How to ... Buy gold as retail client

2014-09-07 06:00

The world’s favourite precious metal is unlikely to ever go out of fashion. Maya Fisher-French lists your options

Gold ETFs

Exchange-traded funds (ETFs) are the most popular way for investors to gain exposure to gold because they are easy to trade and do not require you to hold physical gold.

Absa Capital’s NewGold ETF and Standard Bank’s AfricaGold ETF track the rand price of gold and can be bought through a stock broker as you would buy a normal share.

Alternatively, you can invest through the Absa Investment Management Services investment plan, or through eftSA at


Some people prefer to actually own physical gold coins that they can hand down to their children, or simply keep as a movable asset. You can purchase physical Krugerrands, although you run the risk of theft, so these should be kept in a safety- deposit box.

If you want to own Krugerrands, but want security in holding them as well as tradability, you can purchase them through FNB Share Invest, where your Krugerrands will be kept in safe custody.

Recently, a Krugerrand-denominated bond listed on the JSE that gives investors direct exposure to gold without holding the physical coin and removes the cost of keeping it in safe custody.

It requires investors to buy Krugerrands, which they then lend to FirstRand when purchasing the bond.

At its expiry, the value of the bond is determined by the current gold price, the dollar/rand exchange rate and the interest earned.

This interest is calculated in terms of ounces of gold as represented by Krugerrands. Investors may take physical delivery of the Krugerrands on maturity, or opt to get settled in cash.

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