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Gold Buying and Investment Analysis

Aamir G September 10, 2016

Gold, as an alternative money is used extensively as an investment options in various countries of the world.  The investors buy gold, preferring over other precious metals just for the safety of their investment and long term returns associated. Gold markets are also subject to speculations and volatility as are markets for other instruments of investment. Diversification of risk is achieved through a investment portfolio mix by most gold buyers.  Gold buyers prefer gold as an investment to meet out the uncertainty in two risk conditions:-

  • Currency devaluation
  • Hyper Inflation

Profit earning through gold buying is also not uncommon for many investors. There are plenty of ways of making profit in a bull market but the point of sale is the deciding factor about quantum of profits from investment in gold.  It is beyond doubt that God is the only asset which can realize the real value of money based on its position in a currency.

Gold Buying and Investment Analysis

There are ways and methods to earn profits through gold buying. The trick is to hold gold for a significant period so that you are able to generate significant amount as profit. The reason given is that when you buy gold at retail prices, normally you would be paying some premium that places you buying gold above normal retail rates. And when you sells it, then retailers under having some kind of buy back policy having slightly lower rates than prevailing market prices. Therefore, you as an investor need to keep significant time gap between buying and selling gold before you can expect some decent profit which makes gold buying worthwhile and a wise investment decision.

Vehicles of Investment in Gold:

  • Gold bars
  • Gold delivery bars
  • Gold Coins
  • Gold rounds
  • Gold exchange products
  • Gold certificates
  • Gold accounts
  • Derivatives
  • CFDs or contract for differences
  • Gold mining companies

As an investment option, gold bullion is compared with stock buying option. For long term gold may be a safe asset, having value stored without much growth whereas stocks investment is regarded as growth with return on value. Stocks and bonds are preferred over gold and property for investment purpose when the political environment is stable. Gold, like other precious stones have advantages of hedging against financial crises. Further, for gold buyers, liquidity is there as it can be sold as per the need and as and when required without any hassles.

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