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


Thursday, November 15, 2007

Gold Price Dropping

Sometimes you will see the gold price dropping. There has been a substantial rise and then, suddenly,it turns around and drops. Many people then frantically sell gold but in fact it is those that buy gold (from those selling of course) who benefit the most. They get the gold at a reduced price because, sure as eggs are eggs, the gold price will rise again.

Gold price has traditionally risen, in the long term, and with small dips occasionally, has enabled the astute to make a tidy profit here and there. Anyone who has purchased gold over the past 10 years and not sold it, will be sitting back congratulating themselves with a proverbial pat on the back and a somewhat healthier asset balance.

More importantly perhaps, the value of gold has not changed over the past 50 -100 years. How could this be? You ask. It is simple. The value of gold does not change. But the value of the currency you use to buy and sell gold does. An ounce of gold will still purchase the same goods now as it did fifty or one hundred years ago. But you need an awful lot more dollars to make the same purchase with currency.

Keeping one ounce of gold for 10 years say and the cost of one ounce of gold in dollars at the time of purchase will quickly show the disparity in the value. One ounce of gold 10 years ago was around 300 dollars per ounce. These days it is running at around 750 to 850 dollars an ounce. but whereas the purchasing power of 300dollars has reduced over 10 years, the purchasing power of an ounce of gold has remained stable, in fact increased slightly.

Examples of inflation and the drop in the US dollar over the years are demonstrated below:

A postage stamp in the 1950s cost 3 cents; today's cost is 41 cents - 1,266% inflation;
A gallon of 90 Octane full-service gasoline cost 18 cents before; today it is $3.05 for self-service - 1,870 % inflation;
A house in 1959 cost $14,100; today's median price is $213,000 - 1,400% inflation;
A dental crown used to cost $40; today it's $1,100 - 2,750% inflation;
An ice cream cone in 1950 cost 5 cents; today its $2.50 - 4,900% inflation;
Monthly government Medicare insurance premiums paid by seniors was $5.30 in 1970; its now $93.50 - 1,664% inflation; (and up 70% past 5 years)

However one ounce of gold continues to purchase the same regardless of inflation since it is not the cost if living that has risen but the value of the dollar than has dropped.

In this way it can be seen that it pays to retain at least some assets in gold, regardless of any day to day or week to week fluctuations. In fact when the price of gold drops slightly, that is a good time to increase ones holdings in gold by taking advantage of a temporary lower price.

So, even with the gold price dropping, to buy gold can still be seen as an astute and successful action!



Finding Gold

Finding gold is usually an activity reserved for mining companies and prospectors, but finding gold for us ordinary folk usually means we have to find out the best place to buy gold at a good price.

This is easier than it seems.

Many places sell gold. Usually in the form of gold coins or gold bars as well as jewelry. Gold coins are bars generally make the best buy. Jewelry is virtually never pure gold (except for some Asian manufactured jewelry such as rings) and has a high retail premium or mark up.

Some of the best places to buy gold are, dealers, mints auction sites, coin collecting and numismatics clubs. These places will usually offer the best deals and with a little browsing and some due diligence, some great bargains in gold can be had.

What sort of gold you buy will depend also on what sort of gold you would like to have. Some people specialize in collecting certain gold coins, such as Krugerrands, Gold Eagles, or Maple Leafs and Sovereigns.. Some specialize even more and collect particular types of one of those coins. Other like to collect gold bars. Some collect gold through exchange traded funds or a gold provider such as GoldMoney.com. Others just collect whatever gold they can lay their hands on and are not fussed about the type.

The important thing is to have some knowledge about gold, and how it is fabricated and presented, how much it is going to cost to acquire and how much you can afford to spend on a regular basis.

There is a wealth of information on this site specifically aimed at helping you to find out what the best buys are when it comes to gold and what to look for. How to ensure you are getting the real McCoy and how to ensure you do not pay more than you should.

If you have more money than you can throw a stick at, then acquiring gold is not a problem. You simply buy gold in large bars and have them stored for you by a bank. This would be done, of course, in conjunction with advice from your financial planners. The small buyer of gold can simply buy a few well chosen coins or small bars from a dealer or mint or scour the auction sites for a good deal.

Best of all, finding gold can be a fun experience and there is a great deal of satisfaction and pleasure to be had when you buy gold, and it is delivered into your hot little hands!



Wednesday, November 14, 2007

Properties of Gold

The properties of gold have always been a fascinating subject for man and gold seems to have had an innate attractiveness and allure for man throughout the ages hence the desire to buy gold and keep it either for investment or simply through a desire to have and hold gold.

Gold is a precious metal or chemical element. It has the symbol Au which comes from the Latin aurum which originally came from the ancient Latin word ausom or "yellow". This word compares to the ancient roman word, aurora or ausoso, The "morning glow, the Eastern country, the east". The word is derived from an even more ancient word. The Sanskrit word "hari" meaning yellow.

Apart from its attractiveness for man gold has some very useful properties making it extremely versatile for use as well as simply ownership.

Gold has an atomic number of 79. It is a soft metal, yellow in appearance and does not react to most chemicals, with the exception of chlorine, fluorine, aqua regia and cyanide. Gold will dissolve in mercury to form an amalgam (hence the use of gold in gold teeth) but does not react with it. Gold is the most malleable and ductile of metals which means one gram can be hammered or beaten out to cover a square meter or one ounce will cover 300 square feet and will then appear translucent. The transmitted light through the gold appears greenish blue, as gold strongly reflects yellow and red. It can also be drawn out to a wire thinner than a human hair.

This malleability makes it ideal for jewelry where very intricate and ornate shapes such as filigree can be created.

Gold does not corrode and as it is unaffected by air and is a good conductor of electricity, makes ideal electrical contacts. It is used extensively in electronic components, particularly circuit boards and computers, cell phones and similar products. It is highly reflective and has been used in Space Projects by NASA as well as in medial research.

Gold can even be eaten in minute amounts! Gold leaf is often used as a food decoration and it can also be found in alcoholic drinks such as Goldschl├Ąger, Gold Strike, and Goldwasser. Of course, like any precious metal, if taken to excess an individual can suffer from heavy metal poisoning.

Gold is one of the more useful metals as well as being considered one of the most decorative. It also holds its value against just about any currency you care to name and makes a great investment for the future for the person who wants to buy gold.

It could be said that the properties of gold include not just its physical characteristics but also its ability to attract such an enormous interest to itself!



Monday, November 12, 2007

Uses of Gold

The uses of gold are many and varied. So to buy gold for investment purposes is not the only use to which it is put.

Gold has a number of unique properties which make it ideal in industry and perhaps contributes to its value thereby.

Gold is resistant to corrosion, has excellent electrical conductivity, is ductile (which means it can be drawn out to a thin wire) and malleable (able to be flattened out extremely thin), reflects infra red and has excellent thermal conductivity properties.

It is used extensively therefore in a wide range of manufacturing such as in electronic products like computers, telephones, cellular phones and home appliances. Even wheelchairs make use of gold. Gold is used very much in electrical contacts and almost all circuit boards contain a quantity of gold in the form of smaller that the thickness of a hair wires and other components.

Golds reflective powers are used successfully in the space industry such as satellites and spacecrafts where it is used for protection against solar radiation. For example, to protect the onboard computers in the Galileo space probe from short circuiting as a result of heavy bombardment, NASA developed a Heavy Ion Counter (HIC). This counter contains silicon wafers with gold electrodes that detect the heavy ions as they penetrate the wafers. Use of the HIC allows NASA engineers to monitor the functioning of onboard computers and make adjustments when necessary.

It continues to be used in medicine due to being biologically inactive and is a vital tool in medical research.

This means that the demand for gold is ever increasing, not only for gold rings and other jewelry accessories but also for coins bars and industry.

This makes it an excellent hedge against inflation as well as recessions (a time when gold traditionally increases in value compared to the dollar). The result being that gold continues to be in demand and the value continues to rise.

These prolific uses of gold, therefore, contribute in no small way to the stead increase in the value of gold and are an extra boon for the gold investor who is keen to buy gold.



Gold Investment

Gold investment is very much in the news today and to buy gold as an investment is easy to do provided a few important factors are taken into account.

It might sound obvious but the first rule would be buy the cheapest gold you can. This means shopping around and a lot of browsing and comparing notes to find the best deals. There is a difference between dealers when it comes to coins and small bars and also take into account the shipping and handling charges which can also vary between dealers and mints.

Gold Bars, Krugerrands and sovereigns are perhaps the best buy with gold bars having the lowest percentage premium over the spot gold price. When comparing dealers and mints, compare the percentage over the premium and look at what is the bottom line. What is the total you would have to pay from each dealer for the same coin or bar delivered.

Buying regularly is another little secret to building up a healthy gold investment portfolio. Even if it is only a small amount each month it is surprising how quickly that small amount can become a substantial gold investment.

A good and thorough understanding of rare gold coins can also reap some spectacular rewards. Scouring the auctions and coin clubs can net one a good deal, particular if someone is in a tearing great rush to sell during a time of economic turmoil.

It is often said that one should buy low and sell high. But for the serious investor of gold who does not sell this is not the best way to go about it. In fact to continue to buy on a regular basis is more likely to conserve ones gold assets as the average price one pays for gold will even out over time.

If one wishes to trade in gold, then this is a different matter. It is more likely that one would speculate in stocks in gold companies or exchange traded funds and then different rules would likely apply. Such as, for example, understanding the dynamics of the gold market and its relationship to inflation, a bear or bull market in stocks, financial instability and so forth. Regular week to week or even day to day trading is subject to more variables and market forces and requires a different way of thinking, not for the novice or those of a conservative inclination.

For the saver, rather than the speculator, coins and bars are a more conservative way of saving and, when done on a regular basis, can reward the investor with a very nice and healthy gold investment.



Wednesday, November 07, 2007

Gold Information

Gold information is very important when it comes to buying gold. Knowledge is power and the more you understand and know about gold the more likely it is you will get a good deal when you buy gold. The more knowledgeable you are the more money you are likely to make and the more likely it is you will be able to increase your asset base. Even if you simply enjoy collecting gold coins and bars you can have a lot more fun collecting those elusive and wonderful gold coins you have been seeking for ages.

Information about gold includes:

Knowing just what gold is, what you can do with it and just how versatile it can be.
Knowing something about the gold price and its movements
Understanding the various types of gold available, such as gold coins, gold bars, medallions etc.
Knowing where to buy gold, and
Importantly, knowing how much to pay for various gold items.

This website is a veritable gold mine of information and an excellent place to start,. There are many hundreds of articles on a multitude of aspects about gold from selling scrap gold all the way through to strange shaped gold coins to investing in gold exchange traded funds and IRAs.

Getting the basics on what gold is, is an important start. What IS gold? What can you do with it? How much is it really worth? Which gold coins are the best to buy? When should you sell gold. Why buy gold? What about gold treasure and how to invest in gold IRAs are just a few of the questions you can get answered just from this website alone.

It is a good idea to scour the net for information about gold also. Find out what prices there are for different gold products. Do lots of browsing and, basically, look at everything to do with gold.

The more knowledge you have the more you will be empowered in your handling of gold.

Knowledge is indeed power and gold information can be worth its weight in gold!



Best Way to Buy Gold

What is the best way to buy gold I am often asked. There is no big secret to this but probably the best way to buy gold is summed up in the word consistency. This means that, regardless of the price of gold at any one time, one continues to buy gold on a regular basis month after month, week after week, regardless of the price.

The cost of your gold is spread out evenly over time this way and, if the price of gold dropped say, at one time for a period, it would not matter particularly as eventually it will rise again and the average value of your gold holdings will remain the same, if not increase. Share investors understand this principle of consistency in buying regular packets of shares and the value and cost of the shares tends to even out.

One aspect that is not understood well is the idea that the value of gold can be too high. In actuality the value of gold remains fairly steady and it is the decreasing value of the currency that gives the illusion of gold being more expensive. The currency is not linked to gold and rides a roller coaster of its own when it comes to inflation and recession. The chart shown gives some understanding of the inflation linked gold price.

So the consistent buying of gold on a regular basis month after month, week after week, will even out the peaks and troughs and the asset value would not be affected by inflation.

In short, saving ones assets in gold is a far better deal than sticking money in the bank.

With gold then, it becomes a matter of choosing what gold one buys, keeping in mind the mark up or premium placed on various gold products.

Some gold coins for example, especially newly minted ones, attract a premium, such as the cost of packaging, shipping, insurance etc, which can be quite costly. Small gold bars can suffer the same costs also.

As in many other products, the more gold you buy in one purchase the smaller the premium you pay. The mark up and costs associated with buying gold in the form of a one kilo bar are far less, per ounce, than buying one ounce bars. Of course you have to pay the price for one kilo of gold and not very many people can afford to do so. How much gold you can buy at one time will depend on how much you wish to salt away for a rainy day on a consistent basis.

There are many places one can buy gold coins and small bars without incurring some of the heavy mark up you have with newly minted gold coins and bars. There is no investment opportunity in buying gold coins in a wooden box which one has had to pay for so provided the coins are sealed in their original plastic containers, a presentation box, although it 'looks ' nice, is really superfluous to an investor.

Coin dealers selling proof coins, auctions and private sales are good look places to look. Join or belong to a coin club or association is a worth while activity since many club members sell coins to each other and there is usually plenty to buy. Scouring the auctions, such as eBay and the like can be time well spent. Spending some time studying the various gold coins and the value is time well spent also. Understanding the values of rare gold coins can net you some good deals also

Basically, applying just a bit of due diligence and some consistency in buying gold coins and bars on a regular basis is really the best way to buy gold!



Saturday, November 03, 2007

Gold Price and the US Dollar

When we talk about how to buy gold, some people might be wondering what is happening with the gold price and the US dollar.

The gold price is rising steadily and has now hit the 800 dollars an ounce mark as predicted by various gold analysts.

This is due in part, of course, to the depreciating dollar but also the appreciation of gold as a safety net and possible future investment.

Put simply the value of the dollar is decreasing. Removing gold as a backing for the US dollar was thought to be an excellent move by the Federal reserve in the early seventies, as it gave them more manipulative control over the dollar. However this is now coming back to bite them as the excessive printing of more money to shore up the dwindling value only serves to decrease the value even further. The US government may not mind too much as it means they can pay their debts with a depreciated dollar from the time those debts were incurred. In addition exporters, farmers and the like, are enjoying the bonus that comes with a depressed dollar against foreign currency

But what about the person in the street? The drop in dollar value means less value for the salary or wage earner with higher prices and less savings. It means higher costs for imported goods and less value for the dollar.

This is where gold comes in. while the dollar is busy ferreting its way to the bowls of the earth, gold is soaring to spectacular heights.

Actually, the value of gold has never really changed much. In terms of purchase you can still buy the same value of goods with an ounce of gold now as you could 50 years ago, although the perceived value of gold in dollar terms has risen tremendously. It still is an ounce of gold. 50 years ago one could purchase a man's suit for an ounce of gold. These days it would take somewhat less than an ounce of gold to purchase the same men's suit. Gold in fact has increased in purchasing power over the years and looks set to continue.

It seems that, by investing in gold such as coins, bars and even exchange traded funds, one can improve ones asset base or at the very least, retain ones value for future use.
So when it comes down to how to buy gold and the gold price vs the US dollar is concerned, gold, it seems, is winning hands down.