Gold for hedging is available in many forms. Even jewelry is a hedge though not the best because you are paying for workmanship whose cost will never be recovered. Gold coins and bars are the most popular and useful as a hedge. Many nations issue gold coins in different weights of gold for your convenience. Coins are the most practical. The smaller the unit the more it is able to be used in the art of hedging and if need be in selling, should this become necessary. Smaller bars of gold are also obtainable.

Buying gold is actually a rather simple process. Gold can be purchased online, with most of the dealers being reputable. The weight of the piece will be listed and you need to determine the percentage in troy ounces of gold the piece is. A little math will be necessary. Keep in mind that there is a commission involved and this will be added to the cost.

Gold has fallen off its highs but will soon continue its meteoric rise to at least $2,000 per troy ounce and this is a good time to purchase gold. Consider where you want your gold stored before making the decision on how to buy gold. It is preferable to have the gold in your physical possession.  Of course if you simply want to profit from a rising gold price just buy the best gold ETF (i.e. GLD). Buying equities in companies that produce gold will also not give you any physical gold. Purchasing physical gold and having it stored somewhere other than your home or safety deposit box will not help you however if economic and social conditions deteriorate making it impossible to get your hands on the gold.

In the past couple of years during the recession, we have seen the price of gold skyrocket as investors hedge against a weakened currency.  Therefore, the question is with gold price rising, should buy it in hopes that it will go higher?  Not according to Warren Buffett, billionaire investor and CEO of Berkshire Hathaway.

According to Warren Buffett’s view on gold, there’s no intrinsic value in the material.  It has no use.  People dig it out of the ground and then melt it only to put it back into the ground and hire more people to guard it.  If Martians were to visit us today, they would think that Earthlings were pretty weird.

When you put it like that, it does seem silly that people would invest in gold of its lack of usefulness.  It just needed someone like Buffett’s investment savvy to point it out.  So how does one hedge against a weak dollar and inflation?  The thing about Buffett is that he does not look at the short term but thinks way ahead for his long term stock picks.  His stock picks are ones in which are fairly priced, have intrinsic value, have margin of safety and have a business moat that keeps away the competition.  Does that sound like it’s too much to ask?  Not in this recession where some companies are attractively priced and everyone is chasing gold and other commodities.  So be the contrarian investor and buy what everyone else is selling.