They often say that "diamonds are forever", but let me tell you, investing in precious metals is better. Buying gold and silver is regarded by wise savers as an answer to the current economic climate. Whilst the interest rates paid by banks are low, the spot price of gold is increasing all the time.
There are several main ways of putting your cash into gold. You can try ETFs or Exchange-Traded Funds; there are gold shares; and then there's the option of purchasing the gold yourself in the form of bullion. Bullion is by far the perfect choice for the beginner.
There are 2 principle types of bullion generally obtainable: coins, and ingots, also known as gold bars. I advise you to begin by buying gold coins. Coins are simpler to buy and easier to sell than gold bars. On top of that, coins offer a lot greater flexibility when it comes to selling your assets. For example, if you wanted to sell thirty-five percent of the gold you have, it's more straightforward if you have a dozen coins rather than a couple of ingots.
Do not spend a cent before you find the very best price you can. Bullion traders earn their profit from what is technically called "the spread". The Spread is the profit they make when they buy for less than the market price and sell off for a higher price. This varies but usually depends on the quantity of gold, and the grade of gold for sale. It might also depend on who the seller is.
Keep clear of gold bullion vending machines. They are springing up in shopping centers and malls in many parts of the world and are aimed at investors who do not know how to get bullion. No seasoned dealer would ever think of getting from a bullion machine, so follow their example.
Buying gold medals and coins is the most obvious way to go. Coins made from gold can be split up into two main kinds: numismatic and bullion coins. Bullion coins tend to be minted solely for the investment market, whilst numismatic coins are made to be used as currency and often have extra value apart from their gold composition. How much bullion coins cost is calculated on their gold content plus a mark-up of something like 5% to eight percent. This figure is generally called the "premium price". Typical investment gold coins include the Chinese Gold Panda, Malaysian Kijang Emas, French Napoleon, Canadian Gold Maple Leaf and Mexican Gold 50 Peso.
Commemorative coins are usually advertised with the suggestion that their value will rise over time. Sadly, this is usually not the outcome. The seller's original sale price for commemorative coins is nearly always higher than the gold content. Commemorating events like the 50th Anniversary of KFC or The Centenary of Jimmy Raison's Hanging rarely adds value to the coin itself. This is the reason almost all experts warn against speculating on commemorative coins.
I would often tell novices to deal exclusively in bullion coins and look for those offering the smallest premium over the quoted gold price. The one ounce Krugerrand from South Africa is the most used bullion coin in the world and usually trades at the least premium over the gold spot price.
Hong Kong is the least expensive place to buy bullion. The Central Area around Queen's Road is crammed with banks advertising gold coins at rates as little as 0.2% over the premium price. Of course, transport costs can add a lot to the price. Maybe you could use the excuse to go for a holiday...
There are several main ways of putting your cash into gold. You can try ETFs or Exchange-Traded Funds; there are gold shares; and then there's the option of purchasing the gold yourself in the form of bullion. Bullion is by far the perfect choice for the beginner.
There are 2 principle types of bullion generally obtainable: coins, and ingots, also known as gold bars. I advise you to begin by buying gold coins. Coins are simpler to buy and easier to sell than gold bars. On top of that, coins offer a lot greater flexibility when it comes to selling your assets. For example, if you wanted to sell thirty-five percent of the gold you have, it's more straightforward if you have a dozen coins rather than a couple of ingots.
Do not spend a cent before you find the very best price you can. Bullion traders earn their profit from what is technically called "the spread". The Spread is the profit they make when they buy for less than the market price and sell off for a higher price. This varies but usually depends on the quantity of gold, and the grade of gold for sale. It might also depend on who the seller is.
Keep clear of gold bullion vending machines. They are springing up in shopping centers and malls in many parts of the world and are aimed at investors who do not know how to get bullion. No seasoned dealer would ever think of getting from a bullion machine, so follow their example.
Buying gold medals and coins is the most obvious way to go. Coins made from gold can be split up into two main kinds: numismatic and bullion coins. Bullion coins tend to be minted solely for the investment market, whilst numismatic coins are made to be used as currency and often have extra value apart from their gold composition. How much bullion coins cost is calculated on their gold content plus a mark-up of something like 5% to eight percent. This figure is generally called the "premium price". Typical investment gold coins include the Chinese Gold Panda, Malaysian Kijang Emas, French Napoleon, Canadian Gold Maple Leaf and Mexican Gold 50 Peso.
Commemorative coins are usually advertised with the suggestion that their value will rise over time. Sadly, this is usually not the outcome. The seller's original sale price for commemorative coins is nearly always higher than the gold content. Commemorating events like the 50th Anniversary of KFC or The Centenary of Jimmy Raison's Hanging rarely adds value to the coin itself. This is the reason almost all experts warn against speculating on commemorative coins.
I would often tell novices to deal exclusively in bullion coins and look for those offering the smallest premium over the quoted gold price. The one ounce Krugerrand from South Africa is the most used bullion coin in the world and usually trades at the least premium over the gold spot price.
Hong Kong is the least expensive place to buy bullion. The Central Area around Queen's Road is crammed with banks advertising gold coins at rates as little as 0.2% over the premium price. Of course, transport costs can add a lot to the price. Maybe you could use the excuse to go for a holiday...
About the Author:
Occasionally you can find a genuine bargain on Ebay, which may not be the very best place to buy gold but sometimes you can get lucky. I can also recommend scrap silver as a way of hedging against recession.
