The current turmoil in the world’s stockmarkets has prompted a rush for safe havens where investors can shelter from the financial storms.

One favourite haven is gold, which has been much in demand in recent times. The bullion price has been pushed over $1,000 a troy ounce in the past year as investors have switched their money out of shares.

But how do you gain exposure to the precious metal? Our guide runs through the options.

Buy physical gold

This is the approach favoured by latter-day Goldfingers, who like the idea of taking delivery of several bullion bars. But you would need a large wallet to do this. Adrian Ash, of BullionVault, which acts as a market maker in gold, and stores it for clients, says a standard 400 troy ounce bar, weighing 27lbs, would cost about £265,000. A 1kg bar would set you back about £21,000, though customers can own fractions of a bar, right down to a 1g fraction, which would cost about £21. Although purchasers own the physical metal they usually have it stored for them in the company’s vaults.

Use exchange traded funds (ETFs)

ETFs are a good option for those who want to track the gold price but don’t want the bother of having to arrange storage for the precious metal.

A gold ETF is linked to the value of gold and operates like a tracker fund, replicating the ups and downs of the gold price. However an ETF, unlike a tracker, is a share and can therefore be traded at any time when the market is open. Investors have to pay broker’s commission when they buy and sell, and there is a modest annual charge, typically of about 0.5 per cent. However there will be no stamp duty and no initial charge.

Go for gold shares

If you are prepared to move up the risk scale, you could buy shares in gold mining companies. With gold shares, you tend to experience either feast or famine. This is because of the structure of mining companies, which usually have a high proportion of fixed costs. This means that, above a certain level, any rise in the gold price largely feeds through to the bottom line and gives a geared boost to the share price. But if the gold price falls below the break-even point dictated by fixed costs, the share price will drop equally sharply.

Try gold funds

Those who don’t want to own individual shares but like the idea of gaining exposure to gold mining companies can adopt the slightly less risky strategy of buying gold funds. These funds pool investors’ money and invest it in a portfolio of gold mining companies. Although not quite as volatile as individual shares, gold mining funds can provide investors with a pretty turbulent ride. For example BlackRock World Mining Trust has multiplied investors’ money more than fivefold over the past ten years, but in the past 12 months it has lost more than 40 per cent of its value.

A word of warning

As the above example demonstrates, investments linked to gold are not necessarily all that steady. Despite its reputation as a safe haven, gold bullion is itself quite a volatile commodity. In the past 12 months its price per troy ounce has soared to more than $1,000 and plummeted as low as $681.

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Five websites

BullionVault

World Gold Council

Gold Bulletin

London Gold Exchange

Baird & Co