Here's how you can buy gold

Buying physical gold

The Perth Mint allows you to buy bars of bullion (a 50-ounce bar will make you feel like you're in Goldfinger but will set you back $62,513.77), gold coin (from one twentieth of an ounce to a kilo), or certificates confirming your ownership of gold stored within the Mint's vaults. It's all government guaranteed, just in case someone tries to be Goldfinger for real. Bullion and coin clearly give you a genuine exposure to gold there's no risk of holding something synthetic that's meant to track gold but turns out not to do so but it comes with storage costs.

Exchange traded funds

An ETF is bought and sold like any other share but represents something else often a sharemarket index, for example. You can buy Australian-listed ETFs that track the gold price. One is ETFS Physical Gold, previously known as Gold Bullion Securities; unlike some gold ETFs around the world, this one is backed by physical allocated metal held by a custodian, HSBC Bank USA. It's cheap: the management fee is 0.4 per cent a year.

Gold equities

This involves buying the shares of a gold mining company, such as the two biggest in Australia, Newcrest Mining and Lihir Gold (the former is in the midst of a takeover bid for the latter). Miners are exposed to the gold price but share price movements will depend on plenty of other things chiefly their ability to find it and mine it efficiently. Some mining stocks will perform better than gold over a period of time; others will do much worse.

Gold funds

There are managed funds that invest in gold equities (often with exposure to other precious metals, too). An example is the Baker Steel Gold Fund, managed by the Anglo-Australian investment group Baker Steel Capital and offered in Australia through Select Asset Management. This fund invests mainly in small- to mid-cap equities globally but can put up to half its money in gold/precious metal ETFs, futures and commodities. It charges a 1.89 per cent management fee and a performance fee of 10.25 per cent for outperformance of its benchmark, the FTSE Gold Mines Index.

Gold futures

These are derivatives, which can use leverage (borrowing) to gain exposure to movements in the gold price. Investors need to be sophisticated and experienced before using futures to invest, especially with heavy leverage.