Investments in gold have been estimated for a long time - the ancient Egyptians 5 thousand years ago made jewelry from yellow metal, and in the VI century BC. the first gold money appeared. Traders sought to create a standardized currency that would simplify the relationship in the market. The value of gold products was recognized all over the world, the answer was obvious - these are gold coins.
After the appearance of gold money, the importance of this precious metal continued to grow. At different stages of development, the largest empires introduced the "gold standard":
- The UK developed its own currency based on metals - pound, shilling and pence cost equivalent to the amount of gold (or silver) in them.
- In the 18th century, the US government set a metal standard - each monetary unit should be backed up with precious metal - for example, one US dollar was equal to 24.75 grains of gold. That is, the coins that were used as money represented gold, which was stored in a bank.
In the modern world, gold is no longer supported by either the US dollar or other currencies, and still has a huge impact in the global economy. Gold is not in the forefront of everyday transactions, but the reserve balances of national banks, large financial institutions such as the International Monetary Fund, are kept in gold.
Investing in gold - the pros and cons
Gold looks stable from the point of view of investing in it, unlike currency, but many are wondering whether it is worth investing in gold, and what is the benefit of this investment. Until 2011, the value of this precious metal was growing at a good pace, but with gold there was a collapse. Now the price has stabilized (ranging from 1200-1400 $ per troy ounce), investors are still considering whether the price of gold will increase and whether it is profitable to invest in gold.
Investments in gold are pluses
"Golden" supporters believe that gold is a good insurance against currency devaluation and a safe haven for investors in times of global turmoil. The advantages of investing in gold are obvious:
- This is a highly liquid asset, it is easy to sell.
- Gold is stable, tk. does not depend on the economy or currency of any country, is a defense against inflation, will never depreciate.
- Gold storage does not require special conditions.
- Metal does not spoil.
Investments in gold - cons
Investing in gold is definitely not the way to rapid wealth. Gold deposits will be able to protect against strong inflation, but they will hardly increase the total capital, if it comes to short terms. The disadvantages of investing in gold are:
- There is no permanent income - many prefer to invest in business and economic development, and not just store money in a safe. There is an opinion among financiers that if everyone invested in gold, the economy would not develop.
- A wide range of volatility means that even a slight decrease in price will lead to significant losses in the sale, when it comes to deposits for a short period.
- High spread - the difference in price when buying and selling is great. To get a good profit from the sale of gold, you need a significant increase in its rate.
- You can not, if necessary, spend it - with gold you will not go to the store, you will not pay the loan. It can happen that you have to sell gold assets at the wrong time, and lose large amounts.
How to invest in gold?
Investments in gold are often used to diversify the investment portfolio for insurance purposes - as long as the exchange rate falls, and states release more and more paper money , gold rises in price. How to invest in gold to not only ensure the safety of assets, but also to benefit? First, you need to figure out which options for gold investment exist.
Investments in gold bars
Investment gold bars are the preferred form of investment in this precious metal for financial institutions, the state and those who have a lot of money. The reason lies in the fact that the purity of gold in bars should be more than 99.5% to qualify as an investment class, and the weight - high, from 400 ounces, that is, 1 kg.
Pros of investing in gold bars:
- the lowest price for physical gold;
- are produced by reliable mints or large oil refineries.
Minuses:
- it is difficult to sell because of pure value;
- It is risky to keep a house;
- It is inconvenient to use for transactions of small and medium size.
When investing in gold bars, it is necessary to take into account a number of nuances:
- bank ingots are subject to VAT, when selling gold, the tax is not refundable;
- if you do not take the purchased gold bars from the bank, the value-added tax does not apply;
- banks themselves set prices for ingots;
- not always a bank that sells gold bars, redeems them back;
- the price of one gram of gold in a small ingot is higher than in a large one;
- damage to the appearance of ingots leads to lower prices;
- You can sell the bullion to a bank, a pawnshop or an investment organization - not to any individual at will.
Investing in gold coins
Another way to preserve and increase your capital is investing in gold coins. Coins are divided into three types:
- memorable - are issued in limited edition;
- Investment - represent a round gold bar with a marking;
- Antique - have in the appendage of historical value.
The most expensive coins are antique. To make a successful purchase, you need to be an excellent specialist, then there is a real chance to get a good profit. In addition to the value of physical gold, antique and commemorative coins have a collection value that grows with the years.
Investing in gold jewelry
Investing in gold is not limited to gold coins and ingots. Invest in jewelry. For example, in India, this is one of the best ways to invest in gold - jewelry in this country is in high demand, and the cost of creation is lower than in other countries. But throughout the world gold jewelry is in demand among investors:
- they are easy to transport;
- if necessary, you can donate;
- you can sell at a higher price, making a bet on the personal preferences of the buyer.
Investments in gold mining
Buying shares of gold mining companies is another way to invest money in yellow metal. If the price of gold grows, naturally, "producers" also benefit. Such long-term investments in gold have their risks - if prices do not go down, then something can go wrong inside the company. It should be noted that this option of investing in gold has a significant advantage - a high probability of huge profits, especially if it is a question of companies that are actively searching for and developing new deposits.
Investments in gold - books
Books about investing in gold will tell in detail about all the nuances of this way to strengthen their welfare:
- All about investing in gold . The author John Jagerson helps investors to invest and allocate their funds. His book is a practical guide for "gold" investors.
- Guide to investing in gold and silver . Michael Maloney, the author of the book, regards investments in precious metals as the best options for investing money, he shares his secrets, how to get the maximum profit and recognize the best "golden" deals.
- The ABC of gold investing: how to protect and build your wealth . The book of Michael J. Kosarez so far can only be read in the English version - The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold, it's worth it.