10 Reasons to invest in Gold

Gold is one of most traded metals on the international markets. This makes it the most fluid metallic commodity investment to make.

The following are top 10 reasons to invest in gold:

High demand: Due to its increasing rarity, the demand for gold is constantly on a long-term upward trend which ensures that it is consistently in high demand.

Inflation proof: Gold is an international and universal standard that is safe from influences of one country’s monetary policy. Thus, unlike ordinary currencies, it is free from adverse inflationary pressure.

Fiscal Stability: Unlike major international legal tenders such as Dollar, Euro, Sterling Pound, Yen, Yuan, etc. it remains stable irrespective of changes in political and legal status of a given regime.

Standard measure of value: Gold is a universal standard measure of value and therefore is a standard against which major international currencies and reserves are based on. Thus, its value can be exchanged wherever and whenever you want, independent of the geo-political limitations.

Appreciative nature: Due its declining availability, gold’s value cannot be diluted by consequence of over-supply. Consequently, although there could be short-term shocks, its value keeps on appreciating in the long-term.

Portfolio Mix: Due to the various units of gold and gold equivalents, gold can be easily blended with other investments to form a secure and diversified investment portfolio.

Store of value: Consequently, most international reserves such as those of the World Bank and IMF and indeed reserves of major economies such as US, UK, India, China, Russia and others are stored in the form of gold.

Ornamental value: Gold is not like any other metal and for that matter, not like any other ordinary legal tender. It has an ornamental value and can thus be molded into various forms that make it gain higher value than its intrinsic value. The ornamental value of gold ensures that it will always be an emblem of beauty, class and nobility and therefore it will continue to be held in high esteem for ages to come.

Sentimental value: The sentimentality of gold has been appreciated since time immemorial. Gold remains the most precious gift that one can give to another. It is found in golden wedding rings, golden watches, golden chains, status chains such as mayoral and royal chains, medals of Honor and many other modes of appreciation. Gold will always hold its position as one of the most sentimental gifts awarded as a token of appreciation recognized and appreciated universally.

Security: Gold can be highly secure. Due to its universality in terms value determination, gold is easy to be insured and stored. Furthermore, gold has always been considered as the safest hedge, next to real estate. However, due global meltdown that has created thousands of foreclosures across US and EU, many people have lost faith in housing as a safe hedge and therefore are looking forward to gold as the only viable safe hedge whose value can hardly be lost due to global economic meltdown.


4 Ways Not to Buy Gold

Investing on gold can be exciting, but there are several ways not to buy gold. Believe it or not, there is a right and wrong way to purchase gold! To make sure that you stay on the safe side, it is crucial that you should be aware of what you are dealing with. Here I am discussing 4 ways you should not follow while buying gold.

1) Don’t pay too much

The most important factor while buying gold is not overpaying. On the day that you purchase your gold, be sure that you are aware of the spot price. This information can be checked online at a variety of sources, including our Current Gold Price page, without any hassles. The typical markup over the spot price is 5-8%. If the asking price is more than the typical markup, never buy it.

2) Don’t consider the historical value

A lot of people make the mistake of purchasing coins for their historical value. In this situation, this is the wrong route to take. Keep in mind that coins of this type will not have any value other than their melt value (The metal value of coin). Some dealers try to charge extra markup by narrating the fabulous history associated with the coin. However, you are an investor here, not a historian. So, be aware of people who try to sell you these items.

3) Don’t buy out of confiscation panic

Be aware of confiscation scare tactics. Many dealers use the story of President Roosevelt (he ordered to confiscate gold from U.S. citizens due to circumstances, and some rare coins were exempted from it) to con people into purchasing coins that are extremely over-priced, saying that they are exempt from confiscation. Stay clear of situations such as this one.

4) Never borrow for buying gold

Borrowing to buy gold is a great mistake that some people tend to make. This method is referred to as buying or purchasing within or on a margin. Using this method will get you into more trouble that you may not be willing to endure. To stay clear of any issues or problems, it’s in your best interest not to purchase on a margin.

If you keep each of these tips and guidelines in mind while you’re purchasing or investing in gold, you will be on the road to success. It’s in your best interest not to get side-tracked or conned by dealers. If you’re not sure of what you’re doing and you want to a few of the most popular tactics that may be used, you should conduct a little research, such as on this site, before you step into this world.