Investors looking for portfolio diversification have realized the importance of commodity allocation as a way of abating risk as well as maximizing profits. Buying gold coins seems to be the best choice as it comes with several benefits, the main one being diversification of the portfolio in the most optimal way possible.
Gold can be used as a management tool for risk as a result of its fundamental value and has therefore been used to effectively diversify many portfolios in the market. Compared to other commodities, gold has been proven by research to greatly impact the financial and economic market due to its unique characteristics. For instance, it has low correlation with and is more resistant to business cycles, which typically lead to losses. Gold also has had lower volatility compared to other commodities available for investment in the past 10 years.
These aspects have given investors the confidence to purchase this commodity as they are assured of lowered risks even when the markets experience a downturn. Besides being less volatile than other commodities, gold has performed well in the markets while supply and demand forces make it a highly liquid commodity. This has provided a stable financial asset for those who choose gold as their main commodity.
Investors have found that gold can withstand market forces in relation to the various market aspects that have negative impacts on other commodities. This has provided the safe haven for which investors have been searching. This commodity is sure to remain a major market force in the future since its the bull market remains in the second phase. Even though the price of gold changes daily as does any other market commodity, the value of this particular commodity is not at all compromised by these changes to the benefit of the investors with the wisdom to protect their assets by purchasing gold due to the positive underlying trend.
Showing posts with label gold investors. Show all posts
Showing posts with label gold investors. Show all posts
Tuesday, April 19, 2011
Wednesday, February 9, 2011
Which US Gold Coins Are Investors Seeking?
Although the actual gold markets lie oceans apart, the gold activities in the various markets impact gold prices. Gold is normally traded in gold bullion in these markets, but investors are also interested in the common date gold coins of the U.S.
The October 2010 Financial Times report stated analysts’ opinion that gold prices are skyrocketing in the midst of the bearish economy as well as the poor level of confidence in government policies.
Bullion Gold versus Common Date Gold
Common date gold coins do not enjoy the same fanfare as gold bullion coins. The former are scarce classic gold coins known as “generics.” These were minted in the 19th and 20th centuries by the millions for circulation. But most were lost or melted and only a few hundred thousand are left for trading.
Bullion gold pieces on the other hand enjoy trading as a financial market commodity. The government minted these for investment purposes. They are valued according to the gold content within them.
But coin buyers are interested in the US common date gold coins because of their scarcity, classic nature, and they can perform better is some instances than bullion coins.
Gold coins that were minted for circulation are hard to find as most of them got lost or melted; some may be hoarded without anyone’s knowledge. Similarly for US common date gold coins; their “scarcity” increases their investment value. There is no reproduction, unlike gold bullion.
Many coin collectors want to get a piece of the US common date gold coin for its “classic” value; the coin was minted only at a certain period of time; namely, in the 19th and early 20th centuries.
US common date gold coins are of more value than what their metal is worth; their price never dips but rises even when the gold price dips.
There is no legal accountability in the purchase or sale of US common date gold coins unlike the bullion gold. Meaning they are privately traded daily without any reporting.
The $20 St. Gaudens, $20 Liberty, $10 Indian and $10 Liberty, $5 Indian and $5 Liberty all have some dates that are considered to be common.
Rising Popularity of the Gold American Eagle
The American Gold Eagle coins are investors’ favorite gold coins although their sale was modest upon their introduction. The US Mint sold 165k oz. of gold eagle coins in 2000 but in 2001, the sales rose to 325k oz. despite bearish markets. When the gold price was low at $272, American gold eagles recorded $88 million sales.
The demand for American Gold Eagles soared during the 2008 summer even when a global recession was rumored. When the panic began in the later part of 2008, the American Gold Eagles were selling at an average monthly price of 111k oz compared to its earlier 33k oz. When the gold price hovered around $1350 to $1399, the American Gold Eagle Proof 1 oz. gold coins were sold at $1635 while the 1/10 oz. gold coins at $180.00 in October 2010.
The October 2010 Financial Times report stated analysts’ opinion that gold prices are skyrocketing in the midst of the bearish economy as well as the poor level of confidence in government policies.
Bullion Gold versus Common Date Gold
Common date gold coins do not enjoy the same fanfare as gold bullion coins. The former are scarce classic gold coins known as “generics.” These were minted in the 19th and 20th centuries by the millions for circulation. But most were lost or melted and only a few hundred thousand are left for trading.
Bullion gold pieces on the other hand enjoy trading as a financial market commodity. The government minted these for investment purposes. They are valued according to the gold content within them.
But coin buyers are interested in the US common date gold coins because of their scarcity, classic nature, and they can perform better is some instances than bullion coins.
Gold coins that were minted for circulation are hard to find as most of them got lost or melted; some may be hoarded without anyone’s knowledge. Similarly for US common date gold coins; their “scarcity” increases their investment value. There is no reproduction, unlike gold bullion.
Many coin collectors want to get a piece of the US common date gold coin for its “classic” value; the coin was minted only at a certain period of time; namely, in the 19th and early 20th centuries.
US common date gold coins are of more value than what their metal is worth; their price never dips but rises even when the gold price dips.
There is no legal accountability in the purchase or sale of US common date gold coins unlike the bullion gold. Meaning they are privately traded daily without any reporting.
The $20 St. Gaudens, $20 Liberty, $10 Indian and $10 Liberty, $5 Indian and $5 Liberty all have some dates that are considered to be common.
Rising Popularity of the Gold American Eagle
The American Gold Eagle coins are investors’ favorite gold coins although their sale was modest upon their introduction. The US Mint sold 165k oz. of gold eagle coins in 2000 but in 2001, the sales rose to 325k oz. despite bearish markets. When the gold price was low at $272, American gold eagles recorded $88 million sales.
The demand for American Gold Eagles soared during the 2008 summer even when a global recession was rumored. When the panic began in the later part of 2008, the American Gold Eagles were selling at an average monthly price of 111k oz compared to its earlier 33k oz. When the gold price hovered around $1350 to $1399, the American Gold Eagle Proof 1 oz. gold coins were sold at $1635 while the 1/10 oz. gold coins at $180.00 in October 2010.
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.
Tuesday, February 23, 2010
Who Buys Gold Coins?
The Investor
There was a time when the only people who bought gold coins were the so-called “gold bugs.” These people were considered eccentric for buying gold coins back in the 1970s after gold ownership was legalized in the United States of America.
But by the time the 1970s were over, the gold bugs were proven to be pretty darn savvy for having the foresight to protect their wealth with gold coins. In fact, by the time 1980 debuted, the South African Krugerrand gold coin was one of the most popular investments in the world. It wasn’t just gold bugs buying anymore. Investors of all philosophies realized the value of including gold in their diversified portfolios.
Whether someone was looking for aggressive growth or preservation of capital, gold had a role to play because it could both produce profits and protect wealth from high inflation and crisis. So, basically, all sorts of people were buying gold in the period from 1975-1981.
In 1980, gold peaked at $850 per ounce and demand for gold coins also peaked. While many continued to buy gold in the 1980s, especially in 1987 in the wake of a huge stock market crash in America, overall demand for gold waned over the course of the decade and into the 1990s. This was because the price of gold stayed range-bound for extended periods of time.
Once again, gold coins became less popular among investors. In fact, at one point in the 1990s, according to a Wall Street study, American investors, on average, were negatively invested in gold, reflecting the fact that more money was placed on the short side of futures contracts than was on the long side.
In a sense, the few who were buying gold coins during this period were new gold bugs, once again thought of by the rest of the financial world as eccentric.
All of that changed in the 21st century. The first decade of the 21st century proved to be the polar opposite of the 1990s. Periodic crises of both the geopolitical and economic variety rocked paper assets and brought gold back to the forefront of peoples’ minds. The price of gold soared, smashing the $1,000 mark for the first time.
The combination of failing banks, collapsing real estate values, volatility in the financial markets as well as terrorism and war prompted investors of all types to turn to gold coins once again. And their gold has served them admirably.
Today, once again, savvy investors of all philosophies are realizing the wisdom of including gold in their diversified financial planning. Some who were day trading through online discount brokers in the stock market bubble years of the 1990s are now holding gold. But so are families and retirees who just want safety and security. In short, just about every type of investor is buying gold today.
The Collector
In parallel to investors buying gold coins, collectors have been buying gold coins all along since the legalization of gold ownership in 1974.
Unlike investors, collectors buy coins strictly for their beauty and historical significance, without any initial profit motive. To these collectors, gold coins are works of art and historic artifacts from history. The number of coin collectors in America has been growing steadily for decades. Of course, only the most affluent collectors can afford to buy gold coins strictly for pleasure.
This raises an important point.
While collectors may not acquire their coins for profit, the fact of the matter remains that collections of gold coins have historically brought handsome profits for their owners and their heirs. In fact, statistically speaking, the most successful recorded performances tend to be made by collectors, rather than investors. This is because collectors know which coins to buy and buy them according to a plan.
This suggests that investors should seek the assistance of expert collectors in choosing coins.
There was a time when the only people who bought gold coins were the so-called “gold bugs.” These people were considered eccentric for buying gold coins back in the 1970s after gold ownership was legalized in the United States of America.
But by the time the 1970s were over, the gold bugs were proven to be pretty darn savvy for having the foresight to protect their wealth with gold coins. In fact, by the time 1980 debuted, the South African Krugerrand gold coin was one of the most popular investments in the world. It wasn’t just gold bugs buying anymore. Investors of all philosophies realized the value of including gold in their diversified portfolios.
Whether someone was looking for aggressive growth or preservation of capital, gold had a role to play because it could both produce profits and protect wealth from high inflation and crisis. So, basically, all sorts of people were buying gold in the period from 1975-1981.
In 1980, gold peaked at $850 per ounce and demand for gold coins also peaked. While many continued to buy gold in the 1980s, especially in 1987 in the wake of a huge stock market crash in America, overall demand for gold waned over the course of the decade and into the 1990s. This was because the price of gold stayed range-bound for extended periods of time.
Once again, gold coins became less popular among investors. In fact, at one point in the 1990s, according to a Wall Street study, American investors, on average, were negatively invested in gold, reflecting the fact that more money was placed on the short side of futures contracts than was on the long side.
In a sense, the few who were buying gold coins during this period were new gold bugs, once again thought of by the rest of the financial world as eccentric.
All of that changed in the 21st century. The first decade of the 21st century proved to be the polar opposite of the 1990s. Periodic crises of both the geopolitical and economic variety rocked paper assets and brought gold back to the forefront of peoples’ minds. The price of gold soared, smashing the $1,000 mark for the first time.
The combination of failing banks, collapsing real estate values, volatility in the financial markets as well as terrorism and war prompted investors of all types to turn to gold coins once again. And their gold has served them admirably.
Today, once again, savvy investors of all philosophies are realizing the wisdom of including gold in their diversified financial planning. Some who were day trading through online discount brokers in the stock market bubble years of the 1990s are now holding gold. But so are families and retirees who just want safety and security. In short, just about every type of investor is buying gold today.
The Collector
In parallel to investors buying gold coins, collectors have been buying gold coins all along since the legalization of gold ownership in 1974.
Unlike investors, collectors buy coins strictly for their beauty and historical significance, without any initial profit motive. To these collectors, gold coins are works of art and historic artifacts from history. The number of coin collectors in America has been growing steadily for decades. Of course, only the most affluent collectors can afford to buy gold coins strictly for pleasure.
This raises an important point.
While collectors may not acquire their coins for profit, the fact of the matter remains that collections of gold coins have historically brought handsome profits for their owners and their heirs. In fact, statistically speaking, the most successful recorded performances tend to be made by collectors, rather than investors. This is because collectors know which coins to buy and buy them according to a plan.
This suggests that investors should seek the assistance of expert collectors in choosing coins.
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