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Today: Sun Dec 2017

Why Invest In Gold Online

Investing in gold is an investment in the future

There is no doubt that at one point or the other in your life, you will need to make the very important decision of where and how to invest your money. It is a decision that makes people around the world find to be a bit hard given the fact that there are many options to choose from. For instance, some would prefer investing in stocks; other would go for putting their money in a bank or financial institutions where they will earn interests while others prefer investing in commodities. The platform in which you will choose to invest your money in is crucial as it will, to some extent, determine or help secure your future. That is the reason why you will need to do an investment that is not only secure but also guarantees you some handsome returns. One perfect example of such an investment is investing in gold, a commodity that has been around for thousands of years and has remained treasured around the world. In other words, gold is to date assessed at a high value.

Humankind’s attraction to this precious metal can be dated many years back to as far as 4000 B.C. Possessing gold was a total sign of not only wealth but status as well and was restricted to governments and nobility. The first gold coins are said to have financed long-distance trade around the globe, around 500 B.C.

With time, many countries moved to use gold alongside other precious metals as currencies. Gold was, however, the most treasured and had value compared to other metals such as silver. But with the worldwide depression of the 1930s, most industrialized economies stopped using the gold standard, consequently severing the link between the quantity and value of gold and the value of money.

In spite of this, gold has continued to be the most sort-after commodity owing to its repute as a hedge against societal or monetary collapse and due to its scarcity as well.

Gold is one of the precious metals that has a lot of demands and can be used in many areas. It can be used in jewelry, electronic devices, piping to name but just a few. The many uses of gold are certainly one of the main causes why the cost of gold is and will continually go up.

It has been observed that even when the cost of living is going high or economies around the world going down, the value of gold still continues to increase. That is why investors refer to investing in gold as safe money. That implies that all the money that you will pump into investing in gold is safe and will always be there. That is a fact that is prudent for any smart investor who is trying to plan or secure their future and is not ready to make risky investments.

Contrary to what many people think, investing in gold can be much easier. That is for the reason that unlike many years back when one had no option other than buying or rather investing in physical gold, otherwise known as gold bullion, from a dealer or bank, an investor can nowadays make use of the exchange-traded funds, also known as ETFs, which replicates the movement of the underlying commodity, in this instance gold. This is normally considered the least expensive and easiest way to access the gold market.

Today, gold is available in the following main forms;

  • Historic Collectors’ coins – these were minted by many nations as currencies. They are nowadays collected as for their gold content and their numismatic value.
  • Collector Gold Coins – these are usually given by countries and commercial businesses. They are normally priced based on their purity and weight. The Canadian Maple Leaf, the American Eagle, and the South African Krugerrand are considered the most popular coins.
  • Gold Bars – The gold bars are available in by a weight of one gram, one ounce, 10 ounces, and 1 kg. They are also available with a general purity of 99%. They are also referred to as gold bullion. A standard ingot should be seven inches long, three and five-eighths inches wide and one and three-quarters inches high. It also weighs 27.5 pounds. Currently, an ingot would have a value of up to $500,000.
  • ETFs – Usually, a gold ETF does not typically hold this precious metal as a commodity but instead tracks its value or price with a combination of other financial derivatives.

On the other hand, it is essential to keep in mind that when looking forward to directly invest in gold, you will have the following three options;

  • Purchase the physical gold
  • Purchase an ETF that will replicate the price of the gold
  • Trade futures and options in the commodity market

The constitution of the US allows Congress to coin money. In 1792, the Coinage Act established America’s Mint and set value of various species of coins;

  1. a) Eagle – This is set at a value of $10. It was supposed to contain 270 grains of standard gold.
  2. b) Half-Eagle – valued at $2 and contains 135 grains of standard gold.
  3. c) Quarter-Eagle – was valued at $2.5 and had 67.5 grains of standard gold.
  4. d) Dollar or Unit – This is established as an equal of the “Spanish milled dollar” and contained 416 grains of standard gold.

There are evidently more than enough reasons and benefits of investing in gold. It will, however, depend on some factors such as the amount of capital that you are ready to pump in as well as the period of time that you intend to hold the investment. Over the last twenty-five years, the price of gold has ranged from a low of $347.84 per ounce in August 2001 to $1,900 per ounce in 2011. Today, a gold ounce costs $1,240.

The rationale of investing in gold is, in most cases, derived from the fact that it can retain its value in case if monetary failure, widespread war, government collapse or even societal turmoil. There are definitely lots of profits for those who can correctly project public reactions to certain events irrespective of whether the events materialize or not.

Gold also tends to be uncorrelated with other assets something which means that it does not go up when others assets do. It also does not have an inverse relationship, like bonds and stocks do with each other. Instead, it is a true reflection of many other investor sentiments. Investing in gold is, beyond any reasonable doubt, the best investment option that anyone can take.

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