At the moment the price of gold is standing at around $1300 oz. Whilst off its all-time high of $1900, it still stands considerably higher than the $300 of a few years ago. This rise has resulted in more and more people, investors and countries being interested in this precious metal for investment purposes.
Contrary to popular belief, investing in gold is actually pretty easy. You do not need a hoard of cash at your disposal to get started.
There are a number of places that sell gold at the moment. For example, a number of 'big banks' will allow you to order gold coins. If you live in a fairly large city then you may even find a company that offers gold coins 'off the shelf'. There are many numismatic organisations from which you may purchase gold coins directly on the internet.
The advantage of investing in coins (which is where most small investors tend to start) is that they are easy to store, easy to acquire, and you can invest with relatively small amounts of money. The disadvantages include; coin quality varies, gold purity differs and there is normally a premium charged over and above the true weight value of the gold.
One often hears friends and relatives state that they have made a good investment by purchasing gold jewellery, and this is normally the first time most people come in contact with this precious metal. However, you have to bear in mind that the gold content isn't quite as pure and there is a lot of added premium to the price due to the craftsmanship that has gone into it, and thus you may find it very difficult to make a profit when it comes to resale. There are always exceptions to the rule but generally jewellery should be purchased for adornment not investment (unless of course you can purchase it below the 'scrap metal' price of gold).
For those with more money at their disposal, you may want to look into the idea of investing in gold bullion or even 'e-gold'. If you are a seasoned investor of the stock market then you could also look into companies that rely on gold to generate their profits; for example, gold mining companies.
Storage and Security
If you are purchasing physical gold then there is a small disadvantage. This is that it is going to need to be stored. The price of this can be high unless you choose the right 'custodian', particularly if you purchase a sizeable amount. You will need to think about both where and how you are going to store it, and perhaps more importantly, the security of the gold. In addition to this, you will want to ensure that the atmospheric conditions are right. This means keeping the coins or bullion clean and ensuring that they don't oxidize, as this could reduce the value somewhat. There are a number of professional gold storage companies (generally referred to as Vaults) which offer such services - some at very competitive prices; e.g. BullionVault.
The Pros and Cons of Gold Investing
The benefit of purchasing bullion over coins is that you are not paying the premium (hefty in some cases) as you are acquiring this asset at current market (spot) price - or close to it. This means a much higher profit when you come to sell it in later years. Remember, generally speaking, gold investment should be for the longer term - especially if you are purchasing the physical metal. There are "futures markets and ETF's" for those wishing to speculate and invest for very short periods of time - but these tend more towards 'gambling' as opposed to 'investing'.
Perhaps the major advantage of gold is that it is a pretty solid investment. As you may know, demand for gold is incredibly high, and supply is low. The supply is set to fall even further as gold mines are shrinking in number. In fact, there are very few dedicated gold mines around the world right now. Historically, the price of gold has always risen - especially in the longer term - which means that it tends to be a safer investment unlike stocks and shares which can peak and trough fairly regularly depending on market conditions.
However, you need to be aware that investment in gold is a purely speculative investment. This means that you will only make money when you sell the gold on. If you invested in stocks & shares then you will most likely earn a dividend on your investment. If you invested in property then you would earn a rental income. You will not earn a stable income from your gold investment.
Many investors purchase gold and precious metals as a hedge against inflation or currency devaluation. It protects one's investment over time (based on historical records). This makes it very attractive for investment into a Retirement Plan - especially when one has a number of years until retirement. This is why there has been a surge in interest in Gold IRAs, Precious Metal IRAs and Gold IRA Rollovers. One can purchase gold bullion directly and place it into their retirement fund - knowing that it is unlikely to be eroded in value because of its 'hedging' capabilities.
To conclude, whilst gold does not provide an income per se, it offers other financial benefits - especially the maintenance of its purchasing power over time. Anyone considering an investment into gold or any other precious metal can do so with varying amounts of capital or money at their disposal. Investment experts mostly agree that everyone should hold some gold in their portfolios - the only difference between them is how much.
Are You Ready to Start Investing in Gold?
If you're ready to venture into the world of gold investment then your first port of call should be Regal Assets - the Official Online Gold IRA company where you will discover all of the resources you need to set up your own precious metals IRA, as well as a personal service that is second to none. To start on your path to personal prosperity right now just click below to request your FREE Complimentary Gold Investing Kit containing all of the vital knowledge and resources you will need to start investing in gold with confidence.