It is during difficult times [such as these when] quantitative easing and currency wars have highlighted the volatility and vulnerability of currencies…that the true, safe value of gold really stands out…Fortunately, it is now easier for you to convert your savings into gold… [than ever before and this article outlines the reason for buying physical gold and the advantages and disadvantages of buying gold bars, ingots and/or coins. Read on!] Words: 853
So say edited excerpts from an article* posted on www.goldcoin.org originally entitled Should I Buy 32 krugerrands Or a 1 kg Gold bar?.
[The following article is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and the FREE Market Intelligence Report newsletter (register here) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
The article goes on to say in further edited excerpts:
Buying Gold Bars and Ingots
If you decide to go to a dealer in Hatton Garden or in New York, Sydney or Toronto, it is probable that they sell whole gold bars or smaller fractions as gold ingots. At first sight it seems very safe and easy but be careful what you pay.
The price of a 1Kg bar should be near to the gold price plus a few percent. However, the smaller ingots do not compare so well as they are often sold up to 50% higher than the spot price.
You buy the gold over the counter and then what? Ideally you should store it in a vault for security. This protects the integrity and value of your investment because it never leaves the professional circuit and there are no unnecessary transport costs to eat away at your investment. It also makes resale very simple because the gold does not have to move. Remember that your bar or ingot will lose value immediately if it has left the professional circuit.
- When it comes to selling you will need to pay (and find) a professional to assay (verify) your gold…
- In the case of expensive smaller ingots the gold price will have to increase drastically to recoup the 50% premium before any return is made.
- In the case of a 1 Kg bar you will need to find a buyer who has the money for a whole bar and trusts you that it is what you say it is.
- A kilo bar is difficult to transport. At airports it is considered as a blunt instrument. It can only be insured at the post office for a maximum value of five thousand Euros (or equivalent).
- There are also false ingots which are either plated or filled with tungsten.
- The price of bullion bars only increases with the spot price. This is important to remember at resale. The most important moment for a gold investment is the moment at which you choose to sell it i.e. for a maximum return on investment.
- beware of over-priced small ingots,
- do not take possession of gold and
- when you buy a 1Kg bar ensure that it is from a reputable professional source and close to the spot price.
- [While] bars and ingots do not maximise the benefits during periods when the price of gold is high…allocated physical gold is always preferable to “paper” gold as an investment.
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A Better Buy: Gold Coins
- Why? Notwithstanding the possible 50% upcharge one must pay for the convenience (portability, weight, cost, ease of storage, etc.) of owning gold coins:
a) they rise in price with the gold price reflecting the pure gold content they contain,
b) their “premium” increases when demand is high and
c) the “premium” can be different depending on:
which country the specific coin brand (South African Kruggerand; American Eagle; Canadian Maple Leaf; the Swiss Vrendi; the UK Sovereign; etc.) is being sold in,
the demand for specific brands and
the extent of supply of specific brands by location.
When the premium of a gold coin rises dramatically, even if the gold price doesn’t, it means buyers are seeking the coin as a store of wealth and safe haven.
Physical gold investment is an excellent way to protect your wealth, especially during times of crisis and instability.
Our review of the best places to buy gold online…[are] dependent on what your goal with the gold is — amassing physical bullion for financial security or to speculate on gold prices. Below are strategies and recommended dealers for each approach: Words: 532 Read More »
You have no doubt read countless articles on the price of gold costing x dollars per “troy ounce” or perhaps just x dollars per “ounce” but the difference between the two measurements is significant. For that matter, what’s the difference between a 24 karat gold ring and an 18 karat gold ring? Let me explain. Words: 863
There are many legitimate reasons to trade in gold and its derivatives. Gold has been proven time and time again to be an excellent “safe haven” investment, a holding that will appreciate in value during times of economic uncertainty. As such, gold may offer some valuable hedging and diversification benefits for a long-term portfolio. A number of exchange-traded products offering exposure to gold prices but not all gold ETFs are created equal. Here’s a quick rundown of factors to consider when making an investment in a gold ETF. Words: 1268
The most common misunderstandings regarding the primary gold ETF, SPDR Gold Trust (NYSE:GLD) is that it buys and sells gold. That is not the case. It is just a paper asset. It is not a way to buy gold and have someone else store your holdings for you. It is just an innovative way to “own gold.” [Below I outline more of just what GLD is and is not:] Words: 1470
I have always been leery of the two big exchange traded funds, SLV and GLD, because they lease the gold and silver that they sell you. I much prefer the ETFs SGOL, CEF, PSVL and PHYS which actually own the gold and silver they sell you and store it for you segregated vaults. Words: 717
Whole oceans of ink have been spilled detailing the good and not-so-good points of the closed-end fund CEF (Central Fund of Canada) and the twin ETF’s GLD (SPDR Gold Trust) and SLV (iShares Silver Trust) funds. My goal here is to distill the salient points down to the fewest words possible to help make your due diligence task somewhat less…well…tasking. [Let's go!] Words: 650