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Gold - The Safest Investment

February 23, 2012 | Comments: 0 | Views: 152

With the World economy doomed in Recession, growing uncertainty and weakening of major currencies like Dollar and Euro, increasing Greek debt, defaulting banks, almost negligible bank interest and extremely volatile stock markets, one question comes into everyone's mind - What is the safest mean of investment? Where should we invest where the value will increase and not decrease? The answer lies in the four magic letters G O L D.

Gold is traditionally viewed as the ultimate safe haven during times of economic volatility and therefore seen as a wealth preserver. In addition it is used as a hedge against the US dollar and also is liquid, so therefore easy to sell and buy. Given that stock markets have endured some of their worst falls on record as the financial crisis hit, that the response to this was to print unprecedented amounts of money and that the dollar has been floundering, it should come as no surprise that the precious metal has been booming. The Gold prices have rocketed in last few years rising from an average of $858.69 per ounce in January 2009 to a high of $1895 per ounce in September 2011. The most traditional way of investing in gold is by buying bullion gold bars and sovereign coins.

In some countries, like Canada, Argentina, Austria, Liechtenstein and Switzerland, the Gold bars can easily be bought or sold at the major banks. In United Kingdom they are readily available at the Bullion Dealers. Bars are available in various sizes. For example in Europe, Good Delivery bars are approximately 400 troy ounces (12 kg). 1 kilogram (32 oz) are also popular, although many other weights exist, such as the 10oz, 1oz, 10 g, and 100g. For the serious and large scale investor, gold bars are a simple and efficient way to invest in gold. The larger bars are usually available at the lowest premiums.

Gold coins are the other common way of owning gold. Bullion coins are priced according to their fine weight, plus a small premium based on supply and demand.The one ounce gold bullion coins such as Krugerrands or Britannias are by far the most popular for both small investors and high net worth individuals who see the advantages of owning legal tender bullion coins, either in their possession or in depositories, and recognise the advantages of the divisibility afforded by them. Other common gold bullion coins include the Australian Gold Nugget (Kangaroo), Austrian Philharmoniker (Philharmonic), Austrian 100 Corona, Canadian Gold Maple Leaf, Chinese Gold Panda, Malaysian Kijang Emas, French Napoleon or Louis d'Or, Mexican Gold 50 Peso, British Sovereign, American Gold Eagle, and American Buffalo. Coins may be purchased from a variety of dealers both large and small.

The value of bullion coins and bars is determined almost solely by the price of gold and thus follows the bullion price. Choosing to invest in a Gold Bar against a Gold coin depends entirely upon the individuals need. Larger Gold bars have a smaller premium, however they require a lot of funding and can be more restrictive in re-selling whereas it is easier to invest in smaller gold coins as they can be bought with fewer funds and can be resold easily but then the premium is higher.

Medha Kumar runs a jewellery business which specialises in manufacturing jewellery from your old unwanted silver, gold, platinum or broken jewellery. Alternatively he will come to you and pay you the top cash price in London.

Source: EzineArticles
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