Gold is a precious metal that is extracted by washing the mining ore. Gold deposits are rare throughout the world. Most of them are already being developed and the rest are located in places that are difficult to access. Gold mining is a slow and labor-intensive process, which gives this metal rare status.
Gold also has unique physical and chemical parameters: anti-corrosion, ductility, the ability to resist exposure to chemicals. In addition to durability, it is characterized by excellent electrical conductivity: gold is actively used in space and aviation industries, in the creation of computer components, among others.
Buying gold as an investment is a stable option that saves money from inflation, devaluation, and loss of purchasing power. The production of this metal becomes more expensive every year, which directly affects the growth of its value.
New investors are constantly arriving on the gold market, they are just beginning to be interested in acquiring. Investors generally wonder when is the best time to invest? Or in what way is it better to buy? Coins or bars? Below are the answers to these and other questions.
When to buy?
If you want to invest in gold, but experts say that the cost of the precious metal is high, do not worry, there is no need to hesitate: buy gold at the current price, as you do not need it for speculation, but to save your savings from inflation and the financial crisis. In any case, the value of gold will manifest itself in all its glory during the crisis, and by that time it will no longer matter at what price you bought it. It will remain profitable. But you don’t need to invest all your money in the yellow precious metal. You need to buy gradually as in a volatile market you will have different prices at different times. In the long run, you will minimize your costs.
How to buy it?
To protect your savings from the consequences of the financial crisis, you need to own gold only in physical form, that is, buy coins or bars. Since the value of the precious metal is subject to large fluctuations, do not consider it as an investment in its pure form, and do not create high expectations of high returns. When buying precious metal, consider it real physical gold that will save your capital from long-term destruction. If you want to speculate, it is better to go to the casino.
Coins or bars?
You won’t lose anything if you buy the classic Krugerrand, Maple Leaf, Kangaroo, and Philharmonic investment coins. They are very liquid all over the world, which means that they can be sold at any time in almost any country. The most liquid gold coins are 1 ounce (31.1 grams), 1/2 ounce, and 1/4 ounce. Coins weighing 1 ounce are relatively profitable in price, as the maximum margin on them is 4% over the price of gold on the exchange. Don’t buy collectible gold coins. They will have a hard time selling them. The important thing is that the investment coins can be sold gradually if necessary. Gold bars are more difficult to sell. They cannot be divided into small pieces. Therefore, gold coins are the best way to invest in the yellow precious metal.
Gold trading on stock exchanges is done in the following ways:
- Through rates of increase and through decreasing metal prices.
- Invest in shares of companies that are dedicated to the extraction of gold.
It is possible to invest in gold on the exchange without physically owning the precious metal. After opening and replenishing a brokerage account, after installing the trading terminal, you can trade gold at almost any interest volume. Additionally, the use of leverage can significantly increase the potential profitability of transactions.
Trading gold allows you to:
- Conduct online transactions;
- Make a profit both in the fall and in the rise of the market, opening “long” or “short” positions;
- To minimize investor involvement in the process, the question can be entrusted to an experienced broker.
How much to buy?
Invest in gold only money that you will not urgently need in the near future. You should not have a situation in the near future where you urgently need to sell gold, otherwise, you will lose part of your investment. Approximately 20% of your capital can be safely invested in the yellow precious metal. It would be a big mistake to buy gold on credit.
These tips should help you decide to buy long-term investment gold to avoid your savings being affected by inflation and other crisis phenomena.