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 kinds of bullion available: ingots and coinage. I recommend you begin with coins. Coins are simpler to buy and easier to sell than gold bars. On top of that, coins give you a lot greater flexibility when it comes to liquidating your precious metal holdings. For example, if you wanted to sell sixty percent of your gold holdings, it's more straightforward if you own twelve 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.
Beware of those gold vending machines. You can find them in malls and shopping centers all over the world and they target investors who know no other way of buying gold bullion. No professional investor would consider buying their gold from a bullion machine, and you shouldn't either.
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 sold on the indication that their value will rise over time. Sadly, this is usually not the outcome. The mint's original selling price for commemorative coins is nearly always significantly higher than the gold content. Commemorating events like Hitler's Birthday or The Centenary of Jimmy Raison's Hanging does not often add any value to the coin itself. This is the reason almost all experts warn against buying commemorative coins.
I would often tell greenhorns to exclusively deal in bullion coins and search for those with the least premium over the spot price of gold quoted online. The 1 oz. Krugerrand from South Africa is the most popular bullion coin there is and almost always trades at the least premium over the basic gold price.
The cheapest location in the world to buy gold coins is Hong Kong. The Central Area of Hong Kong around Queen's Road is crammed with banks offering gold coins at amounts as little as 0.2% over the premium price. Needless to say, unless you are within walking distance, you would have to factor in air fares to see if a visit would be worthwhile. But if you are going anyway...
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 kinds of bullion available: ingots and coinage. I recommend you begin with coins. Coins are simpler to buy and easier to sell than gold bars. On top of that, coins give you a lot greater flexibility when it comes to liquidating your precious metal holdings. For example, if you wanted to sell sixty percent of your gold holdings, it's more straightforward if you own twelve 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.
Beware of those gold vending machines. You can find them in malls and shopping centers all over the world and they target investors who know no other way of buying gold bullion. No professional investor would consider buying their gold from a bullion machine, and you shouldn't either.
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 sold on the indication that their value will rise over time. Sadly, this is usually not the outcome. The mint's original selling price for commemorative coins is nearly always significantly higher than the gold content. Commemorating events like Hitler's Birthday or The Centenary of Jimmy Raison's Hanging does not often add any value to the coin itself. This is the reason almost all experts warn against buying commemorative coins.
I would often tell greenhorns to exclusively deal in bullion coins and search for those with the least premium over the spot price of gold quoted online. The 1 oz. Krugerrand from South Africa is the most popular bullion coin there is and almost always trades at the least premium over the basic gold price.
The cheapest location in the world to buy gold coins is Hong Kong. The Central Area of Hong Kong around Queen's Road is crammed with banks offering gold coins at amounts as little as 0.2% over the premium price. Needless to say, unless you are within walking distance, you would have to factor in air fares to see if a visit would be worthwhile. But if you are going anyway...
About the Author:
Once you know what you are doing, investing in gold can be simple and very lucrative. If you can't get to Hong Kong, knowing the best place to buy gold is important. Other options include dealing in scrap silver to raise extra money.
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