For thousands of years gold and money were directly linked, then they weren't.

Britain abandoned the gold standard in 1931, meaning you could no longer exchange your paper money for physical gold.

But it also meant that you could make (or lose) money from buying gold for the first time - with the price of the metal in pounds changing daily.

Fans of gold as a way to store (and grow) wealth point out that the supply of the metal is limited, so it's not something governments can mess about with, as well as the fact it has value globally and has been used as a currency for thousands of years.

So if you want to invest some of your money in gold, how do you go about it?

Well, there are three main ways.

How do you invest in gold?

1. Buying physical gold bars and gold coins

Gold bars, gold sovereigns, dublooms, pieces of eight or even sequins (originally a type of gold coin) can be bought and stored.

In fact, there are even gold vending machines - where you put in a card or cash, and get a lump of gold.

There are two main benefits to this. Firstly, if you're buying British gold coins (yes, the Royal Mint do still strike gold sovereigns ) then, thanks to a quirk of law, you avoid tax on any money you make when you sell them.

Secondly, you actually have the gold - meaning it's completely within you power and no other firm or company is needed.

Gold bars (ingots) and coins are the most common ways to buy physical gold - with coins a bit more flexible when it comes to selling (you don't want to have to cut a bar in half if you can help it).

Some coins carry a premium, as they are rare, but most don't - with the South African Krugerrand the most common coin.

You will, however, pay a premium on the price of gold to buy physical versions of it, although the large dealers will deliver it to your house. At the time of writing, a 1 ounce coin costs roughly 3% more than the gold spot price for an ounce (£980 vs £950).

Big UK dealers include the Royal Mint (who buy and sell non-British coins and gold bars too), Chards and Baird .

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As far as storing it goes - most people keep it at home, generally in a safe, or in safety deposit boxes in a bank. However, if you are keeping it at home, you will need to tell your insurance provider about it to check you're covered.

When it comes time to sell, you will be hit by a premium again - this is how gold dealers make their money after all. Using a large dealer - like those mentioned above - is advised, but will likely cost you 4% of the value of the gold.

So were you to buy a single 1oz coin, then sell it back immediately it would currently cost you £68 - or 7% of the value if the coin.

These margins can be brought down though online searches for the best rates (or by flying to Hong Kong where there are some excellent deals), but be sure the people you are buying or selling from are legitimate before handing over any cash.

Then again, there's another way to buy gold at low margins.

2. Online bullion dealers

If you're not worried about actually having the gold in your hands, online dealers are a far cheaper way to buy gold.

Your gold is held in secure vaults, and can be easily bought and sold in whatever quantity you fancy.

The rate you get is also far closer to the current price.

For example, if you bought and sold an ounce of gold at an online dealer - rather than with a physical coin - you would lose £2 on your transaction rather than £68.

You can also transact fast - with almost instant buying and selling once you're signed up.

In fact, it's now possible to link you bullion to a payment card and not just hold gold, but actually spend it, in any amounts, anywhere that takes MasterCard.

However, there are downsides too.

First major dealers charge storage - including insurance. The cost is typically low - about 0.01% a month or 1% a year - but over the years that builds up. There's also a minimum charge with some companies that could hurt smaller holdings.

You also don't escape capital gains tax this way - although you need to make a profit well above £11,000 on what you sell before this kicks in.

If you're interested, the main players are BullionVault , GoldMoney , GoldCore and new app-based system Glint .

3. Gold tracking funds - the cheapest way to invest in gold

If what you care about is the price of gold, and aren't bothered about directly owning some of the shiny stuff yourself, you can invest in it through trackers.

These are bought and sold in a similar way to shares, can be held in an ISA, and many are even backed with actual gold.

ETFS Physical Gold (PHGP) is the largest gold tracker on the London Stock Exchange, but Source Physical Gold ETC (SGLD) is cheaper - with an annual management fee of 0.29% according to Hargreaves Lansdown .

That means it's less than a third of the price to hold compared to most online brokers.

However, trading shares - even when they stand for physical gold - incurs a broker fee too.

The good news is that this is only a few pounds, and that's frequently fixed no matter how big the transaction. You can compare dealing prices here .

So what's the best way to invest in gold?

It all depends on whether you want to have the gold yourself.

The cheapest way is through an exchange traded fund, it can even be kept in an ISA, but then the gold is never physically yours. You own a share of a gold company.

The next cheapest way is through an online dealer - you'll definitely own the gold, but won't have access to it unless you pay a fee to have it shipped to you. You then lose the advantage of being able to buy and sell it fractionally.

The Glint app offers another way again, holdings in gold - bought incredibly simply from your phone for 0.5% above the current market price - that you can spend anywhere on the planet the same way you spend money from your current account.

Physically holding the gold yourself means no fees for holding it (although it might push up your home insurance costs), and pure ownership with no other agency between you and the metal. But there's a higher risk of it being lost, destroyed or stolen and a far higher cost to buy and sell it.

So the question to ask yourself is, do you want access to the price or the metal itself?

But before you do anything, one word of warning.

"Investors need to understand investing in gold is by no means a one-way bet," said Danny Cox, a chartered financial planner at stock broker Hargreaves Lansdown .

"Gold is notoriously difficult to value, subject to seasonal demand, and unlike shares and bonds, it provides no income for investors. Price movements can be fickle and unpredictable.

"It can, however, be used as a hedge against calamity, but we have seen wider supply and demand considerations put pressure on the gold price up then down in the aftermath of the financial crisis."