Thursday, February 07, 2008

Buy Gold

Why buy gold I hear some people ask. Gold is transitory and the price will always go down again!

In fact gold is not transitory. It has been around and used by man for thousands of years as decoration, jewelry and also, importantly, as a medium of exchange and preserving assets. It may drop temporarily but it always goes up again and is now worth more dollars than ever before.

Why Buy Gold
Why buy gold indeed! Nations and governments come and go. Currencies come and go. Economic conditions come and go. Inflation and recessions all come and go. Various bartering systems come and go. Stocks and shares and the ancillaries to those, futures etc, all come and go. But gold lives on and persists throughout the centuries and continues to be a stable resource for man.

Additionally gold does not tarnish, gold is welcome anywhere in the world. You can buy gold and sell it. Keeping assets in the bank means one gets a paltry interest rate (if that) which is generally eaten up by bank charges and inflation as each year the dollar is worth less than the year before. But gold. Ah! Gold does not hit you with bank charges and is not subject to inflation. Gold does not wear out and is not subject (mostly) to taxes. No. Gold is a stable asset that keeps its purchasing power.

In fact, regardless of the current economic situation, gold remains ... as good as gold!

So the time to buy gold is always now, regardless of when now is. The time to sell gold is ... never! And as to how much gold to buy? Well, as much as you can possibly lay your hands on!

Gold Price
The gold price fluctuates daily, even hourly. The live gold price is dependent on market forces, upon the economic conditions and peoples perception of what is happening economically and how the economy affects them. When the economy is unstable, people look for alternatives such as precious metals like gold and silver. The price of gold moves up and down with these apprehensions. The current price of gold to day reflects peoples moods and expectations. Since the economy has been unstable for so long and there is no likely hood of stability any time soon, more and more people are turning to gold.

Gold is undervalued even now. It takes many more dollars to buy an ounce of gold now than it did 30 years ago although you can still by the same products now as you did years ago. Gold has not changed. Only the purchasing power of the dollar which has gone down over 95 percent since 1910. Yet an ounce of gold will still buy now what it did in 1910. That tells you that you have much more chance keeping your assets if you buy gold than by sticking your money in the bank.

In the short term gold prices may change by the minute. But in the long term the price of gold is on a steady uptrend and looks set to continue as more dollars are printed and the purchasing power of becomes less and less.

Gold, in short, is a safe haven for assets.

A Short History of Gold
The historical gold price chart over the past few years shows that gold has been on a long term upward trend. There are peaks and troughs and, of course, who can forget the major spike in gold in 1980 when it hit the high 800s. But over the past 30 year gold price history, the trend has been essentially up and looks like continuing as the value of the currency it is set to continues to diminish in value..

The value of the gold, of course is not changing. One can still buy the same value of goods and services with one ounce of gold as one could 30 years ago. But the value of the dollar has plummeted and it takes a lot more dollars to by those same goods and services than it did 30 years ago. The gold has not changed. One ounce of gold is still one ounce of gold. But the dollar has changed and the price of gold reflects that.

Even the five year and one year gold history demonstrates that.

Buy Gold Coins
Some of the best places to buy gold coins are of course gold mints, gold dealers, gold shops and eBay. From these one buys gold retail and one can also buy gold wholesale. The main trick when buying gold is to keep the premium over the spot price of gold to a minimum. This is difficult with gold coins as the manufacturing costs are high and the mint and dealer want their profits.

The advantages with buying gold coins is that they are easy to buy, store and transport. Also to sell. You can sell gold coins anywhere in the world. Gold coins are easier to sell than bars. Dealers who buy bars will want to assay the bar fist and this may require sending the bar off, if the dealer is online, which can be a bit of a security risk.

The disadvantage, of course, is the price you pay for gold coins. The premium is higher than bars and can be up to double the price of gold for small coins such as the one tenth ounce for example. This means it is going to take a long time to recoup the value of the gold.

What you do will depend largely on the reason why you buy gold coins. It may be you enjoy just collecting certain types of gold coins, or for convenience if you travel a lot and need to be able to convert gold into money quickly.


Buy Gold Bullion
Out of all the ways to buy gold, the best buy is gold bullion. You can buy gold online either as gold coins or gold bars or even share in actual gold pooled by buying gold from GoldMoney.com, probably one of the cheapest and most secure ways to buy gold. You can also buy direct from Mints or dealers and all are equally valid ways of buying gold. Each method has its advantages and disadvantages..

To buy gold bullion in the form of coins and bars means you will have to pay a premium. How much this premium will be depends on the coins and bars you buy. The smaller the bar or coin in weight the higher the premium per ounce. The higher the bar or bigger the coin the less premium per ounce you pay. The premium itself is stable as the fabrication and other associated costs per coin or bar stay the same.

One way of not having to pay a heavy premium is to buy gold from goldmoney.com. Here the gold is stored in vaults and you can buy any amount of that gold. This system guarantees that you actually own gold, not shares in gold and your account details and balance will reflect that holding. One of the main advantages here is that the premium and fees are so incredibly low. Instead of paying vast sums over the spot price of gold you simply pay a small storage fee that amounts to less than one percent per year and a management fee of one quarter of one percent. This must make it the cheapest gold around. The system is fully transparent and you can see the bar count and audits on the website.

The only possible disadvantages are the costs associated with wire transfers in and out of the account in some cases. But that can be disadvantage with any online purchase of gold.

Buy Gold, Pure Gold
Bu gold, pure gold! That is the catch cry but which gold? Canadian Maple leaf, 24k American Gold Buffalo Coin, Krugerrands,, whatever gold coin you buy it should be 99.99 fine gold or 999.99 pure gold. Sometimes you will find coins that have a lesser quantity of gold in them. Some mints are now offering gold coins as 22 carat instead of the 24 carat. These may say they are 99.99 fine gold and of course the gold contained within the coin IS 99.99 fine gold. Any gold anywhere is 99.99 fine gold. But if it is alloyed or mixed with another or other metals then it is not a pure gold product. Look at the Karat. Is it 22 Karat gold? Or 24K gold? The 24K gold is pure gold. The 22k gold is not all gold. It may be advertised a pure fine gold and the gold itself would be but it is not all solid gold..

When you buy gold coins always, always check the karat and ensure it is 24 karat gold as well as being 99.99 percent gold.

Buy Gold Eagles
American Gold Eagle Coins are perhaps one of the most popular of the gold coins and are official legal tender in the USA.

They are considered a beautiful gold coin. the $20 Double-Eagle gold coins minted from 1907 to 1933 has the graceful Striding Liberty design inspired by the Augustus Saint-Gaudens on the obverse and the reverse of the coin displays a nest of American Eagles.

All American Eagles ere struck with 91.67% (22 Karat) fine gold and the total gold weight is stamped on the reverse of the coin.

One interesting aspect of American Eagle Gold Coins is that the weight, gold content and purity are all guaranteed by the US Government.

You can buy American Eagle gold coins from most coin dealers as well as on eBay and the American Gold Eagle and are likely one of the most traded of gold coins in the US.

Buy Gold Maples
The Canadian Gold Maple has been said to be the most beautiful gold coin in the world. It is certainly one of the best being a pure .9999 (24 karat) gold coin with no alloys added.

The Canadian Gold Maple Leaf Coins are among the purest gold coins available then.

All Canadian Maple Leaf Gold Coins have a bust of Queen Elizabeth II, on the obverse designed by Arnold Machin and on the reverse (tails or flip side) we have the famous Canadian Maple Leaf symbol.

Canadian Maple Leaf gold coins are official legal tender in Canada and can be bought from most of the major coin dealers.

Buy Gold Krugerrands
Everyone has heard of Krugerrand Gold Coins. They have been made famous in exciting and adventurous movies.

In fact the Krugerrand was named after Stephanus Johannes Paul Kruger, a former South African President and well known person involved in the formation of the South African Republic. His head is on the obverse, or "heads" side of the coin

The Krugerrand was the first gold coin to contain one ounce of fine gold. These days you can also get half ounce, quarter ounce and even one tenth ounce Krugerrands.

If you want to buy gold Krugerrands, they are generally available from most coin dealers, at a premium, and, although not the prettiest coin, perform the basic function of having gold cons available when you need them.

Buy Gold Bars
One of the best ways to buy gold is to buy gold bars. These can be from the simple one ounce gold bars up to the 400 ounce gold ingots. In practice most people buy the smaller gold bars as 400 ounce ingots are somewhat impractical.

1 ounce gold bars, 1 kilo gold bars, Swiss gold bars, all are popular and all can be obtained for a premium. All gold bars are .999 fine gold and 24 karat. Each is stamped with the weight, purity and manufacturer. The larger bars also have a specific number unique to that bar stamped on them.

The larger the bar you can afford, the less the premium. Bars are more difficult to sell than coins however so are more suitable to people who have no intention of selling their gold.

Best Gold to Buy
In truth the best gold to buy is solid gold as distinct to "paper gold". This means buying actual gold bullion and not stocks or shares in gold. Stocks and shares are subject to other influences and stock market fluctuations. Some people say that gold does not provide any interest. This is a good thing since if gold were to pay interest then the return on gold would be dependent upon other factors instead of it being just pure gold.

Some people say that gold stocks are better than gold itself. This is another fallacy as gold stocks are subject to other market forces, such as, for example, when there has been a stock market crash, gold stocks have suffered the same fate, which gold has actually moved up.

Gold could be considered just another commodity, such as sugar or pork bellies. This is clearly incorrect as sugar and pork bellies are consumed and have to be replaced. All the gold that ever was is still around either in circulation or stored somewhere. It does not decrease and alone is accumulated and saved and used as a currency back up.

In fact gold stands by itself. The best gold to buy is solid gold bullion. Either by purchasing and storing the gold yourself or in bank vaults or through a trusted custodian.

Yes gold bullion in the form of gold coins and bars is definitely the best gold to buy.

Best Way to Buy Gold
probably one of the best ways to buy gold is through GoldMoney.com. Here you can open an account, send the funds through and purchase a share of pooled gold, in the form of gold bars and coins, in either a bank vault in London or in Z├╝rich. The gold you purchase is yours and belongs to you. You have a very small storage fee but can buy and sell and even use gold as a medium of exchange by simply exchanging it with another GoldMoney.com account holder for a product or service. You have no transport, security or storage issues to worry about and your gold can continue to improve in value against currency. However, GoldMoney now offers the option of taking delivery of your gold in the form of 1000 gram gold bullion bars if you wish to. One simply goes to the website and places an order. Of course you have to own the gold in the first place and this is done through opening an account, as described earlier, and funding it with gold bullion. this is probably the best way to buy and sell gold.

In addition it is fully secure and GoldMoney.com has audits and a bar count on a regular basis which can be seen on site.

Sell Gold
Sometimes people have a need to sell gold. If it can be avoided it is better not to sell your gold coins or bars but if it is a dire necessity then there are two basic ways to do so. One is simply selling back to a dealer.

Another way to sell gold coins or bars is through an auction, a little more hit and miss as you may or may not get the value of the gold in your coin or coins. Also selling privately, usually the best way, as you are selling to someone that particularly wants the gold coin or bar and is prepared to pay for it. Selling by newspaper ad is known to be the least effective way to sell gold.

Scrap Gold
The scrap gold price is usually just under the spot price of gold for the day. There are some variations depending on the type of gold you are selling as scrap. Selling scrap gold jewelry for example. Much gold jewelry is less than 24k, usually 14k gold, 18k gold and sometimes 22k gold. Obviously you will get different scrap gold prices for each. Gold scrap dealers have a system for working out what the value of gold is in a gold ring for example./

Also keep in mind that they may be other precious metals in that gold jewelry piece, such as silver, platinum etc so it is not just the gold value you should be paid for but the value of the other metals also.

Investing in Gold
What is the best way to invest in gold? Gold investment can be done through stocks and shares in gold exploration or gold mining companies, gold futures, gold shares in ETFs, buying and storing actual gold bullion and possibly many other varied ways.

The closer to actual gold you can get is the best way to invest in gold. The optimum is, of course, owning actual gold bullion.

Stock and shares in mining and exploration companies are subject to external influences, such as costs involved in extraction, takeovers, buyouts, financial market fluctuations and other variables.

The same principle applies in general to gold ETFs, the subject of the next section.

Gold ETFs
A gold ETF, also called etf or gold exchange traded fund, is basically a share in a company such as StreetTracks GLD for example and not dissimilar to owning shares in a gold company in some respects..

This is where you are betting that the price of gold will rise. You do not actually own the gold, although your investment is 'backed' by gold, and you cannot redeem the gold. If you sell you get cash only. This is very different to actually owning the gold yourself.

So, in a gold ETF you do not own gold. Your investment is back by gold instead. Some people might consider this the same but there are some important differences. You have no control over the ownership of the gold. Your investment is subject to external influences, whereas owning gold bullion yourself means you have gold come what may and regardless of the financial state of the economy.

Gold Futures
Gold futures are precarious things. Simplified, here an individual is betting on what the gold price will be at some time in the future. Not only that, it is done with a small deposit that represents a larger amount of money. If your bet is right you get the larger amount of money. If it is not you will end up paying someone else the larger amount of money possibly depending on the final result of the gold price on the date specified. Gold futures are more complicated than that of course and require a great deal of knowledge and experience if one is to play in that market. 75% of all people that play in the gold futures market lose.

Far safer and more profitable to stick to buying gold where you know what you have got.

Gold Stocks
Under gold stocks can be lumped, junior gold stocks, best gold stocks, gold mining.

All are concerning gold shares or stock in gold mining companies or gold exploration companies. Again here one is betting that the companies can:

1. find the gold
2. extract the gold with out too much expense
3. process and sell the gold at a satisfactory rate.

All are subject to the costs involved in getting the gold and the current price of gold. Many mining companies buy what is called forward gold to protect themselves an this can affect the their share price also since this can amount to many tonnes of gold and they are betting on the future price of gold in this wise.

Information on mining and exploration, as well as current market forces that affect the gold price can be found in the various gold news letters and gold stock picks on the internet. Although substantial profits can be made with gold stocks, it is an area that requires much study and due diligence before one invests one's funds in possibilities rather than actual gold,.

Buy Gold
Gold has been around for thousands of years. And it will be around for thousands more. All the gold that has ever been dug up is still around and the gold you have could have been in an Inca Temple or used on the banks of Egypt during the Pharaohs. Gold does not tarnish or deteriorate and little is used in industry compared to silver.

Owning gold is a security against the uncertainties of the economy, against the loss of assets, and as a safe haven for the future. Gold value does not change through the years, only that currency measured by it.

And when people say "As good as gold" everyone knows exactly what they mean.

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