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Monday, May 29, 2006

What Gold to Buy

What gold to buy is a question often asked. There is such a wide choice of gold available in today's market place it can be difficult to decide which to buy.

Gold bullion in the form of gold coins and gold bars, ingots, Exchange Traded Funds, gold nuggets (those found in river beads and directly on the ground), gold jewelry and others.

What gold to buy will depend very much on your reasons for buying gold as well as your budget.

If you are buying gold purely for decorative purposes or because you like specific gold jewelry or gold coins then of course that would be the way to go. Investment is not an issue in this case so only your budget will dictate how much gold to get in the form of jewelry or coins. One is buying for beauty and aesthetic reasons in this case.

There are many beautiful gold coins to collect and it can be rather fun to collect a specific set of gold coins over a period of time. Proof coins are often the best coins to collect and by slowly building up a collection one can have something impressive to show off to friends.

If you are buying gold more for investment purposes then the price you are paying for the gold becomes important. Small coins are bars are generally not worthwhile as the mark up of premium you pay will be as much as, if not more than, the value of the gold. A minimum of one ounce up to one kilo of gold is better as the amount you pay over the spot value of gold will be much less and you will recoup your investment much quicker as a result.

This is why Exchange Traded Funds (ETFs) are so popular. You generally only pay a small amount over the spot price (the brokers fee basically) and you then hold a certificate representing the amount of gold held for you in a bank vault. One of the issues with ETFs is the tax payable on the gains made. ETFs are considered more of an investment than coins or jewelry and so taxable.

For those who are keen to actually hold the gold in their hands then gold bullion in the form of bars is probably more appropriate.

What gold to buy is important and whatever form of gold you prefer and for whatever reason, you are likely to be happy to increase your assets and put your value in something more substantial than paper money.



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