Gold is one of the most popular precious metal for jewelry and investment.http://www.goldcalculator.com/index_files/page0032.htm. The price of gold increases in a poor economy, making gold a solid investment for any investor.http://www.freegoldtips.com/free_gold_tips.html There are a variety of ways to invest in gold.

According to recorded history, over 80,000 tons of gold has been extracted from the earth's surface in the past 50 years, and more than 160,000 tons has been mined as of year 2009.http://ngm.nationalgeographic.com/2009/01/gold/larmer- text/3.

In 2007 China became the largest producer of gold, leaving South Africa as the second largest gold producer.http://www.marketwatch.com/story/china-now-worlds- largest-gold-producer-foreign-miners-at door Prior to 2007, South Africa was the world's number one producer of gold. Since 1880, over 60% of all the gold in the commodity market came from South Africa, but in 2007, there was a decline in production due to the increasing difficulty encountered in gold extraction and the problems faced in the unstable economy. As of 2009, India is the world’s largest gold consumer of gold. According to nakedcapitalism.com, Indians purchase over 20 percent of the world's gold. http://www.nakedcapitalism.com/2008/03/indias-love-affair-with-gold-tarnishing.html. Other countries that produce gold includeRussia, United States, Australia and Peru.

When buying gold for investment, the investor needs to understand the basic terms used in the gold market. A mass of gold is called gold bullion. Gold bullion can be in different forms, such as bars and coins. Examples of gold bullion coins include; American Eagle gold bullion coinshttp://www.usmint.gov/mint_programs/american_eagles/index.cfm?Action=american_eagle_gold and American Buffalo gold bullion coins.http://www.usmint.gov/mint_programs/buffalo24k/index.cfm?flash=no&action=amBuffBull

The degree of purity of refined gold, native gold and ingots of unrefined gold is defined in terms of the amount of gold they contain.
Fineness is the word used to define gold content in parts per thousand.
Karat is the term used to specify the proportion of solid gold in an alloy, which is based on a total of 24 parts. Thus jewelry of 14 karat (14K) gold is actually composed of 14 parts of gold and 10parts alloy or any other metal. *Pure gold is 24karats. Gold is measured in troy ounces.

1. One troy ounce is equal to 31.104 grams.
2. One troy ounce is equal to 20 troy pennyweights.
3. One pennyweight (dwt.) is equal to 1.555 grams. The pennyweight (dwt.) is the unit of weight used in the jewelry industry.http://pubs.usgs.gov/gip/prospect1/goldgip.html

Before you dive into the streams of gold investment, you have to decide on what kind of gold investment you really want to be involved in. The various methods of investing in gold include:

1. Gold ETFs (gold exchange traded funds): Gold exchange traded fund is a form of asset traded as shares in the stock market just like stocks and bonds. Therefore gold exchange traded fund is an ETF that functions with the price of gold. So when you purchase a share of gold ETF, you have ownership to a particular amount of gold. You would also be charged an annual storage fee and a small commission if you buy gold ETFshttp://moneycentral.msn.com/content/invest/extra/P143352.asp. Gold ETFs are sold in various stock exchanges like the New York stock exchangehttp://www.nyse.com/

1. Gold mutual funds: A mutual fund is a type of investment scheme that gathers money from many investors and invests it in bonds, stocks and other investment securitieshttp://www.sec.gov/answers/mutfund.htm. It is managed by professional fund managers. A gold mutual fund is a mutual fund that invests in gold. Gold mutual fund is a good way to buy gold for investment because you are not just buying gold but also buying other valuable stocks and bonds.
2. Gold bullion: Gold bullion is gold in bulk. Gold bullion is usually in form of coins or bars, known as bullion coins and bullion bars. Gold bullion is valued by its purity and mass. http://www.freegoldtips.com/Gold_Bullion.html/ref. Examples of gold bullion coins include
   1. Canadian Maple Leaf gold bullion coins
   2. American Buffalo gold bullion coins
   3. South African Krugerrand gold bullion coins
   4. American Eagle gold bullion coins
   5. Austrian Philharmonic gold bullion coins

When buying gold bullion bars it is better to buy popular bullion gold bars produced by Credit Suisse because of their reputation and authenticity.<ref>http://www.goldwhy.com/one-ounce-gold-bars.html

1. Gold futures: This is another method of buying gold for investment. Gold futures gives you the opportunity to invest in gold without spending a lot of money, but it also risky because if things go wrong you can lose all your money. http://www.goldalert.com/buy-gold.php

There are a variety of things to consider prior to buying gold for investment. These include:

1. Deciding how much to invest—How much an investor intends to spend on gold strictly depends on him/her. A smart move would be to get adequate knowledge of the price of gold. Since the value of gold is historically volatile and unstable, anyone considering buying gold for investment should be aware that the price of gold varies as the situation of the economy changes because during periods of geopolitical tension the price of gold riseshttp://www.usnews.com/money/personal-finance/articles/2007/12/12/going-for-the-gold.html . Gold bars are often more expensive than other physical forms of investing in gold unlike the gold coins that are easily affordable. On the internet and financial newspapers you’ll come across loads of advices on how much to invest, but most experts like AboutGoldCoins recommends about 15 to 25% of an investor's investment portfoliohttp://www.aboutgoldcoins.info/buy-gold-coins.html
2. Choosing your gold investment—An investor can choose to buy gold for investment through one or more of the ways described in this page. The gold exchange traded fund, gold mutual funds and the gold futures have advantage over the physical gold(gold bullion coins and bars) in that they save the buyer the inconvenience of storing physical gold coins and bars.http://www.goldalert.com/buy-gold.php

Buying gold bullion bars and coins for investment:

• When buying gold bullion bars and coins, make sure you know the spot price of the particular gold bullion you want to buy. The spot price is the price that is given for instant payment and delivery and this price changes.http://www.freegoldtips.com/Gold_Bullion.html You can get price updates on the internet from websites like goldfixing.com.

Some tips for buying gold bullion are:

1. Buy gold bullion coins that are well packaged. When a gold bullion coin is marked or destroyed it loses its market value.http://www.freegoldtips.com/Gold_Bullion.html
2. Buy gold bars from reputable dealers or the country's mint. But be careful of fraudsters and do thorough research on your own or better still, ask other investors for contacts and referrals to reputable dealers, websites and companies that you can get a great offer from.

Buying gold exchange traded fund

• Just like other bonds and stocks, you can buy gold ETFs on the stock market with the help of a broker. For more information on choosing gold ETF visit the ETF center of MarketWatch.com.

Buying gold mutual fund

• E*TRADE financial corporation (US) is one of the financial institutions you can buy gold mutual funds. You can check out their website for more information.

Buying gold futures

• To purchase gold futures you'll need to sign up a future contract with a full service broker. Gold futures contracts are traded through the eCBOT platform of the CME Grouphttp://www.goldalert.com/buy-gold.php.