Buying gold has long been recognized as an outstanding way to store and increase wealth, and today’s investors have plenty of chances to improve their net worth. Benefiting from the sheer variety of opportunities that exist with alluring precious metals, purchasers can find the mode that is especially well suited to their needs. The commodities are readily available in different vehicles, and buyers can choose to keep their own gold at home, store it safely in a local bank deposit box, or buy shares in a company that produces a known amount of the precious metal on an annual basis. Because gold and other precious metals are highly liquid, investors also have limited risks, so they can grow their capital in a safe and secure manner.
The History of Gold
While gold was first discovered thousands of years ago and was instantly valued for its alluring color and its malleability, it took some time for the precious metal to catch on with investors. Ultimately gold became one of the chief means of exchange, and it was first widely used around 700 BC by the Lydians who minted coins that contained a certain portion of gold and silver. The coins were known as electrum, and the bullion helped to establish a dynasty that lasted for centuries. The Roman Empire improved gold-mining techniques, and the metal was traded all around the world for other commodities, like Indian spices and Asian silks. Having a single product that served as a standard against which other goods could be measured also increased the value of precious metals and helped to foster the growth of an international economy.
Gold Investment Opportunities
Today’s investors can benefit from the rising value of gold, and anyone has plenty of ways to turn their money into lasting wealth. Gold bullion and coins that are minted by some of the world’s leading governments are just one way for buyers to increase their capital by purchasing a commodity that has regularly increased in value. When purchasing gold, it’s essential to work with a reliable firm that offers products of a known weight and purity. Monex works directly with many of the world’s leading mints, and the firm has products that are assayed for purity and fully certified for the security of investors.
Gold Bullion and Coins
South Africa, the United States, and Canada are just a few of the countries that mint gold in coins that contain a known percentage of the precious metal. Purchasing these coins is an ideal way for investors to make sure that they receive a known percentage of the product, so they can rest assured as to the value of their gold. While there is a small mark up for minting costs, the opportunity for capital growth is excellent, and buyers can also keep their gold at home and enjoy the remarkable beauty of a natural precious metal.
For those who are concerned about the security issues of keeping physical gold in their home, Exchange-Traded Funds (ETF)s are also readily available. These ETFs are much like traditional mutual funds, and the value of the stock is based on the current price of gold. The funds are easily bought and sold on the open market, and buyers can benefit from many of the standard investing approaches, like selling short and speculating on future values.
Investing in Mining Companies
In addition to buying coins or purchasing stock in a mutual fund that is based on the value of gold, investors can also buy shares in a mining company. These firms own a known amount of gold or other precious metals in their underground mines, and they produce a set amount of the material on an annual basis. This option is another way for buyers to benefit from precious metals’ regular increase in value and ensures that investors have a chance to earn a high return on their initial outlay.
Industrial Uses Drive Prices
Unlike fiat money, which does not have any intrinsic value, gold and other precious metals have a variety of industrial uses that create a demand for the materials and helps to ensure that prices remain moving higher. Gold is commonly used in the jewelry industry, and it is also found in high-quality connectors that are essential in computers and other electronic devices. The precious metal is one of the best conductors on the planet, and it is incredibly useful for this reason.
Platinum is a relatively new player in the precious metals scene, and the commodity has numerous industrial uses that ensure the metal’s value will remain high for some time into the future. Since the material is one of the rarest precious metals, it also offers stability for investors and protects buyers by the limited amount of supply. Platinum plays a crucial role in the automobile industry because it is used in catalytic converters that help reduce pollution by converting toxic substances in exhaust into water vapor and other harmless byproducts.
The Future Outlook of Investment Gold
With strict measures in place that limit the amount of gold that is sold on the world market, investors can also be sure that they are exposed to limited risks. Currently, the Western nations that have known stockpiles of the material in their central reserves have an agreement in place that limits the amount of gold that is sold on an annual basis. The latest agreement, also known as the third Central Bank Gold Agreement (CBGA3) is in force until September 26, 2014, and it limits the amount of the gold that can be sold by signatory parties. The CGBA3 affirms that gold is an essential part of global monetary reserves, and it has a collective ceiling that prohibits the annual sale of more than 400 tons. In addition, the agreement is good for five years, and it limits the sale of gold to 2,500 tons over this period of time. With such measures in place, investors are assured of stability and are less subject to a quick devaluation of the metal.
Global Economic Uncertainty
Addressing the issue of global uncertainty in the economic markets, investors can also benefit from buying gold, silver, platinum, and palladium. Of particular concern to many on the global investing scene is the current debt crisis that the United States is facing. The country’s currency is currently the standard by which many others are judged, and with a dollar that is devalued, investors can lose money due to inflation and the lack of their dollar to purchase the same amount of goods. This problem is limited when investor purchase gold because the metal is easily traded around the world, and it also offers stability that has withstood the rise and fall of numerous fiat currencies throughout time.
Investing in gold and other precious metals is a proactive way to create a well-rounded portfolio that distinctly confronts the issues of the current international economy. The precious metals have passed the test of time, and recent increases in value assures investors that they can create lasting wealth and enjoy the highest return. While shopping for gold bullion or coins, it is essential for buyers to work with a reliable firm that has a reputation for providing products of known purity and weight. Monex makes it easy for anyone to purchase gold, silver, platinum, or palladium, and the provider offers a wide variety of products that are ideal for investors in virtually every type of category.