Buying gold in the form of bullion bars or coins can be a good investment and a simple process for an investor looking to add to their portfolio. There are many reasons to buy gold but one of the most common is as an insurance against a potential financial crisis. In times of economic hardship, people can rely on gold and other precious metals to retain their value so that they do not lose any of their accumulated wealth. Some investors see gold as protection against the possibility of very high inflation which could result in serious losses. Gold has been a valuable form of money for much of human history and there is little danger of it losing its demand in spite of a lack of day to day use in modern times. Buying gold bullion can simply be a sound investment or it can also be a way to survive tough economic times.
Reasons for Buying Gold
Bullion is a bulk kind of gold that comes in a very pure form with typically a minimum of 99.5% purity for gold bars and 90% purity for bullion coins. The value of bullion is determined by the value of its precious metals content which is defined by its purity and mass. Gold bullion is used by investors to store their wealth in its most valuable form or to trade regularly on commodity markets. Physical gold bullion is often viewed as an investment that will act as a hedge against currency risk, inflation risk and geopolitical risks. If the dollar or other local currency drastically reduces in value or prices increase to an all-time high then gold will be a more valuable commodity to have in stock. For most investors though, gold is not purchased solely as a safeguard against financial emergencies but more as a way to add diversification to their investment portfolio. Gold is a sound investment because it has been considered a store of value for thousands of years and this status is unlikely to change in the near future.
Forms of Bullion
Investors looking to buy bullion gold can purchase bars or coins from a registered dealer or an online company. Prices for gold bullion bars or coins can vary from place to place and each dealer will add their own fee above the actual gold value. Investors need to search around for the best price depending on the amount and type of gold that they plan to buy. People buying gold bullion bars typically have more money to allocate to their gold investment and are looking for something large scale for their funds. However, the smaller amount of gold that you buy can mean a higher cost per ounce or gram. Because of fabrication costs and other factors, a one or half ounce bar can cost twice as much as the value of gold. Larger bars will have a cost closer to the actual value of gold so investors with the available funds often purchase large gold bullion bars for a better price. Investors need to determine the actual price of gold in order to find the best price to buy from a dealer.
Gold Investment Strategies
People investing in bullion gold need to have a strategy that will put them at the least amount of risk and also allow them to make the most profit. The best way for investors to save gold is to start accumulating it at regular intervals rather than making one large purchase on their first investment. Buying too much gold from an unknown dealer can be a risky decision and one that could lead to losses. A more common and effective strategy is for investors to buy a smaller amount of gold each month regardless of the price and begin to build up their gold investment. Although the price may fluctuate during each buying period but ultimately the value of the investment will even out and rise in the long term as the value of gold goes up against the value of currency. Investors also must decide how much of their overall portfolio they would like to allocate to gold in relation to other types of investments. It is common belief that gold should represent 10% of your investments but many people are now advocating for something more like 20 or even 30% depending on their level of concern about the economy.
Making an investment in bullion gold is considered a wide decision for people looking to diversify their portfolio and protect their wealth against future economic uncertainty. Gold is a form of wealth that is always rare and valuable and bullion is one of the purest forms of gold. Saving up gold or trading it on the commodity market can increase existing wealth and provide a secure and stable future for investors.