From an investment point of view, the price of precious metals like gold and silver is important. Both these metals are considered to be good long-term stores of value. These metals are durable, easy to carry around and they are easy to value. This is why civilisations across millennia and different countries have protected their wealth by investing money in precious metals like gold.
Precious metals like gold do not move like other assets price wise. The price of gold is not affected by the movement of asset classes like stocks, bonds and shares. Moreover, when the economy isn’t doing so well, the price of gold goes up making it a safe haven investment. Having gold means that you have a way to get the cash you need when you need it.
Most common bullion investments by individuals are silver and gold however, there are marked differences between these precious metals.
First of all, gold has a bigger market. It is easier to buy and sell gold bullion than other precious metals such as platinum or palladium.
The gold price is less volatile than the price of silver. The price movements for silver are more pronounced because of its ubiquitous use in industrial applications.
The price of gold is driven by investment and jewellery manufacturing. Silver is used primarily in industrial applications, the demand and therefore, is linked to the growth in the industrial or manufacturing sector. If there is a slump in this sector, demand goes down and so does the price of silver.
There are different forms of gold that can be sold and the price for each varies.
For starters, Gold bullion coins are liquid. They can be bought in stacks and only portions of those stacks sold at a time depending on the amount of money the seller needs.
Gold coins are easily recognizable. There are popular gold bullion coins that are recognized all over the world such as the South African Krugerrands, the American Eagle and the Australian Kangaroo. This means you can trade these anywhere in the world.
Gold coins have a higher resale value that most coins, especially jewellery or scrap. They may have a high premium to begin with but they can be resold for higher prices.
It is important to note that not all gold bullion coins are recognizable or hold the same status everywhere. The best gold coins in Europe for instance, might not be the best in the U. S or China.
A lot of investors often wonder what the best way of investing in gold is, gold bars or gold coins? Coins might be more portable and attractive but it takes a lot more time to design, manufacture and package gold coins which makes them more expensive. Gold bars are easier to manufacture which makes them cost less than coins. Gold bars are also easier to store because they take up less space.
Gold bars come in different weights and sizes. You can buy small bars that are wafer thin and weigh a gram or you can buy bars that are bigger. In general, it costs less you buy big gold bars because they cost less to manufacture but they aren’t divisible. When you sell bullion bars that are big, you are liquidating a very big investment, which is not advisable especially if you don’t need a whole lot of money. Smaller bars also mean you can sell them to a greater pool of buyers. Bigger bars need to be assayed when they are being sold. This adds an extra expense which reduces the amount of money a dealer will offer and it delays the amount of time it will take a dealer to make a payout.
What dealers look for when a customer comes in to sell a gold bar is whether the bar has been stamped with the proper information and has the hallmark of a reputable mint. If you have a globally recognized hallmark like PAMP, Argor- Heraeus, Johnson Matthey or Perth Mint, you can sell your gold bar virtually anywhere in the world.
When selling your gold bar, kook for at least three possible buyers. Get quotes from each of them and do some research on what kind of dealers they are and the kind of reputation they have.
Gold bullion coins and bars are tangible liquid, assets that will are great for diversifying your investment portfolio. If you have gold bullion this might be a great time for you to sell.