Four of the nine known precious metals are regarded as investment commodities. Of these four, gold is the most popular. Investing in gold is a way of protecting against crises that may be brought about by economic or political instability or by social unrest.

There are at least six ways of investing in gold:

Buying gold coins:

This is the most popular way of investing in gold. Gold bullion coins are typically priced based on their weight; a premium is added to the gold spot price. Gold coins may be bought or sold over the counter in most Swiss banks.

Buying gold bars:

This is the most traditional way of investing in gold. As in gold bullion coins, bullion gold bars can be bought or sold over the counter in most Swiss banks, as well as in major banks in Liechtenstein and Austria. There also are bullion dealers that provide this same kind of service. Gold bars however are becoming less and less an option among investors due to the difficulties (in the verification process, transportation, and storage) associated with them.

Opening a gold account:

Gold accounts are offered by most banks in Switzerland. Here, gold can be bought or sold in much the same way foreign currencies are dealt. A gold account is backed either through non-fungible (allocated) gold storage or pooled (unallocated) storage.

Owning a gold certificate:

A gold investor may opt to hold on to a gold certificate rather than store the physical gold bullion. The gold certificate allows the investor to buy and sell the security and do away with the many difficulties associated with the actual gold's transfer.

Trading in Gold Exchange-Traded Funds (GETFs):

Trading in GETFs is like trading shares in, say, the New York Stock Exchange or the London Stock Exchange. Gold Bullion Securities, the first GETF introduced (in 2003, on the Australian Stock Exchange), stood for 1/10 of an ounce of gold. GETFs are a good means of gaining exposure to the price of gold, minus the inconvenience of storage. Trading in GETFs involves payment of commission and storage fee (charged on an annual basis). The expenses incurred in relation to the handling of the fund are charged through the selling of a certain amount of the gold as represented by the certificate. Over time, the amount of gold in the certificate, as may be expected, decreases.

Entering in a Contract For Difference (CFD):

Some of the noted financial services firms, especially those in the United Kingdom, provide Contract for Difference (CFD). In this gold investment vehicle, two parties (a "buyer" and a "seller") enter into a contract, in which the seller agrees to pay the buyer the difference between the current value of gold and its value at contract time. In case the difference is negative, the seller receives payment instead from the buyer. A CFD, therefore, allows an investor to take advantage of long or short positions, enabling him/her to speculate on these markets.

In a related scenario, an investor may buy gold early in a condition where there is increased investor confidence. The investor then sells the gold before a general decline in the stock market sets in. Obviously in this case, the investor's aim is to gain financially.

 

The word placer, as will be found throughout here, is derived from the same Spanish word which means "sandbank". It specifically refers to an alluvial deposit of detrital material, such as gravel, which contains particles of precious chemical elements.

The term "placer gold", therefore, refers to gold that has formed in rocks moved and placed on stream beds by some geological forces and by the action of water. Lode gold tends to erode from its source, distributing itself naturally among other rocks that have been subjected to similar geological forces. This results to the formation of a secondary deposit.

Thus the mining of alluvial deposits for gold and other precious metal deposits is called "placer mining". Placer mining may be done through a number of tunneling procedures into riverbeds. There also are the open-cast mining and hydraulic mining. In the former, placer mining is done by open-pit; in the latter, water pressure is used for excavation.

There are three placer mining methods used to mine placer gold:

Gold Panning:

This method, which involves the use of a pan, is the oldest and simplest way to extract gold from a placer deposit. In this method, mined ore is placed in a large pan (made either of plastic or metal) and poured with a liberal amount of water; it is then agitated. The gold particles, having higher density than the other materials (examples, mud, sand and gravel; also, gold is about nineteen times heavier than water), settle to the bottom of the pan, while the lighter materials are washed over the side.

Sluice Box:

This method uses the same principle as that in gold panning, only on a larger scale. In this method, a short sluice box is used. The box is constructed with barriers along its bottom, so that the gold particles are trapped as all materials are washed by water. The sluice box method is best suited for excavation in which certain implements, such as shovels, are used to feed ore into the box.

Trommel:

This method involves the use of a screened cylinder to separate materials by size (trommel is Dutch word for "drum"). A trommel specifically consists of a rotating metal tube that is slightly tilted, with a screen at the discharge end. Attached to the inside part of the metal tube are lifter bars. Ore is fed into the trommel through its elevated end. Pressurized water is supplied to the tube and the screen sections. Valuable minerals from the ore are separated by the combination of water and mechanical action. The small pieces of ore bearing the valuable minerals pass through the screen and are concentrated further in sluices. The larger ones (those that do not pass through the screen) are moved to a waste stack using a conveyor.

Today, placer mining goes on in many parts of the world as a source of gems and industrial metals and minerals. This is true in countries like Sri Lanka and Myanmar. Placer mining for placer gold continues in British Columbia, the Yukon, and especially in Alaska.