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.
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