Gold Overview
GOLD: Treasured for Centuries
This metal has been highly valued since ancient times, not just because of its beauty, but gold was simpler to mold and obtain in its pure form. Due to its comparative rarity, gold became the standard currency for international transactions.
In six short years, the tables have turned for gold. In 2001, prices were roughly $270 per ounce with a production cost of roughly $160 per ounce. In 2007, the production cost is nearly $400 an ounce and the price is over $800.
Gold & the US Dollar
Historically, as the dollar declines in the foreign currency market, the price of gold raises in the world market. Recent trends indicate the dollar is losing value on the international arena and watching the foreign currency market trends in the near future should influence your decision to invest in gold.
Portfolio Diversification
The foreign currency market once provided the ideal portfolio diversification vehicle to protect against market fluctuations, but as the US dollar drops, currency around the world is also devalued. Therefore, professional money managers seeking to diversify their investments have extended into hard assets like gold bullion, which provides a safe/secure investment that can be easily turned to cash at any time.
Collateralized finance program
One way to invest in gold bullion without a lot of start-up capital is to leverage your purchase. This process is similar to buying a real estate property, where a small down payment, usually 30 percent, can purchase a larger lot, and, just like a property, you (tentatively) own the entire value.
Gold as an Investment
Gold has proven to be a solid and dependable hedge against inflation. Whether you are looking for short-term profits or long-term investment, gold coins and bullion are widely recommended as an essential part of of any well-balanced portfolio.
United States Gold Coins
The unit of measure for gold is the Troy ounce; One Troy ounce is equivalent to 31.1 grams. For the creation of coins and jewelry, it is alloyed with other metals to give it the necessary strength. The gold content in alloys is expressed in carats. Gold coins are commonly forged of 90% gold and 10% silver.
All gold coins are valued by the current price of gold; however, many older coins have added value based on quality and historical merit. The U.S. Mint Act of 1792 established the creation of three denominations of gold coins:
The Eagle
The Half Eagle
The Quarter Eagle
Foreign Gold Coins
Many countries throughout the world issue gold coins. The Canadian Maple Leaf, the Australian Nugget, and the Chinese Panda are among the world's best known. These three, along with others, are available in sizes ranging from a Troy ounce to 1/10 Troy ounce.
Gold Bullion
These coins and bars, issued in various denominations, provide a convenient method to acquire the most gold for your investment dollar. Bars and wafers are also available in lots for individual requirements. These are always stamped with numbers that designate the purity and weight.