Gold has always been the most precious metal in the world. Although there have been other metals that are more expensive than gold like platinum, but the importance of gold has dwarfed their presence. The importance of gold is evident from the fact that the currency value of every country is determined through its gold reserves. Similarly, people buy gold as the safest form of investment. This immense value of gold is thus the fuel that runs the world economy.
Gold buying is nothing short of an art form. Although anyone can buy gold and millions do it on a daily basis, it is not a very easy process. You would say that anyone could go to a jeweler or gold market and buy gold, right? Yes, that is the simplest way of buying gold, but what about huge quantities of gold. A purchase of mere 10 grams of gold would not bring you to a profitable position. You will have to buy at least 100 grams to 200 grams to secure your investment for the future.
Private individuals regularly buy gold from the open market. They do so in a number of ways. As mentioned above, the easiest way is a purchase in the open market. However, this is not good in all situations.
The prices of gold change on a daily basis and gold dealers want to maximise their profits. If you buy a jewel set of gold and think that you have made a good investment, think again. The better option is to research a lot before buying gold. The biggest factor that can affect your decision is the current cost of gold in the global market.
The cost of gold depends on many things with the most important being the geo-political situation. During wars and tensions between countries, the prices of gold shoot up as people want to secure their assets. On the contrary, gold prices see a decline during peace times. Fluctuating gasoline prices also play an important role in the global prices of gold.
If you have made your mind to buy gold as a form of investment, do two things. First, try to survey the local rates of gold in your area. If they are affordable, then you can buy some as per your budget and future needs. Otherwise, it is recommendable to wait for some time until the prices come down.
That is necessary because buying gold at extremely high prices can have very severe consequences. People bought gold during the second Iraq war as they thought that it would last for many years. However, the prices of gold did not sustain the surge and came crashing down after a few months. Thousands of investors lost billions of pounds worth of gold during this episode.
There are of course risks in any investment and you have to be prepared for any losses. The best tip for gold investment is patience. If you can wait for a couple of years and have some extra money to spare, then gold is the best investment option.
Learn How to buy gold in the recession times.
Jack Wagon is a gold smith. You can know how to buy gold bar and save money.
By Jack Wogan