A little bit about gold, and investing in it
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Ok, so what's the deal with Gold. I normally write about silver. The numerous reasons and ways to buy silver. Well, one of my international readers asked me what my thoughts were on Gold. While most of my readers are from the United States, many who aren't, have different motives for buying Gold over silver. Let me a bit about Gold.
The biggest positive for buying Gold, is the value is currently about 70 times that of silver. What that means is, 1 ounce of Gold costs the same as about 71 ounces of silver. It's obviously a lot easier to carry, store, hide, etc. a 1 ounce gold coin than it is 71 ounces (4.43 POUNDS) of silver. Imagine if you had $20,000 worth of gold or silver that you wanted to carry or store. 16.5 ounces of Gold; that's equal to 16 one ounce gold eagles and 1 half ounce gold eagle. VS 1,186 Silver Eagles. That's 55 TUBE of 20. That's 74 POUNDS of silver. That's definitely hard to carry, store, hide, etc... vs 1 pound (16 ounces of gold). On the other hand, if a scenario arises where you need to sell some of your precious metals, it's a lot easier to use silver which is in smaller value denominations. Example: Suppose the economy is in the toilet, bread is $10 a loaf, and silver is worth $100 an ounce and gold is worth $5,000 an ounce. You can take that one ounce silver coin and buy a few loafs of bread, some milk, etc... If you try that with a 1 ounce Gold coin, it's very unlikely that the vendor will be able to "MAKE CHANGE" for you.
So there are definitely some positives to owning Gold vs Silver. This post however will concentrate on not only the positives of gold, but what to look for.
The one thing about gold that isn't quite as common with silver, is that you can and probably already do, invest in gold without even realizing it. Do you have Gold Jewelry??? Now buying Gold Jewelry isn't the best way to buy gold as an investment, because Jewelry has a major mark up because of craftsmanship. But many people buy jewelry for "Luxury" purposes. If the SHTF, there's nothing to say that Jewelry can't come in very handy for you. Ask many of the Vietnamese people who left their country in the 1970's. Even to this day, Vietnam is the 4th largest consumer of Gold in Asia. Next to China, India, and Thailand. And if you need to travel, border control will question 5-10 Gold Coins in your possession; but they will most likely overlook a gold necklace, bracelet, or ring. I myself, decided to look at the Gold Jewelry that I had acquired over the years. Personally, I only had 2 rings. With the average ring weighing about 1/3 of an ounce, that isn't that much. But when I looked at my wife's necklaces, bracelets, and rings; including what was passed down from her mother, I realized that we had a little more than I originally though. It isn't hard to discover that you might have anywhere from 5-10 ounces of gold in Jewelry form.
Now, it's important that I describe the fineness of Gold and karats of gold; especially in jewelry. 24K (Karats) would be the same as .999 fineness of Gold. Just like a Canadian Maple Leaf or Austrian Philharmonic. The formula is (Karat X 100 / 24). Thus a 22 Karat necklace would be equal to .9167 fineness. Just so happens, that's the same an an American Gold Eagle. Which of course brings up to question: Why does an American Gold Eagle cost more than a Canadian Maple Leaf if the Maple Leaf is Finer Gold??? Simple put: You're paying a higher premium because the American Eagle is a more "Trusted Mint" coin. For what it's worth, the Gold Eagle (.9167) costs the same as the Amercian Buffalo (.999). But in a scenario such as the SHTF, it's the GOLD FINENESS/KARAT that will matter.
So if you're wanting to buy Gold for investing purposes, such as if the SHTF; then you'd be better of collecting Maple Leafs or Philharmonics. However, if you're an American, the Gold Eagle would be more easily recognized and accepted. Also, if you're buying Gold for an IRA, (Which I DON'T RECOMMEND - Just like silver, I believe that if you can't HOLD IT.... YOU DON'T OWN IT); but if you do, an IRS approved IRA only allows American Eagles.
So if you're thinking about investing in Gold and Silver, which is right will depend on what you're going to do with it. If it's simply to protect your wealth and you intend on selling it when the price goes up for a profit; then Gold is much easier to store. My suggestion, being most people can't simply drop down $1200 at one time for an ounce of Gold, and you don't want to buy 1/2 or 1/10 ounces because the premium is too high, is to buy silver until you have enough that you can EXCHANGE it for Gold. Most dealers will swap the appropriate amount of silver for gold, with very little premium. Assuming they have the gold on hand. If they had to order it, it could cost you a little bit more.
This is NOT TO SAY that I recommend investing in Gold over Silver. I personally believe that the 71:1 silver to gold ratio is too high. I believe that it SHOULD BE closer to the 40:1 ratio. That means that Silver has a much great POTENTIAL to go up in price vs gold. Example: When gold was $1900 an ounce a couple years ago, silver reached almost $50 an ounce. That's a 38:1 ratio. But if you really want to buy Gold, and you're SMART ENOUGH NOT to buy Fractions.... Then I suggest buying silver until you have enough to EXCHANGE equal value of silver for Gold. Then it will be easier to store, carry, hide, etc. And don't forget about the jewelry. While I would never recommend buying jewelry as a "DIRECT INVESTMENT" in Gold, if you're going to buy yourself or your wife/husband a piece of Gold Jewelry, consider the gold value if needed during a SHTF scenario. And definitely look through the jewelry you already have. Maybe you or your spouse has some necklaces, rings, or bracelets that were passed down from you mothers.
If you are buying silver or gold for the SHTF scenario or as a means of weathering an economic breakdown of currency and you want the silver/gold to be available to supplement your income; then count the jewelry you already have. If you have 3-5 ounces of 22K jewelry, then maybe you only really need to buy silver. If all your jewelry is 14K gold, then you might need 6-10 ounces of it to be considered a decent amount of gold. Again; I'm not recommending that you BUY JEWELRY (Gold) as an investment. But many people buy jewelry as a Luxury item. There's nothing wrong with that. Just make sure you buy some GOOD gold. 22 Karat. I hope this helps you understand a little more about gold.
One final thought. In the early 20th century, the United States Government required Americans to Sell their gold coins back to the government. This is also common in some other countries. In some countries, they actually CHARGE customers to keep gold in an account; vs getting interest. This is to discourage the purchase of Gold coins and bullion for investment purposes. In these scenarios, it could actually be quite beneficial to have your gold in the form of "Jewelry". Personally, I'd hide my gold and wouldn't turn it in. But if I was in a position where I needed to move, and carrying it risks the chance of it being discovered, I'd find a way to melt it down and turn it into Jewelry. That's one thing that wasn't required of Americans when they had to turn in their Gold. Jewelry didn't count. Just a thought.
CYA: SE:
https://apps.appypie.com/media/appfile/97679f467564.apk
Ok, so what's the deal with Gold. I normally write about silver. The numerous reasons and ways to buy silver. Well, one of my international readers asked me what my thoughts were on Gold. While most of my readers are from the United States, many who aren't, have different motives for buying Gold over silver. Let me a bit about Gold.
The biggest positive for buying Gold, is the value is currently about 70 times that of silver. What that means is, 1 ounce of Gold costs the same as about 71 ounces of silver. It's obviously a lot easier to carry, store, hide, etc. a 1 ounce gold coin than it is 71 ounces (4.43 POUNDS) of silver. Imagine if you had $20,000 worth of gold or silver that you wanted to carry or store. 16.5 ounces of Gold; that's equal to 16 one ounce gold eagles and 1 half ounce gold eagle. VS 1,186 Silver Eagles. That's 55 TUBE of 20. That's 74 POUNDS of silver. That's definitely hard to carry, store, hide, etc... vs 1 pound (16 ounces of gold). On the other hand, if a scenario arises where you need to sell some of your precious metals, it's a lot easier to use silver which is in smaller value denominations. Example: Suppose the economy is in the toilet, bread is $10 a loaf, and silver is worth $100 an ounce and gold is worth $5,000 an ounce. You can take that one ounce silver coin and buy a few loafs of bread, some milk, etc... If you try that with a 1 ounce Gold coin, it's very unlikely that the vendor will be able to "MAKE CHANGE" for you.
So there are definitely some positives to owning Gold vs Silver. This post however will concentrate on not only the positives of gold, but what to look for.
The one thing about gold that isn't quite as common with silver, is that you can and probably already do, invest in gold without even realizing it. Do you have Gold Jewelry??? Now buying Gold Jewelry isn't the best way to buy gold as an investment, because Jewelry has a major mark up because of craftsmanship. But many people buy jewelry for "Luxury" purposes. If the SHTF, there's nothing to say that Jewelry can't come in very handy for you. Ask many of the Vietnamese people who left their country in the 1970's. Even to this day, Vietnam is the 4th largest consumer of Gold in Asia. Next to China, India, and Thailand. And if you need to travel, border control will question 5-10 Gold Coins in your possession; but they will most likely overlook a gold necklace, bracelet, or ring. I myself, decided to look at the Gold Jewelry that I had acquired over the years. Personally, I only had 2 rings. With the average ring weighing about 1/3 of an ounce, that isn't that much. But when I looked at my wife's necklaces, bracelets, and rings; including what was passed down from her mother, I realized that we had a little more than I originally though. It isn't hard to discover that you might have anywhere from 5-10 ounces of gold in Jewelry form.
Now, it's important that I describe the fineness of Gold and karats of gold; especially in jewelry. 24K (Karats) would be the same as .999 fineness of Gold. Just like a Canadian Maple Leaf or Austrian Philharmonic. The formula is (Karat X 100 / 24). Thus a 22 Karat necklace would be equal to .9167 fineness. Just so happens, that's the same an an American Gold Eagle. Which of course brings up to question: Why does an American Gold Eagle cost more than a Canadian Maple Leaf if the Maple Leaf is Finer Gold??? Simple put: You're paying a higher premium because the American Eagle is a more "Trusted Mint" coin. For what it's worth, the Gold Eagle (.9167) costs the same as the Amercian Buffalo (.999). But in a scenario such as the SHTF, it's the GOLD FINENESS/KARAT that will matter.
So if you're wanting to buy Gold for investing purposes, such as if the SHTF; then you'd be better of collecting Maple Leafs or Philharmonics. However, if you're an American, the Gold Eagle would be more easily recognized and accepted. Also, if you're buying Gold for an IRA, (Which I DON'T RECOMMEND - Just like silver, I believe that if you can't HOLD IT.... YOU DON'T OWN IT); but if you do, an IRS approved IRA only allows American Eagles.
So if you're thinking about investing in Gold and Silver, which is right will depend on what you're going to do with it. If it's simply to protect your wealth and you intend on selling it when the price goes up for a profit; then Gold is much easier to store. My suggestion, being most people can't simply drop down $1200 at one time for an ounce of Gold, and you don't want to buy 1/2 or 1/10 ounces because the premium is too high, is to buy silver until you have enough that you can EXCHANGE it for Gold. Most dealers will swap the appropriate amount of silver for gold, with very little premium. Assuming they have the gold on hand. If they had to order it, it could cost you a little bit more.
This is NOT TO SAY that I recommend investing in Gold over Silver. I personally believe that the 71:1 silver to gold ratio is too high. I believe that it SHOULD BE closer to the 40:1 ratio. That means that Silver has a much great POTENTIAL to go up in price vs gold. Example: When gold was $1900 an ounce a couple years ago, silver reached almost $50 an ounce. That's a 38:1 ratio. But if you really want to buy Gold, and you're SMART ENOUGH NOT to buy Fractions.... Then I suggest buying silver until you have enough to EXCHANGE equal value of silver for Gold. Then it will be easier to store, carry, hide, etc. And don't forget about the jewelry. While I would never recommend buying jewelry as a "DIRECT INVESTMENT" in Gold, if you're going to buy yourself or your wife/husband a piece of Gold Jewelry, consider the gold value if needed during a SHTF scenario. And definitely look through the jewelry you already have. Maybe you or your spouse has some necklaces, rings, or bracelets that were passed down from you mothers.
If you are buying silver or gold for the SHTF scenario or as a means of weathering an economic breakdown of currency and you want the silver/gold to be available to supplement your income; then count the jewelry you already have. If you have 3-5 ounces of 22K jewelry, then maybe you only really need to buy silver. If all your jewelry is 14K gold, then you might need 6-10 ounces of it to be considered a decent amount of gold. Again; I'm not recommending that you BUY JEWELRY (Gold) as an investment. But many people buy jewelry as a Luxury item. There's nothing wrong with that. Just make sure you buy some GOOD gold. 22 Karat. I hope this helps you understand a little more about gold.
One final thought. In the early 20th century, the United States Government required Americans to Sell their gold coins back to the government. This is also common in some other countries. In some countries, they actually CHARGE customers to keep gold in an account; vs getting interest. This is to discourage the purchase of Gold coins and bullion for investment purposes. In these scenarios, it could actually be quite beneficial to have your gold in the form of "Jewelry". Personally, I'd hide my gold and wouldn't turn it in. But if I was in a position where I needed to move, and carrying it risks the chance of it being discovered, I'd find a way to melt it down and turn it into Jewelry. That's one thing that wasn't required of Americans when they had to turn in their Gold. Jewelry didn't count. Just a thought.
CYA: SE:
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