Ideas on How to Become Rich - Investing in Gold - Part III
In this section, I will be sharing with you tips on the buying and selling of gold with a view to profit in the long run.
I have over the past 20 years invested in both gold ornaments (jewellery) and gold bullions because as a conservative person, I have faith in gold more than in currency or other financial instruments.
The secret is that I managed to sell off some of my obsolete gold pieces for prices higher than I bought them for, after using them on several occasions for self adornment such as attending important meetings and functions. The prices of gold kept going up over the years due to the weakening of the US Dollar that I am reluctant to part with my gold collection in anticipation of further rise of price of this precious metal.
Well, how to buy and sell gold? First, there are several ways to buy gold. As mentioned already, you can keep gold in its physical form, either as ornamental gold, which comes in various purity standards; or as gold bars normally done by rich individuals who love to see the colour of money in gold or you can invest in gold as a financial instrument very much similar to any of the instruments used in the trading by the interbanks which can be spot, forwards or options. This is because allocated gold can be traded by central banks and other financial institutions via the commodity market, just like any commodity trading. Then you can also use this method to sell your gold.
Let me just explained a little further about how the market for gold is traded. Trading would be a series of deposits and loans taking place. A central bank for example, sells gold to a bank, which lends the gold to a gold producer who hedges gold that it has yet to produce (or mine) etc.. So transcripts very much in form like the shares or stocks, would move from one institution to another . This complex trading system is to enable the gold to have a smooth transaction from the buyer to the seller via a financial institution. The difference between the buying price and the selling price would then be calculated very much like the bank's interest rate, which in this case is the gold interest rate. Well, the main idea is for you to be able to get a good rate when you sell your gold through the financial institution.
Another way to sell gold is through the Gold Option market which functions very much the same way as the currency market. There is one more way which is to use fold as hedge funds but this method is not really exciting as the gold will be bundled with other assets as a total package by fund managers of the various financial institutions.
As a final note to all of you, gold as an inflation buster is still valid because governments and world economic conditions may change, so holding on to some form of gold investment will enable us to keep our traditional and conservative view that it is better to be safe with some gold than to be sorry.
Gold is still a barometer of global financial health. Although gold may have lost some of its lustre over the years, it is still very much a part of the human sentiment or confidence to have this precious metal in their portfolio for wealth and riches.
Before I end , some of the questions you should ask yourself are:
a) what is your motivation for investing in gold?
b) what is your view of the USDollar?
c) what is the market sentiment or trends in the financial markets?
d) Why silver is not a real good investment?
With the above, I hope that you can think about possibility of investing in gold for the long run. Gold investment is not really for speculators but for people who want to have something to hold on to whatever the future beholds..
Cheers and go for the golden opportunity!
Sally Klaus
Ideas on How to Become Rich
PS These are just investment and finance ideas and do not constitute actual investment advice or professional advice by trained professionals.
