When you decide to buy bullion it’s good investment to use as a hedge against inflation, this is caused by money being printed by the world central banks. It is in fact a tangible asset, which means that it has intrinsic value unlike fiat currency. Most people regard inflation incorrectly. People tend to believe that when the price of oil or food goes up that the prices are increasing from excess demand. The fact is that the value of money has decreased.
In order to purchase bullion you could buy it in the form of bars or coins and the design may vary. It is important to do some research when dealing with choosing the right investment for your needs. Coins attract a higher premium than bullion bars due to costs involved in manufacturing. Most investors prefer the bars do to them being closer to the spot price of gold.
One good reason to purchase bullion coins is for some portfolio diversity and one day the coin value may increase over the intrinsic value of the gold. For many years, gold has been regarded as one of the most precious metals and the demand for gold is always increasing this includes both bars and coins.
As long as mankind lives society has always returned to gold. Society, through out history have tried different form of fiat currency. Every time the fiat currency value returns to zero. Gold will continue to have the tendency to lure people towards it. Why? Nobody knows..
If you have made the choice to purchase bullion or gold bars you should be aware of the fact the bars come in different sizes ranging from 5g – 1kg. One kilogram is equal to 32.15 ounces troy. Gold is measured in the traditional system and not the metric.
There are also different hallmarks from around the world. Research your hallmarks and brands that have LBMA accreditation will fetch a higher price than a local market bullion brand. That being said, if a local branded bullion bar is the right price, why not support up and coming refineries?
In a globe that has dealt with financial crisis in recent years, gold is a tool that is necessary for safe investment. At times while global markets are crashing world wide gold will be sky rocketing. This makes all other asset classes more affordable for you when it comes time to sell your gold bullion.
Even hedge fund managers allocate a proportion of the portfolio to gold. It’s a known fact to hold gold and protect a percentage of your portfolio in times of crisis.
There are many different ways to buy gold bullion. Hedge funds typically buy what’s known as ‘paper gold’ or CFD’s. These gold contracts are highly leveraged and nobody knows if the gold actually exists or not. Mum and dad investors opt for gold fund shares or physical bullion. Buying physical bullion is recommended as one day, when the time comes, will all the gold be there for everyone to redeem there paper contracts? And..Nobody knows the answer to this question.