Why Buy Gold? | Trading advice
Precious Metals – Trading in Gold & Silver
If supply is restricted this increases the value of the metal. If the demand for the metal outstrips supply, this increases the value of the metal. Examples of demand include the purchasing of gold by the federal reserves. This increased demand to an already limited supply of gold pushes up the price.
If all the gold in the world was collected and smelted together we would probably have a 25 meter cube. Gold has no real discernible use apart from for Jewelry and the fact it is so rare. However, Silver is different.
Silver’s value tends to be more volatile than gold and can be impacted by the supply, but also by the demand from industry and traders.
Silver is incredibly useful for industry having the highest electrical conductivity of any element, and the highest thermal conductivity of any metal. Silver performs vital roles in electronics, photography, water purification systems and even deodorant. Silver is a natural germicidal agent like other heavy metals but is not toxic to humans.
Gold and Silver are often seen as tradings that can hedge against the devaluation of currencies. Worries about the dollar and the euro eventually losing most of their value drives traders to seek to collect as much gold and silver as possible.
One can easily trade in silver and gold by buying coins and bullion. Of course the price of silver means it is easier to accumulate in smaller amounts over time. A 2012 1 oz American Eagle coin costs approximately $60 in 2012 whereas the gold version of the coin sells for approximately $2000.
One can also trade in mining stocks specializing in exploration or excavation, or alternatively precious metal ETF’s or gold and silver futures.
The price of gold has risen steadily for more than 30 years, and some economists forecast this trend will continue. In view of the current trend and future predictions, buying gold is an attractive option.
The price of gold changes on a daily basis in reaction to business news, government legislation and international events. Although the yearly trend over the last three decades has been upward, on a daily or weekly basis, the price may decline. The current price can be found on the New York Stock Exchange, in virtually every daily newspaper and at online gold sites.
The price of gold listed on the New York Stock Exchange is called the market price or spot price. The difference between the spot price and the selling price is called the premium; it is also referred to as the spread. The premium includes a profit for the seller, production and minting costs, and insurance and shipping costs. The premium can change based on the demand for and availability of gold, but it is usually between 4 percent and 6 percent for a 1-ounce gold coin. For a 1-ounce gold bar, the premium is usually between 0.9 percent and 4 percent. Before purchasing gold, the buyer should be familiar with the current spot price so that he or she can determine whether the seller is asking a reasonable premium.
Gold can be bought in several forms: bullion, coins or jewelry. Each form has advantages and disadvantages.
With the current strong price of gold and the prediction for the price to substantially increase, now is a good time to buy gold. An unstable stock market, increasing government debt and anticipated inflation all make gold an attractive tradings vehicle.
Why Buy Gold?
- Gold is the only money that has never failed in the 5,000 year history of its use by humans.
- Currently, there is only enough tradings-grade gold available on Earth for every living person to have 1/3rd of an ounce.
- Time and again throughout human history, gold has been revalued to account for all excess currency in circulation. Today, to account for all the U.S. dollars printed by the Federal Reserve, gold would have to be revalued at $15,000 per ounce.
- In times of crisis, gold is the safest tradings that also has the greatest potential to increase your wealth.
- Gold is a completely private and anonymous tradings that is also extremely portable.