Apr 2012


Apr 2012

Gold Investment

By StoneX Bullion

Reasons for Gold Investment

Gold investment, as its name suggests, means being one of the many participants on a bull market. The current international gold market is denominated a bull market because there are more buyers than sellers. Therefore, gold investment is an intense activity at the global level. Why is that? It started when the global crisis from 2007 appeared.

People began worrying about the future of some currencies, there were questions raised on how the US dollar will evolve, therefore they needed something to offer them financial comfort. And when we are talking of safe harbor in times of crisis we are mainly referring to gold investment. The reason for it is because gold is a valuable commodity, but more than that, is has the informal status of being an international currency. Therefore, when analyzing the main currencies and commodities in which people make gold investment, is to be found at the beginning of such a list.

When taking the decision of making such an investment, whether it is about investing into gold bullion or in nonphysical gold, individuals should analyze closely the evolution of the gold spot price. It changes twice daily so staying updated is one crucial characteristic when investing into this precious metal, or any precious metal for that matter. It is an easy thing to do, with an Internet connection you will find a gold char anywhere.

Gold Investment in Bullion Coins

When an individual chooses coins as the object of his gold investment, the possibilities are countless. Gold coins have been minted by numerous countries, from all continents. So, a research is necessary on what kind of coins an individual would like to invest in, especially if he is at the beginning of the road as an investor in gold.

Bullion coins come in many sizes like weight, diameter and thickness, different purities starting from 99.90% fineness, and different face values, therefore they come in an array of prices. There is a long list that awaits any individual that wants to make gold investment. No matter how a person chooses, he should keep in mind that gold coins are priced according to the gold spot price to which a premium is added.

The premium differs from coin to coin, increasing when a gold bullion coin is in high demand. Therefore, a wise gold investment would be to buy coins when their price is more affordable and sell them when demand increases. Your profit will be the difference of the premiums, and it can get to be a substantial one.

Gold Investment in Bullion Bars

When it comes to gold investment in the form of gold bullion bars, there are also many possibilities, and in this case they are established mostly by the sizes in which bars are manufactured. For example, the preferred gold bar on the spot market, for traders and banks, is the kilobar. It is the equivalent of 1,000 grams.

Another thing to remember when bars are your choice for gold investment is that their premium is lower than that of gold coins and it decreases with the increase of quantity. Gold bars are a preferred gold investment for many people, especially for professional traders and investors that have at their disposal a substantial amount of funds.