold Shares in South Africa

Gold has always been considered a worthy commodity and a hedge against wrong investments. The Republic of SA, one of the countries that boast sizeable gold reserves, opens up opportunities for its capitalists to venture into gold in the form of shares. Owning gold shares allows a capitalist to partly own gold mining firms, thereby offering returns on the performance of the gold sector.

How to Buy Gold Shares in South Africa

The purchase of South African gold shares can be uncomplicated since it refers to buying several gold mining companies listed within the Johannesburg Stock Exchange. First, a brokerage account must be opened with a licensed stockbroker. Many well-known ones include EasyEquities, FNB Securities, Standard Bank Online Trading, and PSG Wealth, which allow access to JSE-listed gold mining shares.

First, you would have needed to open a brokerage account. If you already have one, you next search for gold mining companies listed on the JSE, from huge mining companies like AngloGold Ashanti and Sibanye Stillwater to Gold Fields, among others. You will now choose from all those available gold shares you may want to invest in and place your order through your online brokerage platform.

The prices of gold shares will fluctuate according to the ruling world gold price and the underlying performance of the respective mining company. Investment in gold in South Africa involves physical stocks or other alternative options of gold Exchange-Traded Funds. These instruments expose the investor to the price of gold without holding it physically. For instance, NewGold ETF gold prices are listed on the JSE for trading. The advantage of such an ETF, whereby investment is made directly into gold, is that it is seen to be diversified and less volatile.

How Many Shares of Gold Should I Buy?

Buying gold shares will depend on investment return targets, risk tolerance, and budget. Like any other investment decision, the number of shares one buys in gold must be determined by the investor’s financial position and the investment horizon. Therefore, investing a little in gold shares will benefit the investor. You get some exposure in the market and build up over time as you get more familiar with the performance of the gold sector.

The most common strategy is diversifying one’s venturing portfolio by devoting a certain percentage of the total ventured capital to gold shares. Many monetary advisors suggest that 5% to 10% of one’s portfolio must be put into gold, contingent upon the risk appetite. If the markets turn volatile, this will be a hedge, yet it gets you on the bandwagon of probable upside changes in the gold sector.

The gold market is always unstable, and the prices of gold shares can show wide variations depending on geopolitical tension, economic indicators, and world demand for gold. It is, therefore, vital to keep up-to-date with the latest trends in his or her gold investments.

Which Bank is the Best to Buy Gold From?

Several South African banks have a platform where capitalists can buy gold shares. Among the top ones are Standard Bank and FNB, which offer online trading that helps investors purchase their gold shares. The two banks avail access to JSE and facilitate several ways and means required by an investor who seeks entry into the gold market.

Investors can trade gold mining shares and ETFs via Standard Bank’s Online Share Trading platform. Research material, market insights, and trading tools shall be provided to inform the best decision-making possible. Standard Bank has a history of ease of use and broad customer support, thus being a perfect bet for new and established investors.

Besides this, FNB provides a trustworthy platform for trading in gold shares: its Share Investing service. Among many, there are JSE-listed gold shares and ETFs that an FNB client can trade through his bank account. Added to that is convenience for those who can already be banking at FNB. Therefore, the platform goes well with investors who want smoothness and continuity in their banking and investment needs.

Is Gold Share a Good Investment?

Gold shares are a good investment for those who plan to reduce risks in their portfolios and hedge against market volatility. Conventionally, gold was viewed as that asset to which one retreated when such uncertainty in the economy reigned since its price appeared to stabilize at a time when the other stock markets were unstable. 

As SA is among the significant worldwide gold producers, investors can invest in well-established mining companies boasting a vast global presence.

However, as with every investment class, there are risks in gold shares, too. Gold is a volatile investment that determines interest rates internationally, inflation, and even appreciating or depreciating currencies. Mining companies are susceptible to labor disputes, regulatory changes, and environmental challenges.

How Much Gold Should a Beginner Buy?

The best route ordinarily available for the beginner investor in gold shares is to go the conservative way. As mentioned above, financial experts recommend investing only a tiny portion of their investment portfolio in gold- about 5 to 10 percent- to diversify their portfolio with some gold without over-investing in it, thereby increasing risk.

If you are a new investor, start with gold ETFs first; this instrument offers diversification and usually provides less volatility compared to individual mining stocks of gold. For example, the NewGold ETF allows gold prices to be tracked without bothering with the performance of particular companies. All this can be a safer and more comfortable way to start gold investing.

How to Trade Gold for Beginners?

The first step in trading gold shares as an absolute beginner is to comprehend the dynamics of the gold market and use reliable instruments to track market trends. First, open your brokerage account with an accredited institution: EasyEquities, Standard Bank, or FNB Share Investing. Once a total beginner has opened the account, he should get acquainted with the mining group or ETF listed on the JSE. Many such platforms provide ample materials for education, tutorials, and market analyses that should help the beginner make decisions competently.

To successfully trade in gold, one has to monitor global economic information. This is because such information may lead to a direct impact on the price of gold. For example, one needs to know the interest rate trend, inflation, or geopolitical events that would trigger demand for gold. Again, it is worth considering investing with stop-loss orders, which would help you limit your risk should there be an unexpected drop in the price of gold or its shares.

Keep Reading

Explore more →

How Mutual Funds are Marketed and Sold

This would cover all those strategies that would inform the prospective investors about the mutual fund itself, the risks and returns associated with it.

Internal Rate of Return [IRR] – Calculation

This broad-based guide examines how to calculate IRR, what it means, how different it is from ROI, and finally, what a good IRR will be.

How to Make Tax-Free Investment in South Africa?

This article will guide you on how to make tax-free investments. We'll cover what a tax-free venture is, how it works, and possibly the best option to go with.

What are ETF [Exchange-Traded Funds]?

ETF have become popular investment vehicles worldwide and are so prevalent in South Africa due to their flexibility and accessibility.

What Are the Best Types of Investments in South Africa?

Thus, first-time and established investors must use several investment opportunities to obtain maximum returns with the lowest possible risk. This article looks at six vital types of investment

Should I Invest in My Child’s Name or Mine?

This article will discuss various factors relating to investments in your child's name versus your own, including insights into the best strategies to consider.

How To Invest Your Money Short-Term

Understanding all the possible avenues available and how best one can apportion their short-term investment

Is It Good to Borrow for Investment?

While it might amplify gains, it also amplifies losses. Thus, it's pivotal to understand how this works and the associated risks and disadvantages before making any decisions.

How To Invest In REITs In South Africa

In South Africa, REITs are listed publicly on the Johannesburg Stock Exchange; hence, this avenue gives investors an opportunity to realize income from both rental yields and capital uplifts.

How to Buy Shares In South Africa

This article should guide you in buying shares in South Africa. You'll understand the market, the benefits of investing, and potential earnings.

How to Invest in South Africa

Following these guidelines will increase your possibilities of a better investment strategy and be well on your way toward real financial growth.

How Do REITs Work?

On the one hand, REITs pay investors regular dividends, found within current income, with the same proposition offering the probable capital appreciation in the long run.

10 Great Investing Hacks

This piece looks at ten practical investing hacks relevant to South Africans. These tips should help you make intelligent choices, steadily grow wealth

How to Make A Safe Real Estate Investment

The following article is a step-by-step guide on how to do this in South Africa. It offers hands-on tips and insights to help one successfully negotiate the market.

6 Ways to Save Money as a Student

This paper will outline some tips that will help students in South Africa save their cash to the best of their abilities and manage it effectively.