Choosing Gold InvestmentsWhy have people continued investing in throughout history?
Gold is the proven safe haven in times of economic and
financial instability. Even more importantly gold is an excellent hedge against inflation over the long term. Gold is the only asset that in a direction opposite the price of the dollar. Many feel gold is the perfect investment for asset protection during the current world wide finanical melt down. When it comes to investing in gold you have more than one choice. Here's a summary of the World Gold Council's Guide To Investing in Gold: Gold Bullion Bars and Coins Many international precious metal refiners offer gold bars in a variety of weights and sizes ranging from 1 gram to the popular kilobar (32.15 troy ounces) to the international "London Good Delivery" bar (400 troy ounces). In normal times broker commissions on buying and selling gold bars are minimal, however with the recent investor interest in the yellow metal premiumms have been increasing. Purchasing bullion is the most cost efficient means of owning gold. Bars bearing the "hallmark" of internationally recognized refiners are the easiest to sell. You will find a list of approved refiners here http://www.lbma.org.uk/delivery/goldlist Buying gold bullion coins is have become very popular among medium and small investors. Gold bullion coins are legal tender of the country of issuance and their gold content is guaranteed. Bullion coins bear a face value that is largely symbolic. A coin's true value depends upon its gold content, plus a premium. The price of gold changes throughout the day. Gold Bar Weights All gold bars are denominated in different units of weight to accommodate the various cultural preferences of different geographical regions: Grammes. International One troy ounce is equal to 31.1034768 grams. So if gold was 900 dollars an ounce then one gram would be worth about 28.935673 dollars. Gold is measured in troy ounces as distinct to the more common avoirdupois ounce which is used for food and slightly lighter than a troy ounce. One avoirdupois ounce is equal to 28.349523125 grams. One tonne = 1000 kilograms = 32,150.746 troy
ounces. Gold statements are obligations of the issuing institution, usually a commercial bank, to deliver upon demand, a stated quantity and fineness of gold. Some feel that an investment in a statement account provides safe and convenient storage. This account allow investors to buy gold in convenient dollar amounts. Usually the gold held in "pooled" accounts. Gold Accumulation Plans This plan are like a savings vehicle. Customers invest a certain amount of money at regular intervals, regardless of changes in the gold price. Accumulation plans are offered by selected banks, brokerage firms and precious metals dealers. An investment in an accumulation program is "pooled" with other investors. Many investors are familiar with the stock market and comfortable investing stock in gold minings. The capital appreciation potential of a gold share is dependent not only on the future price of gold, but also on the future prospects of the company based on its management and operating strengths. Mining shares offer capital appreciation, as well as the opportunity to earn a dividend. Generally, if the price of gold rises, so do earnings and dividends. Gold Options A gold option provides investors the right to buy or sell gold at a fixed price at some specified future date. With options, the buyer's downside risk is limited to the cost of the option. Gold futures options are traded on recognized commodity exchanges.
Mutual funds offer investment in gold. With gold mutual funds, the investors is buying general market risk instead of company-specific risk. Mutual funds diversify your investment among dozens of companies. Some funds offer a broad mix of international mining stocks, while others invest in specific regions. ETFs also offer gold investments. |
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