Buy physical gold for investment is the traditional way of investing in gold.
Even people who cannot read and write know that you can buy physical gold, hold it for a long time, and sell when the gold price is high.
After all, there is just one price for gold, regardless of where you live.
Before you buy physical gold, you need to know the difference between buying physical gold bars and buying gold accessories.
Gold accessories are not good for investment.
You need to pay a very high premium over spot rate.
The reason is that you have to pay the craftsman for making the gold accessories.
Another factor is that gold ring, gold necklace are not pure gold.
Pure gold is very soft.
If you drop a pure gold coin, the coin will dent.
You no longer have a perfectly round gold coin.
As such, pure gold to make ring and necklace is not possible. Most jewelries mix gold with other hard metals for strengthening the jewelries.
While there are occasions that call for gold jewelries, such as wedding. However, for investment purpose, you should buy physical gold in the form of gold bullion coins and gold bars.
If you have enough money to buy physical gold, it is best to buy 1 oz gold bar, rather than 1 oz gold bullion coin.
1 Oz Pamp Suisse Gold Bar is a premium gold bar.
You can buy it online through authorized agents or through your local goldsmith.
Gold bar has a lower premium than gold bullion coin.
That means you are likely to pay lower price for 1 oz Pamp Suisse Gold bar than one gold bullion coin.
While most people worry about storage after you buy physical gold, the fact is that most of us do not have so much money to buy a few ounces of gold bars.
It takes more than a thousand dollars just to get a single 1 oz Pamp Suisse Gold bar.
It is so small that you can slip into your sport shoes, and none be wiser.
A very important factor before you buy physical gold for investment is the volatility of the commodity.
Gold price fluctuates.
You need to monitor the price for a while before you commit to the purchase.
As of today, the current gold price is US$1551.
The average gold price for the year 2011 is US$1448.79.
The price of gold surges when something bad happens, and the investors sell off in stock market and buy commodity.
When the investors feel positive about the economy, they will sell off gold, and return to the stock market.
That is why the gold price fluctuates wildly.
Buy physical gold for investment never goes out of fashion, but the price fluctuates wildly.
If you happen to buy at a high price, it will take many years for the price to recover enough for you to break even.
Monday, July 11, 2011
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Thanks for the advice. I love gold jewelry and right now, I think I have a bunch of it. What do you think I will do with it?
ReplyDeleteI guess melting old gold accessories doesn't help as well right? I think one will only get very low prices for selling these because the trader or manufacturer has to melt and resell or even remodel it. So I think you are right about not investing in gold accessories.
ReplyDeleteHi Tanaris, either you hold on to it, or sell it through Ebay where you can get a better price.
ReplyDeleteIt is very hard to sell gold jewelries for a premium.
Hi Elders Chat, I think that is the reason the central banks in many countries keep pure gold bars instead of gold jewelries for investment purpose.
ReplyDeleteHi Scheng, I didn't know that gold jewelries are not good investment until I bumped into this post of yours. Since we were small, we were told that gold jewelries are a good investment!
ReplyDelete