Buy Gold and Silver How to Buy Gold How to Buy Silver Gold Commentary


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.



Sunday, May 28, 2006

How to Buy Gold

If you do not buy gold or gold jewelery very often it is important that you know how to buy gold to ensure you get exactly what you want and at a good price as well.

So it is important that you understand the key factors when it comes to buying gold and gold jewelry.

When buying gold jewelry these key factors are:

  • Karatage, or how much gold is there in a gold piece?
  • Gram weight. Simply how much does the piece weigh?
  • Design. Is it the right design for you?
  • Craftsmanship. Is it well constructed and tastefully made?
  • Price and purchase. How much is it and is it good value for the price?
Karatage, sometimes called karats is the amount of gold contained within a gold piece. This is how it is measured. Gold is very often mixed with other metals, such as silver, nickel, zinc etc, to help it last longer and be more durable. Gold is a very soft metal and pure gold can be distorted and wear away quickly especially if it is used a lot.

10k gold is only 41.7 percent gold. 18k is 75 percent gold and 24k gold is considered pure gold although it is measured as 99.99 percent gold since it is considered impossible to obtain pure gold.

All gold pieces should have the Karatage stamped on it somewhere.

Gram weight is the next important key item. How much does the gold item weigh? The higher the gram weight the more gold it contains, keeping in mind the Karatage, and the more expensive it will be. The more value it will have as well. This can be easily noticed with gold bracelets.

You might see two gold bracelets with the same Karatage. Say 18k. but one is chunky and the other is wafer thin. The gram weight of the chunky is going to be much more than the wafer thin bracelet although the proportion of gold to other metal remains the same, there will simply be more of it.

The design is next in line when considering buying gold in jewelry form. An antique design piece of gold jewelery is likely to be worth more than a new piece as it has an additional value of age, uniqueness and possibly rarity. Decorative gold tends to cost more as there has been more work put into it.

The Craftsmanship and quality of the gold is very important. Most of today’s gold jewelery is manufactured on machines but hand made pieces are still available and will cost proportionally more as a result. The quality of manufacture will show in how the gold is fabricated, including any fastenings and setting for gems etc. A quality gold piece will last for years with good and careful handling.

Price plays an important part and understanding the above will help you to be able to work out a good price for a gold jewelery piece. Many discounts are offered by dealers and jewelers so it pays to be wary and really find out what is being offered. Remember that the dealer is still making a profit on discounted items so how much are they really worth?

It is probably a good idea to have in mind what you want before you start looking. Get a good clear picture in your mind of the karat, weight, design and craftsmanship and design you want within your budget and then go seeking that.

The golden rule of course is to do your due diligence and know what you want and you will then really know 'how to buy gold'!



Monday, May 22, 2006

Gold Ingots

Gold ingots are basically gold bars that are cast from a mould rather than stamped like a gold coin.

They tend to be rougher and thicker than stamped bars, often called biscuits, but still come in all weights from one gram up to a "London Good Delivery Bar" which is 12.5 kilograms or 400 ounces troy weight.

The London Good delivery bars are really only used for major international markets and are purchased by banks, large companies and business that wish to store assets this way.

They are usually stored in Bank Vaults around the world and not moved around much although the ownership of them may be. As they are now worth around 200,000 to 300,000 US dollars, depending on the price of gold, they are not used very much by small investors who generally will buy and sell smaller bars within their price range.

The cost of manufacturing the smaller 1,2.5, 5 and 10 gram bars does not make them very good investments as a premium has to be paid and it would take some time, even with the current increases in gold value, to appreciate any profit from their purchase.

Probably the half kilo and one kilo bars or ingots are the easiest to buy for investors. The premium is much less than for the smaller bars but they are within the price range of most investors. Running from around 10,000USD for the half kilo and 20,000 USD for the one kilo at the time of writing.

Even one, five and 10 ounce bars make quite good investments.

Probably one of the best investments are gold coins, not just for the gold but also for the coin collection value which, in rare coins, can equal if not surpass the value of the gold in the coin.

Either way, buying gold ingots or bars or coins is a worthwhile activity that, over time, can quite likely result in a satisfactory investment as well as being a fun activity!



Saturday, May 13, 2006

Gold

Gold has been consistently rising in value for the past year or so now and there seems little likelihood that this trend will diminish.

A number of reasons have been put forward for this sudden and dramatic rise. War, economic uncertainty, China and even India have all be assigned responsibility at one time or another. Even inflation and national debt, both which currently run extraordinarily high in the western countries, have had the finger pointed at them.

Regardless of the possible reasons for the steady rise in value of gold, it can be said with some certainty that gold is considered a good investment and a safe haven for one’s assets.

What gold should one buy and keep?

There are many types of gold one can buy.

One can invest in Gold Exchange Traded Funds (EFTs). EFTs are simply a certificate that represents a portion of gold held in a bank vault. One purchases a specific amount of gold and receives a certificate to establish one’s holding. As the price of the gold in the vault changes, the value of one’s holding changes correspondingly. The advantages of this system are that one can buy gold at virtually spot price. The disadvantage is that it is considered an investment and there are tax considerations such as profit taking and capital gains to consider.

One can buy Gold Stocks. Investing in the shares of a gold mining company can be profitable but the value of the shares depends on many factors, not just the value of gold. A mining company is projecting to produce a certain amount of gold over the life of the mine and this is what give it its value. If the mine falls short then the share value can fall short. Even an adverse movement in the currency exchange rate of the country in which the mine is situate can cause a drop in the value of the gold bring produced by the mine.

Gold Futures is another method of buying gold. Usually this is the arena of the trader rather than the investor, it is still a possibility but one fraught with danger as it is very easy to lose a lot of money trading in gold futures. This area is best left to the experts.

Buying Gold Bullion, such as gold coins or gold bars, has some advantages in that coins generally are legal tender and not taxed. They are easy to carry and store and also easy to dispose of or sell. Gold bars also have some advantages. Easy to carry, store and sell also. Sometimes there may be tax considerations with gold bars depending on the purpose declared for their purchase. When buying gold bullion also consider that there is an increase in price, above the spot gold price, as the dealer or supplier needs to pay for their expenses etc. However with the steady increase in value this may not be such a problem.

Gold has traditionally always been a good buy in any market and better in an uncertain market.

Probably a regular purchase of gold on a consistent basis might be a wise move, then the price one pays will tend to level out and with the current trend you will surely do well with your gold.



Sunday, May 07, 2006

Swiss Gold Bars

Swiss gold bars are a very popular way of accumulating gold, particularly with the rising trend of the gold price.

Gold Bullion Bars
There are two types of gold bars, The cast and the minted. The Cast is manufactured by pouring liquid gold into a mould to provide the finished form. These types of bars are called ingots. Most of the larger bars traded between banks and institutions use ingots. They are usually around 400 ounces each and so quite heavy.

The United States Bullion Depository or Fort Knox, as it is called in exciting adventure movies, is an example of a fortified vault building used to store a large portion of United States gold reserves, in the form of gold ingots.

Minted gold bars are made by cutting gold blanks from flat sheets of solid gold.

A newer form of gold, called ChipGold consists of a small ingot (1-20 grams) in a sealed and certified package the size of a credit card.

Which brings us to the two basic Swiss gold bars. The Credit Suisse one ounce bar and the "Gold Dream" PAMP produced by the Produits Artistiques de Métaux Précieux gold refinery in Switzerland.

Credit Suisse
The Credit Suisse one once bar is one of the most popular and are easy to carry and store during travel and are easy to convert into cash almost anywhere in the world. They are fully back by the Credit Suisse Bank of Switzerland. Each gold bar is of 24 karat gold purity and has the exact purity and weight stamped on each gold bar, then sealed for your safety and security.

"Gold Dream" PAMP
The distinctive “Gold Dream" PAMP Suisse trademark is manufactured by the Produits Artistiques de Métaux Précieux a gold refinery based at Castel Saint Pietro, in Switzerland. Originally established in 1977, today it is one of the world’s premier gold refiners and a brand recognized worldwide as a guarantee of excellence and sound provenance.

The "Gold Dream" PAMP is Accredited by the Swiss Federal Bureau and PAMP Swiss gold bars begin at the assay facilities supervised by sworn assayers accredited by the Swiss Federal Bureau for the control of precious metals.

All "Gold Dream" PAMP bars are well accepted by dealers and traders around the world and these are also fully backed by the Swiss National Bank and the London Bullion Market Association.

Swiss Gold Bars
Each of the Credit Suisse and the "Gold Dream" PAMP bars are Sealed, Registered and Numbered in a protective holder along with their official "Assay Certificate" guaranteeing the fineness of 99.99% pure gold and the one troy ounce content.

The bars do not have a high premium and can be afforded by most collectors and investors. They are easy to transport and store and, in times of need, easy to sell anywhere in the world.

Buying Swiss gold bars is an excellent way to provide for the future and it is not difficult to accumulate a respectable amount of gold this way over time.

Anyone who bought one or more Swiss gold bars a year or so ago will be extremely happy now since the price of gold has risen considerably and looks like to continue its rise into the distant future.