Investing in Gold
Fundamental Reasons for Investing in Gold Gold can be regarded as having many aspects, as a precious metal used in the jewelry industry, as an asset to state the welfare of the owner, and as a commodity traded on the COMEX, this form being used for investing in gold. Investing in gold has always been a preferable way to transform capital, a popular form of trading, and in times of crisis more and more investors choose this way of keeping part of their assets, mostly because it inspires a sense of safety. This is the main reason for which investors turn to investing in gold, which resides from the distrust shown to international currencies, like the US Dollar and the Euro. Individuals, when investing in gold, they do it for the long term, in order to prevent the effects of financial crisis to affect their assets, or they perform investments on the short term. These are in general big dealers that transact on the spot market and are profitable from speculations regarding the evolution of the gold spot and of its price.
Investing in Gold in the Physical Form Investing in gold by choosing its physical form comes with two options: coins and bars. Gold coins are more affordable when compared to bars; therefore they necessitate a smaller capital, also because they come in different denominations. Furthermore, they create diversity and can represent an extremely affordable way of investing in gold whereas their premium increases together with the gold spot price. The most traded bar on the spot market as a form of investing in gold is the kilobar, it weighs 1000 grams. It is also used to perform transactions between banks. In what concerns bars made of gold one rule applies: the larger the quantity the smaller is the premium, which is added to the gold spot price. Gold bars are mainly used for investing in gold for the long term or for daily transactions on the spot market.
Investing in Gold in the Non-Physical Form In the non-physical form of investing in gold we should firstly mention futures and options, which are derivatives, a popular way of investment for the investors that are passionate about trading and have made from it their occupation. It is more risky to choose this form of investing in gold than sticking to the physical forms of investment. Another highly preferred option of investing in gold is represented by gold mining stocks. In what concerns this form of investment, one advice should be given: investors should not concentrate their attention on a portfolio comprised of only one company, diversity is the concept that applies to this form of investing in gold. Currently, we could describe the gold market as a bearish one because the gold price has slightly decreased. However, the oscillation should be made towards a bear market, which will show that investors profit from this slight decrease to invest more avidly. It would be the right decision because the gold spot price is predicted to return to its normal parameters. Therefore, it will be on an ascending path so investing in gold at this point will bring a considerable profit in the future.
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