A gold accumulation plan is similar to conventional money savings plans. It is based on the principle of setting aside a specified sum of money on a monthly basis. This sum of money is then used to purchase gold at the last trading day of the month. Depending on the plan selected, the sums payable monthly can be quite small and gold purchases are not subject to the regular premium which is normally levied on small coins and bars.
The investor may accumulate gold in the form of gold coins, physical gold bars, gold futures, gold fund of funds, gold exchange traded funds and gold jewelry among others. The greatest demand comprises of physical gold bars, a commodity whose market is largely unorganized. Perhaps this overwhelmingly increasing demand is attributed to clamor for savings products backed by gold in the past few years.
Various gold trade regulating bodies such as the World Gold Council have consistently conducted research before setting up new gold accumulation plans aimed at making the investors’ work much easier. Customers can now buy smaller gold amounts into their gold accumulation plans, a move aimed at enabling everyone to participate in the bullion market. These plans make the whole practice of gold accumulation transparent before investors and straightforward thus enabling customers to convert these accumulated grams of gold into jewelry and coins.
Gold accumulation plans offer many benefits to customers:
- They are a form of low risk investment products.
- They enable customers to hold onto gold more steadily based on their preferred daily price which effectively spreads risk and cost.
- Through the small contributions made, customers can amass large amounts of gold.
- Continued and committed investment in gold bullion can significantly increase your wealth.
- Gold accumulation plans can be sold at any time to generate cash especially which could benefit an investor in times of financial constraints.