The best form of gold for investment is determined by the type of investor and the purpose for which gold is held. Gold ETFs, along with physical gold, may be the best option for a long-term investor who wants to include gold in their portfolio.

Short-term speculators, on the other hand, will find Futures Contracts and CFDs far more suitable, especially because they can bet on price movements in either direction. That is not to say that long-term investors cannot benefit from these two. Long-term investors can use futures and CFDs for hedging purposes.

For example, if you believe gold prices will fall over the next three months, you can go short on gold using either of those instruments while maintaining your long-term investment. Everything is determined by your risk tolerance, investment horizon, and gold trading strategies.

For investment, physical gold and gold-related financial products each have advantages. Physical gold, like coins and bars, offers direct ownership and tangible security but requires secure storage and may involve higher transaction costs. Gold ETFs (Exchange-Traded Funds), on the other hand, represent gold without needing physical storage. They offer liquidity, low fees, and easy buying or selling via stock exchanges, making them ideal for those seeking flexibility. Gold stocks shares in gold mining companies can be more volatile but potentially yield higher returns than gold’s price itself. Sovereign gold bonds issued by governments provide interest income and are tax-efficient. For most investors, a diversified approach with gold ETFs for liquidity and physical gold or bonds for long-term holding might balance stability and growth potential.