Are you thinking about selling your gold but are leery because you don't understand how it's valued? The first thing you need to understand is the spot price. The spot price simply stated is the price at which the market is buying and selling spot gold. This figure is set twice a day by the London Gold Pool. The price is determined by the law of supply and demand. The rate is then translated into Euro dollars and US dollars.
Gold is always measured in Troy Ounces. If the spot price of gold is $1000 it means that one-ounce of pure 24k gold is worth a thousand dollars at the spot level. But if you decide to sell your gold don't expect to get that much money for it. There is far more involved in selling scrap gold for cash. The best gold brokers pay on a sliding scale. Some of them will pay over 90% of the spot price. But there is a catch. You have to understand the rules of the game to realize that kind of return. There are a lot of ambiguities when dealing with scrap gold and if you're not aware of what you're doing when you sell it can cost you dearly. One thing to remember is the more scrap gold you have to sell the higher the rate of return should be.
Most people make only a few scrap gold trades in their life. If you walk into a pawnshop with a pocketful of broken gold jewelry and your not aware of the formulas, scales, and methods, used to place a value on your little treasure you could lose a small fortune and not even know it. There are a lot of other factors that enter in to making an intelligent decision when you accept a gold brokers bid. The power of gold is mysterious and confusing. Do your research before you sell scrap gold and you will come out ahead. If you wait until you're in the dealers shop to try and understand what happening you will likely end up with what you accept.
Gold is not just an ancient metal with no usefulness in today’s society. Gold’s value is also on the rise. Therefore, the obvious question is this: How do you get gold for yourself?
Gold Markets Around the World
Today, gold trades in many markets around the world. At any time of the day or night, a current market price is being established somewhere. Two of the most important world markets, however, are in London and New York. The London market is one of the oldest in the world and is the largest market for physical gold. Since September 12, 1919 the price of gold has been set at "the London gold fix" and this price is used in contract arrangements around the world. Today, the gold fixings take place at 10:30am and 3pm and provide published prices that are used as official pricing medium by producers, consumers and central banks.
The New York market opens as the second London fix takes place and gold then trades throughout the day. The New York market is particularly noted for the volume of "paper gold transactions" such as futures contracts that are traded on the exchange.
There are other important gold markets in Zurich, Tokyo, Sydney, Hong Kong and elsewhere - so gold is being traded somewhere 24 hours a day. Investment in gold can take many forms. What follows is a summary outlining various investment vehicles, their advantages, disadvantages, and levels of risk.
Gold Bullion Bars & Coins
Gold bars are offered in a variety of weights and sizes. Since broker commissions are typically low, bullion is the most cost efficient way of owning actual gold. Be sure to get gold that bears the hallmark of internationally recognized refiners so that it will be easier to sell.Another popular way to own gold and have it in your physical possession is through gold bullion coins. Gold bullion coins are actually the money of the issuing country and have a guaranteed gold content. The face value of the coin is not the true value. The true value depends upon the gold content and the price for gold at the time.
Bullion coins are minted in affordable weights such as 1/20, 1/10, 1/4, 1/2, and one ounce (about 31 grams). The bullion coin represents an investment in pure gold and, because it is legal tender, its authenticity is guaranteed by the country of origin. Gold bullion coins can be easily bought and sold virtually anywhere in the world. Prices for the most popular one ounce coins are quoted daily in most newspapers around the world. Some of the most popular bullion coins are the American Eagle, the Australian Kangaroo Nugget, the UK Britannia, the Canadian Maple Leaf, the Austrian Philharmonic, and the South African Krugerrand.
Gold coins are traded throughout the world on a daily basis as an integral part of the international gold business, so they always have a ready market, and the spread between the buying and selling price is usually quite small.
While bullion coins are normally purchased for their intrinsic value, they are also appreciated for their artistic appeal and beauty. Coins make memorable and valuable gifts, are easy to store, easy to transport, and anonymous.
Gold Statement Accounts
Gold statements are obligations of the issuing institution to deliver upon demand, a specific quantity and fineness of gold. An investment in a statement account provides safe and convenient storage and allows investors to buy gold in convenient dollar amounts.
There are two types of gold accounts: allocated and unallocated.
Holding gold in an allocated account is like keeping it in a safety deposit box. Specific bars, which are numbered and identified by hallmark, weight, and fineness, are allocated to each particular investor, who has to pay the custodian for storage and insurance. Many investors prefer to hold gold in unallocated accounts, which are similar to foreign exchange accounts. Unless investors take delivery of their gold, they do not have specific bars ascribed to them. An advantage of unallocated accounts is that investors do not incur storage and insurance charges. However, they are exposed to the credit-worthiness of the bank or dealer providing the service in the same way that they would be if they had any other type of account.
Gold Accumulation Plans
Gold Accumulation Plans (GAPs) are similar to conventional savings plans in that they are based on the principle of putting aside a fixed sum of money every month. What makes GAPs different from ordinary savings plans is that the fixed sum is invested in gold.
A Gold Accumulation Plan is set up just like most other savings accounts. The investor commits to investing a fixed amount every month, usually for a minimum period of one year, although about 90% of contracts are rolled over (extended) when the one-year term is complete. Once the Plan is set up, installments are withdrawn from the investor's bank account automatically.
The monthly amount is then used to buy gold every trading day in that month. The advantage of this is that less gold is bought when the price is high, and more is bought when the price is low, since the daily amount of money invested is fixed. At any time during the contract term, or when the account is closed, investors can get their gold in the form of bullion bars or coins, and sometimes even in the form of jewelry. Of course, they can also get cash should they choose to sell their gold.
Gold Options
A gold option provides you with the right to buy or sell gold at a fixed price at some specified future date. Investors may take or make delivery of the gold underlying the contract on its maturity although, in practice, that is unusual. The major benefit is that such contracts are traded on margin, that is only a fraction of the value of the contract has to be paid up front. As a result an investment in a futures contract, whether from the long or the short side, tends to be highly geared to the price of bullion and consequently more volatile. The cost of a futures contract is determined by the "initial margin", that is the cash deposit that has to be paid to the broker. This is only a fraction of the price of the gold underlying the contract thus enabling the investor to control a value of gold that is considerably greater than the cash outlay.
Futures contracts are traded on regulated commodity exchanges, the largest of which are the New York Mercantile Exchange Comex Division and the Tokyo Commodity Exchange.Gold options give the holder the right but not the obligation to buy ("call option") or sell ("put" option) a specified quantity of gold at a pre-determined price by an agreed date. The cost of such an option depends on the current spot price of gold, the level of the pre-agreed price, known as the "strike price", interest rates, the anticipated volatility of the gold price and the period remaining until the agreed date.
Mutual Funds
A number of mutual funds and investment trusts specialize in investing in the shares of gold mining companies. The appreciation potential of a gold mining company share depends on market expectations of the future price of gold, the costs of mining it, the likelihood of additional gold discoveries and several other factors. To a degree, therefore, it depends on the future earnings and growth potential of the company.
Most gold mining equities tend to be three to four times as volatile as the gold price. While they are subject to the same risk factors that influence the prices of most other equities there are additional risks that are specific to the mining business generally and to individual mining companies specifically.
With gold mutual funds, you are buying general market risk instead of company-specific risk. Mutual funds diversify their holdings among dozens of companies. Some funds offer a broad mix of international mining stocks, while others invest in specific regions such as North America, Australia or South Africa.
If you are planning to have gold as part of your portfolio, you will undoubtedly have it in one of these many ways. Determining which way is right for you is a matter best discussed with your broker or financial advisor. Regardless of the path you choose, always remember to diversify!
Indian gold jewelry is also famous for its beautiful designs all over the world. The intricate designs for all kind of gold jewelry are the result of the best craftsmanship. Another major part of the cost for a piece of gold jewelry is the cost for labor, especially for pieces set with precious stones. 10K gold is the minimum karat that can be called "gold" in the United States. Gold Jewelry is the easiest of the gold to buy and has the enjoyment of being able to be worn. Gold symbolizes riches, wealth, and good standing, and in its purest form, is impossible to tarnish. Gold jewelry is sophisticated and refined, and is a divine and precious metal that is perfect for all occasions. Pure (24-karat) gold can sometimes be too soft and malleable for everyday wear. Therefore, gold jewelry is usually complemented by a mixture of other alloyed metals (such as silver, copper, nickel and zinc) to help it retain more resistance and strength.
The use of gold is preferred over other metals, the reasons for this is because gold is very flexible, the color is incredible and it looks good with almost everything. When wearing pure gold it will not tarnish like silver or other metals, there is a small chance that people are allergic to gold, so it is a great metal for jewelry. However, gold can be made into jewelry of different and exciting colors by adding different metals to it. Many religious jewelry have been created out gold, going back to the beginning of man you will find many pieces crafted out of gold. Very few people invest in precious metals, in comparison to the amount of people in the stock market. The most well-known precious metals are gold and silver, in addition to platinum and palladium (a by-product of platinum).
The best things that makes gold worth its name are the characteristics of gold is its malleability and ductility, making it the best metal to work upon. With the internet gaining popularity the online jewelers are able to sell gold and other metals at discount prices. It is important to realize that the color of titanium jewelry is not a paint or added coating. Through an electronic oxidation process jewelers can actually change the crystalline structure of the surface of the metal. Jewelers can convey their very best craftsmanship on this metal. This is a wonderful metal because it is a bright white color, very similar to platinum, but has a much lower price. When working with a jeweler they have the ability to make many different designs. So if you have something in mind the jeweler can make the piece you want a reality.
If the gold jewelry is to be worn everyday, make sure it is between 14-18 karat gold. (The karat measurement denotes what percentage of the gold jewelry is made of pure gold. A good way to analyze if a certain style of gold jewelry is profitable and beneficial for a business is to understand your competitors prices.
I get more emails, letters and phone calls about gold than anything else. An almost religious fervor seems to go along with being a gold bug. My bearish view on gold usually comes as a shock to worshipers. Yet year after year the precious yellow metal refuses to reach for the stars like it is supposed to. Why is this?
The most common belief by gold bugs seems to be that everyone will flock to gold as the ultimate hedge against inflation, international crisis, currency collapse and all other things apocalyptic. The latest global credit crunch may well be the trigger that finally brings about the demise of the US dollar, and when everyone finally loses faith in paper money, stocks, bonds, real estate, governments and central banks, gold will be the one last haven of security. Better to buy it now before the price explodes and we are talking about gold in terms of thousands of dollars an ounce instead of hundreds. The Fed will try and print their way out of trouble, which will cause hyperinflation, and Uncle Sam will be happy because his skyrocketing debt will cost less to service. The only asset of real value will be gold, which is finite. Panic driven demand will push the price beyond anything we have even thought of.
Sounds familiar? Only problem is I think it’s dead wrong. If you want to pay the current price of around $660 an ounce, by all means do so. But I believe you will be paying three or four times too much for it.
Don’t get me wrong. I am a gold bug at heart. Yes, I can see the day when gold will be thousands of dollars an ounce. But not before it falls to less than $200 an ounce.
In my book and newsletters I have used charts to explain the main reason for my bearishness on gold in the short to medium term. Every five wave move is corrected in three. Waves follow form, not the clock. Gold has been in a bear market for 27 years since its $875 high in January 1980 and it is far from over. The $740 high in May 2006 was only wave B. Not until wave C is complete can gold enter a new bull market.
Now what about the likely economic backdrop to the technical picture I have painted? Well, the title of my book is “How to Profit from the Coming Great Depression.” So that probably indicates where I see the economy in the future.
Every depression in history has been accompanied by DEFLATION, not INFLATION!
(Another one of my articles deals with this subject).
The technicals and the fundamentals match. Gold does not like deflation. In a deflationary period, cash is king. So what if the US dollar falls against the euro or the pound or the yen? Why will that concern you if you earn your income and spend it in US dollars? You will only be directly affected if you are transacting in those other currencies. Yes, eventually import prices might rise. But for quite a time that will be more than offset against discounts everywhere as shopkeepers try desperately to keep the doors open. With each price drop your dollar buys more. Why would you want your money in gold, which pays no interest and is falling in value?
Don’t worry, when I think the time is right to buy gold I will be screaming my lungs out (well, maybe my keyboard). But that time is not now. Even in the near future I can see gold falling below $500 an ounce. And yes, this should coincide with a rally in the US dollar. And don’t forget: In 2001 I was screaming out my recommendation to buy gold when every man and his dog had cast it to the scrap heap. The gold price rose from not much above $250 an ounce to almost $750. I am not always bearish on gold. It’s just that, like any other asset, there is a time to buy it and there is a time to sell it. Now is not the time to buy it, in my opinion.
Gold is dense, soft, shiny and the most malleable and ductile of the known metals. Because of the softness of pure (24k) gold, it is usually alloyed with base metals for use in jewellery, altering its hardness and ductility, melting point, color and other properties. Native gold contains usually eight to ten percent silver, but often much more alloys with a silver content over 20% are called electrum. Although gold is a noble metal, it forms many and diverse compounds. High-carat white gold alloys are far more resistant to corrosion than are either pure silver or sterling silver. Gold jewelry is usually sold at 18 karats, but 9 and 14 karat gold jewelry is also very popular.
Gold may have been the first metal used by humans and was valued for ornamentation and rituals. Gold is also mentioned several times in the Old Testament, and is included with the gifts of the magi in the first chapters of Matthew New Testament. The south-east corner of the Black Sea was famed for its gold. Gold has been associated with the extremities of utmost evil and great sanctity throughout history. Medieval kings were inaugurated under the signs of sacred oil and a golden crown, the latter symbolizing the eternal shining light of heaven and thus a Christian king 's divinely inspired authority.
The price of gold is determined on the open market, but a procedure known as the Gold Fixing in London, originating in September 1919, provides a daily benchmark figure to the industry. In various countries, gold is used as a standard for monetary exchange, in coinage and in jewelry. Although this is certainly not a professional way of examining gold, the bite test should score the gold because gold is considered a soft metal according to the Mohs' scale of mineral hardness. The purer the gold the easier it should be to mark it.
Yellow gold is not the only gold jewelry available, gold jewelry can come in a variety of colors depending on various factors, which make up its composition. Although yellow gold remains popular one should consider purchasing a variety of color.
White gold is an alloy of gold and at least one white metal, such as silver or palladium. While some higher quality white gold alloys retain their shine and lustre, most will be coated with a very thin layer of rhodium. Like yellow gold, white gold is measured in karats. Rose gold is also known as pink gold and red gold. Since it is an alloy, there is no such thing as "pure rose gold"; pure gold is yellow and pure copper is reddish. 18 karat rose gold may be made of 25% copper and 75% gold. It is produced by various methods, such as electrodeposition using black rhodium or ruthenium; plasma assisted chemical vapour deposition process involving amorphous carbon; and controlled oxidation of carat gold containing chromium or cobalt.
Black gold is a type of gold used in jewelry. Unfortunately, black gold is very hard and making jewellery out if it usually necessitates using previously-made melting forms When buying Gold jewelry it is important to ensure that it is valuable. Like gemstones it is wise for a buyer to obtain proper certification so that there can be no doubt about its authenticity. A genuine jeweller will have no problems with providing you with such certification and some online retailers will provide certificates of authenticity automatically.
