Saturday, November 25, 2006

The Price of Gold Today

The price of gold fluctuates on a daily basis. The spot price is the price determined on the open market and a procedure, originally started in London in 1919, gives a twice a day benchmark price to the gold industry.

Among its many uses and values, gold was once used to back currency in most of the western countries. This is no longer the case as banks and governments found it difficult to manipulate the currency when it was so stable. Switzerland is one of the few countries that actually backs its currency with gold these days. Interestingly enough the Swiss franc is one of the most stable of currencies.

However, as the value of most currencies are not backed by anything substantial except perhaps faith, it tends to fluctuate and in times when there is a downturn, people then look for a more safer way to protect their assets, with gold being one of the most popular.

Gold is measured both by troy ounces and by grams. The measurement of gold is by karat with 24 karat being pure gold and lesser karat figures indicating that the gold have been alloyed with other metals of varying amounts.

Gold can be purchased in bullion form and this is usually as bars of gold or gold coins. Gold coins have become very popular over recent years due to the ease with which they can be purchased and the great variety now produced by the mints of the world. It is additionally, not just an asset or investment activity, but can be an interesting hobby as well.

Probably the most asked question is, when should one buy gold? When there is a drop in the currency market gold tends to swing in the opposite direction and people, having more faith in a sold metal rather than a piece of paper, tend to buy up gold. Of course this is when the price is moving upward, so they then pay a higher price for their concern.

In fact the best time to buy gold is right now, whatever the price. If one is buying for the long term and intends to keep some assets in gold then the daily price is immaterial. Over the long term gold has show to increase in value, especially against the dollar and, whereas inflation means you need more dollars to purchase the same as you did 10 or 20 years ago, one ounce of solid gold will purchase exactly the same now as it did all that long ago.

The price of gold may change depending on the value of the currency used to purchase the gold. But the value of gold does not change. Gold is Gold is Gold and the price of gold today is only the price of the day, not the value of the gold.

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