Gold Investment 101

Making investments is among prime actions that individuals engage in if they want their money to keep growing. There are various ways of making investments that you can take advantage of. Gold investment is one of most intriguing and widely discussed   forms of investing is.

Gold investment basically means using mineral gold to your investment assets. It is a practice that is done by people who are financially conscious and always on the look out for better future. Purpose of investing in gold is that it provides excellent opportunities for cycling money and to have it increase with time.

Investing in gold is for people who are brave enough to risk their money. This is not for gold alone because investing in any kind of thing. You need to make strong decision when putting your money in gold and guard it when it grows.

In most instances, gold investing is in the form of:

  • Coins
  • Gold bars
  • Certificates
  • Accounts
  • Mutual funds
  • Gold ETFs

coins for investing purposesThe reason why gold has many investing options that attract financially conscious people to place large amounts of money in these types of investment is its price. Gold price is very high than that of other minerals or other forms of gem. Another reason that attracts people to invest in gold is because it is a commodity with ready market among other people. Many people want to have a piece of this precious metal and this is why it is one of highly produced materials.

People who are involved in gold investment usually do some analysis of companies like Regal Assets in advance to identify to identify whether they would gain meaningful benefit or not. There are some useful pointers you should take note of to understand if gold investment is profitable and reasons why it may not be beneficial.

The advantages of investing in gold include

  • The value of gold is stable from one year to another and is not affected much by inflation rates
  • Gold is used as collection or as jewelry which can be sold to the jewelers
  • It is a safer alternative to invest in property since if prices come to point of decrease, there is higher chance of stabilized gold price and rate within short time.
  • Since pricing for gold is done according to rate of US dollar, its value will always increase when dollar exchange rate increases.

The challenge of gold investment is to safeguard it from mishandling. Gold is precious metal that might be easily harmed or tarnished during transfer. This means that a bit of its value is lost.

It is therefore up to investors to look at the benefits and risks of gold before making a decision. However gold like other forms of investment is not for the people who cannot take a risk. It is an activity for the people who have the will to go beyond their regular investments and move to elite investment. Gold is rather reliable especially in recent times when its value has been stable.

You can read GLCQ gold IRA review here.

Gold for long term investment

Before you buy gold, it is essential to the type of gold you want to buy and if it conforms to your risk appetite. There are some online trading platforms that help traders go through client suitability test that will determine their risk appetite.

Although there is high demand for the yellow metal, investing is some types like gold future is risky. Gold futures have higher returns but the risk of a loss is very high for investors. For gold purchase, it is wise to seek help from a gold dealer or stock broker who understands performance of gold ETFs and other funds.

How To Test Gold For Purity?

Gold investment can be in various ways although investing in bullion is a wise choice for your investing plans. Gold jewelry is also an investment option. The main difference between both is that jewelry has to be crafted.  Some people view jewelry as an advantage over bullion because they can use as an investment and as fashion but that depends on your investment reasons.

No matter your choice purity of gold is something that you should look out for before you spend your money on your chosen investment. Most of the time, jewelry is made using gold that is combined with other metals.    Investing in gold is costly than many other investments therefore knowing real purity of gold you plan to buy is mandatory.

Most people imagine that they will find purity of gold stamped on gold itself makes gold investment easier. The reality is that there is some especially for gold jewelry which has inaccurate carat stamps. This means numbers stamped on gold is not exact number of carats. Sometimes, this inaccuracy increases the possibility of buying gold that is illegitimate. The solution to not knowing about real amount of carats in gold or possibility of buying fake metal is to test it for purity.

The following steps guarantee you of getting real gold for gold jewelry

Find carat stamp

Start by examining the gold by searching for amount of carats stamped on gold. Although the carat stamp could be inaccurate, it is still an important part examining gold for purity. You do this by looking for number that ranges from 1-24.  Behind the number should be k, for instance 18k. This number is important as it is what will enable you to choose the right needle and acid to use when you begin testing gold for purity.

Obtain a gold testing kit

Gold testing kit is important because it will help to safeguard your gold investment from being spent on fake gold. With this kit, you can test your gold using these 3 gold testing products.

  • Touchstone –a black stone like jasper or basalt
  • Gold test acid
  • Gold test needle

All the 3 products are found in standard gold testing kit. The kit is readily available in shops that specialize in gold products.

Test Needle and touchstone procedure

After buying the gold testing kit, you have to start by selecting right needle according to amount of carats that can be found on the gold. For instance 18K gold will need an 18 K gold needle. The 18K gold test needle resembles 18K gold piece or any other that you chose for buying. This means that it has similar effect on touchstone as 10K gold piece.

You start the testing procedure by scratching the needle over touchstone. Do not use excessive force but the scratch should be hard enough. After that, pick the gold piece to be tested then scratch part of it over touchstone just next to scratch made using the test needle.

testing-gold-for-purity

Using gold test acid

Pick up right gold test acid according to number of carats that are stamped on gold you need to test. For instance, for 10K gold piece, you will require to use 10K gold test acid.

After that you should drop one or two acid drops over scratches you made using test needle and gold piece. Check how these scratches react to acid that you dropped on them. You gold   is real and number of carats stamped on it is genuine of gold purity if there is similar reaction for gold piece scratch and test needle scratch. You can then proceed with your buying your gold for investing with proven purity.

If there is different reaction to both scratches, you need to use other test needles and acid in gold test kit to determine real purity of the gold piece.

How To Invest In Gold Jewelry

Many investors choose coins, bars and bullions when they want to invest in gold. However, there are some investors who opt to put their money at places where you will not find majority of people. You can invest in gold jewelry.

investing in golden jewelryBuying gold jewelry a form of investing in gold bullion also attracts a sizeable number. As we all know, gold jewelry is something you can purchase at many stores all over the globe therefore does not have complexities of investing in other types of gold sold only at specific markets. The advantage of gold jewelry is that you can buy it for both fashion and investment.

The real set back with acquiring jewelry for investment is that it often costs higher price to buy gold bullion because jewelry needs to be crafted. Because of this, you must be careful so that your investment does not cost you too much. You should start off by comparing prices at different shops so as to get with fair price.

Gold bullion vs. jewelry

When you plant to buy gold for investment purpose, you must first decide whether you want to have it as pure investment or for personal like when you buy jewelry.

If you plan to invest large amount of money, the best choice would to buy gold bullion. It is not always possible to have a lot of money for investment. Jewelry is a good choice if you only have money for smaller investment.
Your gold investment can also be in both bullions and jewelry. When you choose to invest in both, you should have a safe place for keeping the gold such as a home safe or bank safe deposit.
When you decide to buy jewelry for gold investment, you must consider the following:

Purity of gold jewelry

The main thing you should look out before you buy jewelry is how pure is the gold on it. In most instances, jewelry is made using gold that is mixed with other kinds of metal. You should therefore be enlightened on ways of determining gold purity.

Gold coated jewelry

You should be aware that most of the so called gold jewelry you will find is either gold coated either plated or filled. Coated jewelry is not recommendable for investing in gold simply because gold will wear off with time. Gold filled jewelry is mostly made of cheaper metal. Only the outer layer has gold. Gold plated jewelry may be made of gold but the layer is very thin and like gold filled jewelry, it does not have much endurance. Gold plated jewelry is what is also referred to as “gold washed” jewelry.

Solid gold jewelry

Solid gold is the best buy when you want jewelry to be an investment. Solid gold means that jewelry is made out of 18 K gold or higher. Gold jewelry is rarely made out of 24K gold (pure gold). It exists but it is very rare to find. Investment in solid gold jewelry is advantageous as it hardly wears off even with regular wearing.

It is friendlier to human skin like gold coated jewelry because it is out made out of cheap metals used for making gold coated jewelries. When shopping for solid gold jewelry, you should always make sure that it is real unadulterated gold by checking whether it has a gold mark on it.

When you plan to buy gold jewelry, it is smart to compare its price with actual daily price at gold market to know the actual worth of the gold inside jewelry. That way, you will know how much the gold investment will cost you on top of actual price of gold. The additional cost caters for crafting of jewelry and additional metals that may be crafted on or inside jewelry.