How To Invest In Gold
A very diversified investment portfolio has a minor opening for a position in gold. Some people think that investing in gold means buying gold coins, usually South African Kruger Rands, which are one troy ounce in weight. Other speculators buy gold futures on the commodity exchange.
However, futures contracts are tremendously risky because you are gambling that the price of gold will rise or fall in the future. The contract itself takes a relatively small up front payment, but you will have to put up guarantees called margin to take care of daily changes in price.
The reason investors are interested in gold at the moment is because often in the past, when the stock market is down, the gold market is up. Weakness in the dollar usually brings a surge in the price of gold too.
Another route to investing in gold is through stocks and precious metal funds, which can be purchased through a stock broker. However, you will need to select your stockbroker very carefully, because this area of investing takes highly expert knowledge.
The following suggestions are meant as examples only as you will want up-to-the-minute information, if you are thinking about investing in stocks, shares and funds. One of the names that will come up in any investigation is Agnico-Eagle Mines, which trades on the NYSE and the Toronto Stock Exchange under the ticker AEM. They have 30+ year history in the mining of gold and In that time, they have produced 4,000,000+ ounces of gold.
Gold has made massive profits for investors in gold since the late 1970′s. However, the secret to making money from gold is knowledge of the different resistance points in the price and the assessment of the worldwide market for the use of gold. It is used primarily in jewellery and electronics and some other types of manufacturing.
The largest markets for gold jewellery is India and other Eastern countries. China’s new-found prosperity is also having an effect on the markets, although manufacturing is still of leading importance there.
You will have to have a good stockbroker or consultant, because the gold market is so complicated. If you are speculating on gold as a hedge against a vulnerable dollar, you are taking huge risks and you will have to to watch for any increase in the dollar like a hawk. A pretty shrewd approach is to set yourself reasonable goals. For instance, are you content with a 10% profit or are you going to wait for a 25% gain?
Gold can be affected by seasonal events. Check out when people in India get married. It is seasonal and around Christmas time. Then St. Valentine’s Day is a realistic influence too, but you or your adviser will have to examine the trends and the graphs.
You can get into gold mining stocks for fairly small money, but it is not the cost of the share certificate that is important, it is the yield on those shares. Be on your guard with small mining companies, because the expenses of exploration are ruinous. Likewise, profits on hitting a big seam would be wonderful for a small company.
Owen Jones, the writer of this piece, writes on many subjects, but is currently involved with Clogau Welsh gold. If you have an interest in wedding rings too, please go to our website now at White Gold Claddagh Ring
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