From a financial standpoint, learning how to buy gold correctly is a good investment. This precious metal is a “safe” venture, considering the economy and diversification play we have these days. But how can this metal add to your investment portfolio? Gold has useful and specific qualities that provide necessary value during sketchy economic times. Thus, this metal is considered a potentially profitable and highly liquid investment.
Why Invest in Gold
- It is rare. According to industry data, gold is very rare. It comprises only 5 parts per billion of the whole globe’s crust. Meaning, gold is very difficult to extract and hard to find.
- Gold does not lose its structure and quality, and will never decay.
- Gold is finite. It is very hard to find as well. Developing and excavating gold is expensive, difficult, and extremely risky. It is hard to dig up and locate, and normally has a strong record of demands because supply is usually short.
Buying Gold Directly
Knowing when to strike is the number one consideration when buying gold, at the right time. Be patient and be keen with the market. Just like funds and stocks, the value of gold comes from selling high and buying low. Generally, gold prices become lower when the stock market is relatively high.
Gold is a very volatile commodity. Its prices bounce up and down regularly. For you to get a sense of where you are buying gold relative to its price, observe the spot price of the gold. This is a reflection of the gold’s average bid price, and is usually cited on most global gold exchanges.
When global events happen, so does the gold’s spot price. Natural catastrophes, recession, central bank moves, military conflicts, economic forecasts; these are just some events that are likely to occur on a global scale.
Tips When You Buy Gold.
If you buy gold directly, do your homework to find the best deals. Here are some helpful tips.
- Look around to find the best price. To find the best rates of gold, try to cast a wide net. You can start looking at websites from various gold dealers and gold exchangers. This is relatively easier to find since most of them provide their own websites for references.
- Check the dealer’s policies. Usually, gold dealers are trustworthy sources to sell and buy gold. But still, beware; especially if you’re thinking about buying gold and selling it back to where you bought it. There are gold dealers that charge expensive premiums for gold buybacks, although there are some who won’t.
- Check for Warning Signs. To be safe, avoid buying gold from pawn shops and dealers who offer huge discounts. Stay away from any gold dealer that charges a hefty price for safekeeping your gold. Ideally, store the gold yourself. Invest in a home safety deposit box or a bank safe.
Buying Gold as Investments
You can buy gold bricks, coins or bullions from exchanges and dealers. However, practice due diligence in checking their background to avoid getting duped from disreputable sellers. You can invest in gold stocks, mutual and exchange-traded funds, gold futures, to name a few.
As a lot of people are more convinced today that gold is truly a good investment, it’s a good and wise move to buy gold from a safe vendor.
Author – Mary Wallace