The new commodity boom might just be in Gold.  Gold has moved from $660 last August to $950 today, nearly a 50% gain.  As worries of inflation grow, prices for gold and other commodities are likely to skyrocket.

There are many ways to invest in gold.  First is the physical ownership of gold bars.  These can usually be purchased at almost any coin shop or online at various gold reserves.  Physical gold is often the most expensive, ounces can be marked up nearly $20 per ounce just to cover the day to day changes in gold prices.  Of all the ways to purchase gold, direct ownership is the most expensive and illiquid of them all.  While you can trade physical gold for anything, it is unlikely that stores near you will be accepting gold in the near future.  Physical gold is the most safe, as it is in your own possession and not affected by the closure of banks or reserves that might otherwise hold your gold.

Next method of purchase is through a gold futures or commodities account.  These accounts usually require thousands of dollars to fund up then take more investment knowledge to trade.   You usually aren’t trading the actual physical gold, but the option to buy gold at a certain price.  Gold futures and options can be difficult to trade and understand and in some cases are not backed by physical gold.

The easiest method, and the preferred method is to purchase stocks that deal with gold in mining or refining for industrial use.  These companies own direct access to gold and have the metal as an asset to back them up.  While gold prices have risen 50%, most gold companies have seen their profits and market capitalization rise even more than 50%.   These positions are seen to be leveraged, a difference in $20 in gold can easily double the profitability of a company pushing the stock value higher and higher.  Gold miners also pay a dividend on their stock, which is another reason to buy the company rather than the gold.  The unfortunate disadvantage is that the value will be determined by the corporate news, if your investment starts going under it will be due to the market rather than the business.

All in all the best way to gain exposure to gold is an investment in the mining companies.  As gold prices rise, the value of gold miners and other companies in the industry will far outpace the rise in gold price.  Gold corporations will also pay dividends for your investment, something that physical possession and futures will not.  All in all, buying stocks in gold miners is the best bang for your money.