Gold Trade: Investing In Gold Bullion Bars and Coins

Did you know that if you want to make a really good profit through investing in precious metals that the only way to get a continuous income is through investing directly in the gold mines? That’s right; you can actually invest in gold producing mines and share in the profits that mine makes.

Just think about it, when you purchase gold at the store it has to come from somewhere. At the rates that this precious metal is going for today, it is simply amazing to find out that it is then mines that are making the highest possible profits. Would it not be nice to own a part in one of these companies so that you are able to share in all of that profit?

There are many different ways to invest in gold and to each investor, there is a favorite choice. Some people just purchase the certificates while other purchase actual bullion. Still there are a growing number of people from around the globe that are choosing to invest in gold producing mines. These mines can actually be found all over the globe, but in most cases they only exist in the third world countries; especially those along the equator.

One can easily invest in gold producing mines in Africa, but where else can one look? Well, Africa is not the only place with a high number of mines. There is China, and while you can invest directly there, sometimes this may be more difficult of an investment then one would want. The Philippines has a large number of mines and their gold is some of the finest raw gold anywhere in the world. Most of the gold mined out of Philippine gold mines require very little refining.

In the end, the choice is ultimately up to you, but if you want to invest in precious metals, for many investors today, choosing to invest in gold producing mines is a sure way to make a substantial amount of profit in almost any economy.

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It was back in 2004 when the exchange-traded fund or ETF was first launched. Its use of course is to track the value of gold on the U.S. markets. Versus buying real gold or even gold certificates, the ETF was considered to be a very inexpensive option for anyone who is just starting out with investments. They have since become a widely accepted alternative to the traditional certificates that were once offered in the past as well as used in place of buying and selling gold in its physical form.

There are many different ETFs that you can choose from today. One of the most popular is that of the SPDR Gold Trust which currently holds more then 659 tons of gold in its reserves. In purchasing the ETF, what you are in fact doing is purchasing a tradable share of stock that is very liquid. Each one of these shares represents only a tenth of an ounce which makes it fairly affordable too, even without the benefits of a cash advance.

The biggest downfall for the small time investor though is the fact that there are a number of things that can change the profit potential of trading in ETFs. The first of these are the fees associated with each trade. There are also the tax liabilities and the various futures that the ETF may also invest in. The later of these drawbacks stem from the fact that an ETF does not have to be based 100% on actual reserves, but can also make use of futures and other forms of investments which may increase the risk associated with their investment.

Because of the fact that one does not actually own any of the gold, they cannot claim the tax advantage as a collectible when filing for their income taxes. This means that you will have to pay more in taxes then if you made the choice to invest in real gold or gold certificates.

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For those who have a bit of experience in the world of precious metals investing, you already know that there is an amazing gold market in China. For those who are relatively new to the whole experience though, you may have known about the African investments, but not too many realize the profit potential when it comes to investing n gold in China.

Each and every single year, billions of dollars in gold are mined out of the ground, refined and then sold of to the international market from China alone. There is a whole lot of money to be made when you chose to invest in gold in China, but to do so you have to know how to invest.

We are not simply talking about gold certificates, but rather many different ways that one can get involved with the Chinese gold market. One can invest directly into the mining companies who not only dig up gold, but platinum and silver as well. These companies handle the mining and in some cases the refining processes. From there the gold is then sold off to the international markets. Goin this route allows you to share in the mining company’s profits.

Some people have the necessary experience to handle importing and exporting of many different items and you could choose to invest in gold simply by handling this part of the process. After all, the gold mined in China has to make it into your country some how if it is to be sold off for a profit.

Then again, you may opt to buy it in China and bring it home or even wait until one of the major gold trade shows to pick it up at a reduced price. Any way you choose to invest though, it is important to know that gold is a very stable investment no matter who you are.

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We are featured on an investing blog carnival on Stock Market Investing Today this month. They are a great blog full of stock market investing tips and tricks. Go ahead and visit them if you get the chance. This is the first blog carnival for investing that we have participated in, and hopefully with time it will get quite large.

The post that was featured on their carnival was one of our staple articles on Gold Trade 101 explaining the basics of trading gold and why it is a profitable venture to get into.

Next month we hope to host the blog on our site, so look forwards to some great links coming soon!

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The gold index is a chart following the rise and fall of gold prices in dollars, yen, euros, etc. over a specified period of time and intervals. It is a line graph. You may add other lines e.g. the dollar in the same chart and see the correlation between the dollar and gold. Usually the gold line will go up as the dollar line will come down.

It is excellent for technicians to use this chart over decades to try to predict how gold will be priced in the future. Sometimes they are correct, sometimes they are not. A few decades ago the Hunt bothers tried to corner the silver market and they lost heavily. I am sure before they stumbled into this venture ,they charted out silver on a silver index graph.

Technicians study the lines very closely and predict a high or low for gold in the future. It is just a guide and sometimes an international incident will throw their predictions way off. Most everyone says that gold will trend higher for the foreseeable future. Guesses on the part of the experts range all the way up to $1500 a troy ounce (gold and silver use troy ounces). You have to do your own research and use your own gut feeling. Everyone has their own vested interest in making predictions; their livelihood might well hinge on how many clients they get to buy gold. Many gold sellers are very sincere and honest and these can be found with a little research. A hint: someone who is guaranteeing a specific price for gold is not the best of those in the industry.

As of now, there are two major gold indices that many rely on: The HUI and the XAU. The Philadelphia stock exchange is where you can get up to the minute updateso n the XUA gold index. The Amex HUI gold index quite often tends to be a very profitable index to follow when prices on gold are rising. However when they are falling, the losses are equally as large. The XUA gold index however does not hedge its gold positions more than 1.5 years into the future and is comprised completely of gold mining stocks as opposed to the many other gold commodity options.

Followers of the AMEX gold index (HUI) are often called Gold BUGS. BUGS is an acronym standing for “Basket of Unhedged Gold Stocks.” Each stock in the index is equally weighted and adjusted quarterly.

One of the many ways to invest in gold is by using the HUI index to find the current spot gold price and trading options, gold funds, or gold bullion itself based on its information.

No matter what gold index you use to make your investments, it should be studied along with charts of other commodities along with a chart of crises in foreign affairs. All these charts convey a meaning and paint an overall picture for the future of the commodity. An astute analyst will be correct more often than not in interpreting that meaning.

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How Much Of Your Portfolio Should You Invest In Gold?

Gold as an investment should fill about 20% of your portfolio of investments. Stock market investing is only a start to building a secure portfolio. There is not much downside to holding gold, it will never become anything close to worthless. The only thing to be said against only holding gold as an investment is that when good times return, gold tends to drift downward. It will always remain ahead of inflation, but will not take off to astronomical heights when the economy is booming. Money will flow into equities and out of gold in boom times. That is why it is a great investment of up to 20% of a portfolio. If you had only two choices paper money or gold, naturally gold would be the choice because the fiat money can always lose almost all of its value.

At this time gold investing is excellent and you can even increase your percentage of gold holdings. Now it is far less risky than equities and if there is a coming hyperinflation gold and silver is where to be situated. You have varied choices of gold as an investment. Gold stocks, gold funds, coins, ingots, and bars. Each is a great investment. Larger bars are more difficult to sell, and there are larger fees involved when doing so. Some people want the gold close at hand in case of an emergency or national catastrophe, or hyperinflation. If this is the case purchase gold coins or smaller gold bars, in grams as opposed to ounces.

Those who want to be involved with gold investments should be aware that there is a spread between buying and selling and that is the commission that the seller makes. It works the same in all commodities and there is even a commission in equity trading. When gold rises you will more than make up for the amount. If you are experienced and have the proper guides however, you can buy gold at little to no premium and often even below current market values. You can find amazing deals on gold bullion coins and bars on eBay as well if you have a keen eye and a fast trigger finger.

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Gold Commodity Chart and the Price Of Gold Today

A Gold Commodity Chart goes under the heading of statistics. Like a chart of any commodity it shows how gold has fared in price over a certain period of time. It is set up like a grid, or more simply put with an x and y axis. Not to get overly technical, on a gold chart we would have the years, months or however you want to set it up running under the horizontal bottom line across the chart. Running north to south, or top to bottom on the outside of the vertical line on the left are the dollar amounts (or any other currency like the yen or Euro), that gold has reached in value at that particular time.

Statisticians study commodity charts and equity charts and predict what might happen based on the past. The only problem is that sometimes conditions are very different. We can compare the 1930's to now, but America was a different country back then. A big difference between then and now is that no person walks around at present with gold coins in their pockets as so many did back during the 1930's.

A Gold Commodity Chart is a math teacher's dream when teaching graphs. It would be a line graph running from left to right and heading downward when the price of gold heads down, and upwards with the rise of the price of gold. You can explain the rise and fall of gold in many ways. You can superimpose on the same chart the rise and fall of oil, of the Dow Jones, or anything else and make a correlation. In many cases a gold rise will accompany stocks falling in value, or gold rising with the commodity of oil. But, sometimes because of a disconnect between the U.S. and the rest of the world it does not hold true.

A Gold Commodity Chart is one of many tools for those charting the price of gold if you are into gold trade, trading gold futures, or looking to make a gold investment. What it tells you is all in the eyes of the interpreter.

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There are numerous ways to invest in gold. Each person has their preference, but buying gold jewelry as an investment is probably the worst option. When you buy a gold necklace, you are paying a lot for workmanship, and are paying more than you ordinarily would for the amount of gold in weight. That is to say if gold is selling for $950 an ounce, you cannot just compute the weight of the necklace and add the margin for profit. Dollars are added for the design and craftsmanship. This does not mean if you are stranded in harsh unsettled times and in need of food, you cannot break off a couple of links of gold and exchange it for a loaf of bread. But, there are far better ways to make a gold investment. Besides, few necklaces are 24 kt. gold, or pure gold.

You can invest in gold stocks as you would invest in Wal-Mart either individually or through a mutual fund, a sort of hedging by not putting all your money into one stock. The problem here is that if your stock goes up you will make money , but you will not receive gold when selling the stock.

The best method of gold investing, depending on your point of view, is to have some sort of physical possession of the product. This can be in coin, bullion, or bars. With coins you might be paying a higher spread because of its engraved design and is desired by collectors. Remember gold is not light, so it would be advantageous to have it in smaller units for quick transporting if the need arises. Gold is very valuable and if you need to make an emergency purchase you would not want to exchange a gold bar for a loaf of bread. If you do not fear an economic collapse or something to that effect, bars and other more bulky units would be the best way to invest in gold for the purpose of hedging against inflation.

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