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The Rising Importance Of Gold Bullion Investment In Today’s World

Written by Mike

Topics: Investing

The Rising Importance Of Gold Bullion Investment In Today’s World

The world economy is going through a troubled patch today with inflation rates reaching astronomic heights and no solution currently in the horizon. Markets all over the world are facing large volatility making investments into mutual funds and equity shares an extremely treacherous proposition. Fixed deposits and government bonds are safer but yield a relatively lower income which is not enough to combat the rising inflation rates. Under these circumstances, many people are adding gold to their portfolio in an effort to hedge inflation related risks in the longer term. There are more than one ways in which you can invest in gold and buying gold bullion is one of the most prominent among them.

What Exactly is Gold Bullion?

Gold bullion is gold in the form of bars or coins. For bars the purity is often kept at a minimum of 99.9% which means a gold bar from an authentic dealer is guaranteed to be of 24karats. While making coins some mixture with other metals is required for durability but the purity typically does not go below 21.6 karats. There are a number of series in gold bullion, some of the famous ones being Krugerrand, American Eagle, American Buffalo, Chinese Panda, and the purest being the Canadian Maple Leaf with a purity ratio of 99.999%. Weight of the bars usually range from 1oz to 400oz (1oz = 1Troy ounce = 31.1034768 grams). The typical weight of a gold coin is 1oz. The heaviest gold bar ever manufactured is of 250Kgs and it is currently owned by Mitsubishi.

Benefits of Gold Bullion Over Other Forms of Gold Investments

The best part of investing in gold bullion is that you will not be burdened with the extra value on the artistic component which is common in jewelleries. Many people prefer to buy gold equities such as Agnico-Eagle mines. But these stocks do not always move according to the current market price of gold and have a greater chance of getting under-valued or over-valued at any given point of time. Gold ETFs are a good option but to invest in the same a first-class understanding in trading is a must. Main disadvantages with physical ownership are storage and liquidity. However there are some gold banks that store your gold for you and charge a monthly fee that is deducted from the value of your gold. And if you are investing gold bullions for the long term, then liquidity should not be a hitch to you.

How to Acquire Gold Bullions?

There are a variety of authentic dealers all round the world that you can contact to buy your gold bullion. If you are set to take a physical delivery, make sure to invest in good security measures to prevent any loss or theft. Also it might be wise to prefer insurance on your gold deposit. Gold bullion is commonly sold in the market with the spot price and a premium over the spot price. The premium applied on the gold bullion is inversely proportional to its size. To avoid paying higher premiums, it is better to buy larger size bullions but it will bring on a greater cost of transport, security and storage. Considering these facts, it might be ideal for you to invest in medium size bullions drawing the best of both worlds. However, studies point that investing in larger size bullions can prove to be more favourable than smaller ones.

To buy gold bullions online, eBay can be a trustworthy site. But the main issue is that eBay does not deal directly but acts as an online mediator between buyers and sellers. Hence, it is advisable check the background of the dealers registered with the site. Although, registered dealers in eBay are generally authenticated, still better be safe than sorry. Investing in bars is always preferable due to the lower purity percentage of coins. But in case you have decided to buy coins make sure you stay off the old collector coins as they may cost a lot more when compared to market price due to their historic significance.

Gold has provided security and wealth to its owners for thousands of years now. It is still valued as the highest form of investment that can retain its value irrespective what is going elsewhere in the world. Looking at gold’s rich past and dominating present, it is only prudent to invest in gold bullion to secure your future. 

“The Rising Importance Of Gold Bullion Investment In Today’s World” from Daniel Roberts. Daniel is a personal finance expert who blogs about precious metal investment topics and currently works for Regal Assets. Regal offers a wide variety of investment opportunities including Gold, Palladium and Silver Bullions. 

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