Precious metals are constantly traded; their markets are so active that it may seem that there is no pause in its trading activities. With the different time zones, it is not surprising for gold and silver to be traded 24x7 in various international bourses and financial exchanges.
It is the market activity that determines the gold and silver prices which may go up or down. The basic supply and demand factors are the main contributors to these metals’ daily prices.
Demand for gold
There are 3 main sources that affect the price of gold and silver.
One, investment demand by an individual, organization or government can affect these precious metals’ pricing. Small or large investments can affect the said metals’ pricing easily depending on the trade demand.
Next, industrial demand of gold and silver affects their pricing easily as they have attractive properties suited for many industrial uses.
Thirdly, there is always the jewelery demand of gold and silver to be adorned or stored and passed on from generation to generation in Oriental cultures. Such high esteem of gold keeps its pricing buoyant.
Supply of gold and silver
However, the supply of gold and silver is not as dynamic as their demand. Supply is limited from the earth’s resources and difficult to source using expensive technology and tools. This causes gold and silver to be more valuable. It is estimated that the total amount of gold that can ever be sourced is only a 20 cubic yard.
And because these precious metals are scarce, their current owners are holding on to them tightly; hence, the value of gold and silver keep increasing making it a vicious cycle on its supply and demand value.
Another important source which can determine the value of gold and silver is the futures market. This arena holds the supply and demand level of these precious metals as this is where buyers and sellers of gold and silver trade actively on various commodities as well as financial derivatives.
Spot price
Futures prices of these precious metals can affect the spot price of a commodity, which is usually gold; a spot price of a commodity is the actual price that the commodity is agreed upon to be traded and delivered immediately.
A spot price of any commodity is the actual value of the commodity at that point in time which is usually traded in US currency. But today the trend is changing with the spot price being traded in other currencies like the European Euros, Chinese Yuan, Japanese yen, Australian dollars, Hong Kong and Canadian dollars.
Monday, January 10, 2011
Where should I Buy Gold Coins?
One must be very careful when choosing to buy gold coins, whether you are a coin collector or a serious investor. Sufficient knowledge about the gold coins is necessary before a purchase should be made. In America, there are 2 basic types of gold coins that one can purchase – the rare gold and the bullion gold.
Gold Bullion Coins
The value of gold bullion coins lies in the content or amount of gold they possess. These gold coins exist in the millions with no outstanding appeal from serious coin collectors. It is easy to possess these as a means of owning in gold.
Many governments have minted their own gold bullion coins such as US mint on the American Eagle Gold coin and the Buffalo Gold coin, the Royal Canadian mint on the Gold Maple Leaf, the South African mint on the Krugerrand, Austrian mint on the Austrian Vienna Philharmonic and the Perth mint on the Australian Gold Nugget.
There are many sizes of these national gold bullion coins.
Rare Gold Coins
Rare gold coins are those minted between 1795 to 1933 in the U.S. which are few in number and thus are considered collectibles that are highly demanded.
The value of rare gold coins is not confined to the gold content within but according to the demand which can range from $1,000 and into the millions.
The U.S. Double Eagle twenty dollars gold pieces are the most popular rare gold coins that were minted between 1850 and 1933.
Buying Options
Although there are many places where you can purchase gold coins, it is best to purchase them at reputable coin dealers, like ITM Trading, especially for the rare gold coins. Local coin shops may also carry some gold coins for your convenience but not a good variety of choices would be available. A coin show is another place of purchase of gold coins which caters mainly for dealers. The public will not likely get the best price from a coin show as they are not knowledgeable enough about gold to negotiate a good deal. The last possible place to purchase gold coins is banks. But these may not always offer good bullion prices or service as gold coins trading is not their forte.
An individual who is an amateur in gold investment should get education on gold before getting involved in investing gold.
Gold Bullion Coins
The value of gold bullion coins lies in the content or amount of gold they possess. These gold coins exist in the millions with no outstanding appeal from serious coin collectors. It is easy to possess these as a means of owning in gold.
Many governments have minted their own gold bullion coins such as US mint on the American Eagle Gold coin and the Buffalo Gold coin, the Royal Canadian mint on the Gold Maple Leaf, the South African mint on the Krugerrand, Austrian mint on the Austrian Vienna Philharmonic and the Perth mint on the Australian Gold Nugget.
There are many sizes of these national gold bullion coins.
Rare Gold Coins
Rare gold coins are those minted between 1795 to 1933 in the U.S. which are few in number and thus are considered collectibles that are highly demanded.
The value of rare gold coins is not confined to the gold content within but according to the demand which can range from $1,000 and into the millions.
The U.S. Double Eagle twenty dollars gold pieces are the most popular rare gold coins that were minted between 1850 and 1933.
Buying Options
Although there are many places where you can purchase gold coins, it is best to purchase them at reputable coin dealers, like ITM Trading, especially for the rare gold coins. Local coin shops may also carry some gold coins for your convenience but not a good variety of choices would be available. A coin show is another place of purchase of gold coins which caters mainly for dealers. The public will not likely get the best price from a coin show as they are not knowledgeable enough about gold to negotiate a good deal. The last possible place to purchase gold coins is banks. But these may not always offer good bullion prices or service as gold coins trading is not their forte.
An individual who is an amateur in gold investment should get education on gold before getting involved in investing gold.
Sunday, December 5, 2010
Epitaph for the U.S. dollar
It is now getting more and more the clear that the strength of the dollar is not what it used to be. The US dollar has existed for around 100 years but as you look at the history of fiat currency, the US dollar as a fiat currency has already existed 39 years out of an average 80 years. Looking from this angle, it would seem that the US dollar is on its exit path. There are many reasons to indicate so.
The main reason
US dollar has evolved from being an asset-based currency into the currently debt based status. A few hundred centuries ago, money was strictly asset based through gold or silver with an intrinsic worth that you had it close with you all the time; you would be a case of ‘you are what you are worth’ quite literally.
We have had famous explorers such as Marco Polo who traveled around the world using European silver and gold to trade for Asian products like silk and spices, making gold and silver the widely acceptable monetary unit then until now, where daily commerce is performed via coin money. Coin money was also used in trade before the Civil War came on. Time and again in history, gold and silver were the preferred choices of trade, especially when the California gold rush saw a great natural supply to fuel the US economy.
Federal Reserve
The US Federal Reserve came on in early 1900s to streamline and regulate the banking processes. Silver and gold coins were the major form of currency but these were heavy and hard to carry and store. Hence, the Fed came up with certificates to replace the bulk of gold and silver which could be exchanged back to the precious metals. It put up a market value of $20 for every ounce of gold with a switch to paper money as the standard currency based on the gold exchange rate.
Gold and silver coins were considered real money; meaning, you are only as rich as the amount of these precious metals in your possession. This is called asset based money or currency which limited the amount of money in circulation in relation to the amount of gold and silver available. When you have such a currency that is controlled, there is no debt.
Simplicity
When paper money was introduced and became the standard currency form, its worth was based on the amount of gold and silver the nation had; meaning, you could only print one piece of paper money if the Fed had only one piece of gold of that worth.
It was all so simple until President Nixon came on the scene and took the US off of the gold standard.
The main reason
US dollar has evolved from being an asset-based currency into the currently debt based status. A few hundred centuries ago, money was strictly asset based through gold or silver with an intrinsic worth that you had it close with you all the time; you would be a case of ‘you are what you are worth’ quite literally.
We have had famous explorers such as Marco Polo who traveled around the world using European silver and gold to trade for Asian products like silk and spices, making gold and silver the widely acceptable monetary unit then until now, where daily commerce is performed via coin money. Coin money was also used in trade before the Civil War came on. Time and again in history, gold and silver were the preferred choices of trade, especially when the California gold rush saw a great natural supply to fuel the US economy.
Federal Reserve
The US Federal Reserve came on in early 1900s to streamline and regulate the banking processes. Silver and gold coins were the major form of currency but these were heavy and hard to carry and store. Hence, the Fed came up with certificates to replace the bulk of gold and silver which could be exchanged back to the precious metals. It put up a market value of $20 for every ounce of gold with a switch to paper money as the standard currency based on the gold exchange rate.
Gold and silver coins were considered real money; meaning, you are only as rich as the amount of these precious metals in your possession. This is called asset based money or currency which limited the amount of money in circulation in relation to the amount of gold and silver available. When you have such a currency that is controlled, there is no debt.
Simplicity
When paper money was introduced and became the standard currency form, its worth was based on the amount of gold and silver the nation had; meaning, you could only print one piece of paper money if the Fed had only one piece of gold of that worth.
It was all so simple until President Nixon came on the scene and took the US off of the gold standard.
CHOOSING A GOLD TRADING COMPANY
Factors to take into consideration
There are many factors to take into consideration while seeking the most appropriate company for gold trading; the offers, safety and security are only some of the most important. There are many such companies waiting to be chosen, especially in the United States. With all these factors to consider, one has to be sure of the choice he or she makes.
One of the most important associations is called the BBB, or Better Business Bureau. Many important companies are part of this association, as it is safe and reliable. Check the background of the company; it is reliable only if it receives a high rating from former clients. So, the first question to ask is whether the company is a member of the BBB or not.
Although the longevity of a company is not important in terms of the services it provides, it is not advisable to deal with very new trading companies. After the gold industry rose on the market, the numbers of this type of company rose significantly. Try to do business with a company that survived both the good and the bad periods.
Connecting with a trading company
When you try to create a connection with a trading company, it is advisable to choose the company that has the education of its clients as its top priority. If you want to start doing business in the gold industry, don’t hesitate to ask for help from those who already have some experience in the field. If a company doesn’t meet your needs and expectations, you should look for another one.
Another important aspect about a trading company is the efficiency of its methods. Being in touch with the latest news and information from the field is very important, especially for a company that deals with the gold industry. In order to make the right choice, pay attention to the company’s way of improving its services. Since we live in a world full of unreliable people, we all look for safety, especially when doing business. A company that uses gold as its tool of doing business should also have a legal department as a component. When a company doesn’t have relations with certain banks and legal institutions, it surely has problems, so it is better for you not to choose it in order to help you with your business idea. Regardless of the trading company you choose, keep in mind that the gold industry is a harsh one. You need to inform yourself in detail before taking the next step.
There are many factors to take into consideration while seeking the most appropriate company for gold trading; the offers, safety and security are only some of the most important. There are many such companies waiting to be chosen, especially in the United States. With all these factors to consider, one has to be sure of the choice he or she makes.
One of the most important associations is called the BBB, or Better Business Bureau. Many important companies are part of this association, as it is safe and reliable. Check the background of the company; it is reliable only if it receives a high rating from former clients. So, the first question to ask is whether the company is a member of the BBB or not.
Although the longevity of a company is not important in terms of the services it provides, it is not advisable to deal with very new trading companies. After the gold industry rose on the market, the numbers of this type of company rose significantly. Try to do business with a company that survived both the good and the bad periods.
Connecting with a trading company
When you try to create a connection with a trading company, it is advisable to choose the company that has the education of its clients as its top priority. If you want to start doing business in the gold industry, don’t hesitate to ask for help from those who already have some experience in the field. If a company doesn’t meet your needs and expectations, you should look for another one.
Another important aspect about a trading company is the efficiency of its methods. Being in touch with the latest news and information from the field is very important, especially for a company that deals with the gold industry. In order to make the right choice, pay attention to the company’s way of improving its services. Since we live in a world full of unreliable people, we all look for safety, especially when doing business. A company that uses gold as its tool of doing business should also have a legal department as a component. When a company doesn’t have relations with certain banks and legal institutions, it surely has problems, so it is better for you not to choose it in order to help you with your business idea. Regardless of the trading company you choose, keep in mind that the gold industry is a harsh one. You need to inform yourself in detail before taking the next step.
A QUICK GUIDE TO Gold Bullion Coins
It is one of those special hobbies in which not everyone would indulge although there are no bounds for anyone who is interested in buying gold coins. However, there are many different types of gold coins on the market for you to consider including in your new or current collection. Others may want these gold coins for investment purposes.
The More Popular Gold Coins
The following lists some of the preferred gold coins by the public. They are:
American Gold Eagle
This gold coin began minting in 1986 by law with a specification of copper-silver alloy for a more sturdy appearance to endure against wear and tear. This gold coin of the American Gold Eagle became the nation’s official bullion gold with Lady Liberty carrying the torch on the front side. The American Eagle gold coins are available in 1/10oz, 1/4oz, 1/2oz and 1 full ounce weights.
South Africa Krugerrand
This gold coin is the product of South Africa where it is minted from a durable gold alloy. The image of the previous President of South Africa, Paul Kruger, is imprinted on one side with Springbok on the other side.
Chevronets
The gold Chevronets was introduced by Russia in 1701 to replace the nation’s Ruble in 1757. However, the Russian Revolution caused a temporary halt of the Chevronets’ minting until the revolution ended. The authorities resumed Chevronets production in an attempt to ease out the devaluing Ruble; however, production of the Chevronets halted again in 1926. The Moscow Olympics in 1980 saw the revival of the 1925 Chevronets as a commemoration of the grand and prestigious event.
Britannia Gold
Britannia gold is Britain’s pride and joy with 22 carat and a mixture of 91.7% gold and silver or copper. The Britannia became the British’s official coin amongst its gold bullion collection. Britannia gold coins are available in ten pound denomination of 1/10 ounce troy gold, twenty-five pound denomination of ¼ ounce troy gold and fifty pound denomination of ½ ounce troy gold.
Gold Panda
The Gold Panda was minted with 99.9% gold by the Chinese with the Temple of Heaven imprinted on one of its sides. Though minting was frozen in 2002, it was resumed after much popular demand by coin collectors.
Islamic Gold Dinar
Malaysia also produced its own Kelantanese Dinar in September 2006 where these gold dinars were to be used in that state alone for paying dowries in accordance with the state’s Islamic Law, purchase of merchandise and even savings.
Gold Maple Leaf
The Royal Canadian Mint produced this Gold Maple Leaf gold coin from its locally mined gold that is 99.9% pure gold. There are two versions of the Gold Maple Leaf: normal and deluxe standard. This Maple Leaf gold coin can fetch $1,000,000 on the market with its 100kg weight at 3cm thick and 55cm wide in 2007.
The More Popular Gold Coins
The following lists some of the preferred gold coins by the public. They are:
American Gold Eagle
This gold coin began minting in 1986 by law with a specification of copper-silver alloy for a more sturdy appearance to endure against wear and tear. This gold coin of the American Gold Eagle became the nation’s official bullion gold with Lady Liberty carrying the torch on the front side. The American Eagle gold coins are available in 1/10oz, 1/4oz, 1/2oz and 1 full ounce weights.
South Africa Krugerrand
This gold coin is the product of South Africa where it is minted from a durable gold alloy. The image of the previous President of South Africa, Paul Kruger, is imprinted on one side with Springbok on the other side.
Chevronets
The gold Chevronets was introduced by Russia in 1701 to replace the nation’s Ruble in 1757. However, the Russian Revolution caused a temporary halt of the Chevronets’ minting until the revolution ended. The authorities resumed Chevronets production in an attempt to ease out the devaluing Ruble; however, production of the Chevronets halted again in 1926. The Moscow Olympics in 1980 saw the revival of the 1925 Chevronets as a commemoration of the grand and prestigious event.
Britannia Gold
Britannia gold is Britain’s pride and joy with 22 carat and a mixture of 91.7% gold and silver or copper. The Britannia became the British’s official coin amongst its gold bullion collection. Britannia gold coins are available in ten pound denomination of 1/10 ounce troy gold, twenty-five pound denomination of ¼ ounce troy gold and fifty pound denomination of ½ ounce troy gold.
Gold Panda
The Gold Panda was minted with 99.9% gold by the Chinese with the Temple of Heaven imprinted on one of its sides. Though minting was frozen in 2002, it was resumed after much popular demand by coin collectors.
Islamic Gold Dinar
Malaysia also produced its own Kelantanese Dinar in September 2006 where these gold dinars were to be used in that state alone for paying dowries in accordance with the state’s Islamic Law, purchase of merchandise and even savings.
Gold Maple Leaf
The Royal Canadian Mint produced this Gold Maple Leaf gold coin from its locally mined gold that is 99.9% pure gold. There are two versions of the Gold Maple Leaf: normal and deluxe standard. This Maple Leaf gold coin can fetch $1,000,000 on the market with its 100kg weight at 3cm thick and 55cm wide in 2007.
Thursday, October 14, 2010
Why It’s Important to Invest in Gold
In recent years, the demand for gold coins has shot to very great heights thus increasing its prices. It is true to say that more investors are becoming very interested in this precious commodity because of its various properties, especially the fact that it is a liquid form of asset that can come in handy in times of need.
The commodity, as well as its stocks, have strongly rocketed in the bull market in recent times creating increased profits for those who have bought in. Although the price of this precious metal is determined by its level of supply and demand, its purchasing power and value have remained steadfast, increasing instead of decreasing, as is the case with most assets.
What makes the commodity a bull market is its outstanding fundamentals. Although the world’s gold mines are playing their part in supplying the commodity, the tons of gold produced are not enough to meet the ever increasing demand. There is an acute shortage of gold, especially because it is demanded for different purposes, including investment and industrial use, as well as jewelry.
One of the reasons it is important to buy gold coins is the fact that their value is increasing by the year, and so are the prices. This means that if you manage to buy a good quantity of gold at the moment, in the next few months or years you can see substantial growth. The commodity is very convenient as it saves investors from incurring losses since it is not affected by most things that affect other forms of investment assets. This factor greatly reduces major risks to the advantage of the buyer.
As in all products, it is important to do some research and investigate the bullish factors of gold to ensure that your decision is a good one and that you have an investment strategy that will work for you. One of the most important things to understand is the gold market behavior, as well as demand-supply trends and the prices of gold.
The commodity, as well as its stocks, have strongly rocketed in the bull market in recent times creating increased profits for those who have bought in. Although the price of this precious metal is determined by its level of supply and demand, its purchasing power and value have remained steadfast, increasing instead of decreasing, as is the case with most assets.
What makes the commodity a bull market is its outstanding fundamentals. Although the world’s gold mines are playing their part in supplying the commodity, the tons of gold produced are not enough to meet the ever increasing demand. There is an acute shortage of gold, especially because it is demanded for different purposes, including investment and industrial use, as well as jewelry.
One of the reasons it is important to buy gold coins is the fact that their value is increasing by the year, and so are the prices. This means that if you manage to buy a good quantity of gold at the moment, in the next few months or years you can see substantial growth. The commodity is very convenient as it saves investors from incurring losses since it is not affected by most things that affect other forms of investment assets. This factor greatly reduces major risks to the advantage of the buyer.
As in all products, it is important to do some research and investigate the bullish factors of gold to ensure that your decision is a good one and that you have an investment strategy that will work for you. One of the most important things to understand is the gold market behavior, as well as demand-supply trends and the prices of gold.
Monday, October 11, 2010
Gold Coins as an Investment
It is up to an interested investor to know the various ways to invest in gold. Gold is a commodity that is gaining in value making the prices shoot up as the years go by. The value of gold has never been zero; it has a lot of advantages and its purchasing power has remained steady. Gold investment comes in various forms; an investor can choose to suit his needs.
Small bars and coins
These small amounts of gold have been legal since the reign of King Croesus who ruled Lydia in Western Asia. What is particular about this king is that his wealth mainly came from the gold sands and mines of the Pactolus River, making them legal tender. Small coins and bars are an attractive means of investing for most investors especially because any gold meant for investment purposes is exempted from VAT in many countries and from the European Union as a whole.
Bullion coins
These coins are normally issued by a governing body in most countries. They are considered legal tender because of their face value, not their content of gold. However, in purchasing, the gold content is what gives them value and the premium rates may vary from one dealer to another, as well as from one coin to another.
Bullion coin premiums rely mostly on the size of the coin unlike in numismatic and commemorative coins whose value is determined by their quality and rarity in addition to their gold content.
Small bars of gold
Any bar weighing 100g downwards is considered small. Gold comes in a variety of sizes and weights, which of course vary in value and price. These bars contain 99.5% of fine gold and provide a great platform for investment for interested parties or institutions. There are only 94 accredited brands and gold bar manufacturers in the whole world who produce different types of gold bars.
A potential investor should not limit himself to one method of gold investment. Instead, thorough research can help a great deal when settling for a method of investing and deciding what form of gold one is to invest in. This is largely determined by the various needs of the buyer, as well as the reason he or she is buying and investing in this commodity.
Gold investments should be given the same keen analysis as any other form of investment.
Small bars and coins
These small amounts of gold have been legal since the reign of King Croesus who ruled Lydia in Western Asia. What is particular about this king is that his wealth mainly came from the gold sands and mines of the Pactolus River, making them legal tender. Small coins and bars are an attractive means of investing for most investors especially because any gold meant for investment purposes is exempted from VAT in many countries and from the European Union as a whole.
Bullion coins
These coins are normally issued by a governing body in most countries. They are considered legal tender because of their face value, not their content of gold. However, in purchasing, the gold content is what gives them value and the premium rates may vary from one dealer to another, as well as from one coin to another.
Bullion coin premiums rely mostly on the size of the coin unlike in numismatic and commemorative coins whose value is determined by their quality and rarity in addition to their gold content.
Small bars of gold
Any bar weighing 100g downwards is considered small. Gold comes in a variety of sizes and weights, which of course vary in value and price. These bars contain 99.5% of fine gold and provide a great platform for investment for interested parties or institutions. There are only 94 accredited brands and gold bar manufacturers in the whole world who produce different types of gold bars.
A potential investor should not limit himself to one method of gold investment. Instead, thorough research can help a great deal when settling for a method of investing and deciding what form of gold one is to invest in. This is largely determined by the various needs of the buyer, as well as the reason he or she is buying and investing in this commodity.
Gold investments should be given the same keen analysis as any other form of investment.
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