Since the beginning of commerce and coinage, gold has been seen as a valuable metal that has allowed trade between countries, cultures, and merchants. Even in today’s markets, Gold is a precious metal that remains critically important to economies around the world. The question is, if you’re going to start looking at gold bullion as an investment, then what do you need to know?
The Importance of Gold
Gold is a treasured metal in and of itself. Aside from being an important money maker for nations lucky enough to have abundant supplies, gold is still the most in demand precious metal for jewelry in the world. In addition to this, investment of gold tends to spike at times when the economy is uncertain, especially the U.S. economy or when the U.S. Dollar is weak.
Gold Bullion Vs. Market Gold Prices
Before investing it is important to understand the enormous difference between investing in gold bullion and investing in gold as a commodity, complete with full market movements. When you’re talking about gold bullion, that is purchasing physical pieces of gold. This often comes in a variety of gold coins that are valued based on their exact ounce weight times what the price of gold per ounce is at that point.
Market gold prices, as they are found from commodity market prices, mean you’re investing in a place in the commodities market and not in the physical gold you can hold, horde, or keep for safe keeping until you sell it back. Market gold is like investing in stock – your invested money can rise or fall based on the price of gold, and you are subject to the movement of market prices. That’s a lot of volatility.
When Should You Buy Gold Bullion?
Gold bullion is a solid investment for people who love the idea of having gold on hand because of its tangible value, want to invest for the future, but don’t have any confidence in stocks, commodities, or any of the funds out there. Ideally, the best return is to buy gold bullion when the overall economy is healthy, but you don’t think it will remain that way (gold tends to be lower when the U.S. economy is booming and higher in price when the U.S. economy is down).
This gives the best value on a return, and gold bullion can also be seen as a great long term investment because simply by rising costs and inflation over time gold will continue to be more valuable. Gold will cost more several hundred years in the future than it does now – that just makes sense.
When Should You Sell Gold Bullion?
There are a few thoughts on this. Many people invest in gold bullion for the long-term and plan on keeping it for years or decades. On the other hand, if you hit a point where the price of gold is double what it was when you first bought it, that is certainly worth considering! The other thought is that when it looks like the U.S. economy is going to go from hurting to booming, that’s a good time to sell, as well, and to sit on the money until you see how things play out. Or you even have the option of doubling up on gold bullion when the price plummets one more time.
There are many different options – but the best time to sell depends on your needs, your goals, and what your main focus is.
Gold bullion can be a great safe place to invest money no matter what the markets are doing, and the ability to hold a tangible thing of value. Look at what your options are, and see if bullion is the right step for you.