"Investing in Gold - How to Go About It?"

Gold Markets

Gold is traded in many markets around the globe. London and New York are supposed to be large markets for gold and they function through the day. It is worth mentioning that Kong Kong and Zurich market are also open to trading for 24 hours. The gold market functions like a stock exchange in l aspects of buying selling and determination of prices though the fact remains that different factors influence the price.

World Gold Council

World gold council is a forum of gold producers around the globe. The basic objective of this body is to disseminate information regarding investing in gold and also to create an awareness among the masses. They also lay down lot of guidelines for small scale producer's traders, consumers and other stakeholders. The association is headquartered in Geneva.

Is investing in Gold a Good Idea?

If you are thinking of returns or results in the short term then gold is probably not the right option. Investing in gold is no doubt a profitable option as it can be quickly converted to cash. It is a convenient as you can carry it easily wherever you go unless the quantity is very high. Since the performance of gold market s directly proportional to stock market it becomes easy to make calculations.

Gold-A Precious Metal as Investment

Gold enjoys innumerable advantages over other metallic forms. Platinum investment is very risky and moreover it is not easily convertible to cash. If you take the case of silver, it does not enjoy huge prospects in terms of financial gain. Moreover silver occupies lots of space when compared with gold and so you it can cost you more for transporting. This should sound out to be worthless propositions given the monetary benefits are not promising.

Factors to be considered before Investing in Gold

You need to be very careful about investing in gold because unlike stock or other markets you don't have the option of investing a small amount. You must do lot of research and have a strong knowledge about the market information. You must decide how you are going to allocate it in the portfolio. Some investors choose to invest only in gold and not in any other sources. However this practice won't be suitable for all. Therefore you must first check up if you are falling under this category. Some other issues that are to be considered are as follows:

Factors that Influence Gold Price

Like any other resource the supply and demand constitutes to be an important factor in determining the price of gold. Since gold is a precious asset people even hoard it and its demand and price could increase drastically during inflation and even when there are wars. The price of gold shows an upward trend in most cases irrespective of the consequences due to the sentiment which people owe to the metal. They are prepared to pay any price for it.

Gold Investment Strategies

Some of the investors prefer to buy gold when the price increases because of the popular belief that it will increase further more and they can make profits by selling them thereafter. Other investors choose to buy gold when prices decline so that they can sell them at a higher profit when the prices increase. Another group of investors will make their decisions by testing if the current trend in pricing changes or not.
 

Drawbacks or Dangers involved in Gold Investment

You have to double check the quality before you decide to make a purchase or an investment. Some of the traders try to woo investors by saying that certain gold coins cannot be confiscated by the government during emergency situations like war or civil crisis. These coins are priced heavily and the investor will not stand to gain any value for the higher amount he had spent. The investor should check the federal law governing the state pertaining to issues of confiscationcoins 

Types of Gold

You can choose to own physical gold or through paper documents like shares and certificates. Some of the popular modes of investing gold are gold coin investing, gold stock investing, online gold investing, and gold bullion investing. Before you decide to invest in the metal you must decide which form suits you in terms of convenience convertibility and preference. Some of the popular forms of investment are as follows

Raw Gold  This is the most common form of gold. However it is not regarded to be safe and maintenance becomes difficult. If you are planning to invest in large quantities this method is extremely unsuitable. Should you still think of adopting this method then you should take adequate safety measures like keeping them in a bank locker.

Jewelleries

This form of investment is also equally famous. This form of investment can be especially beneficial if you are planning to trade them to the consumers and households.The advantage of raw gold and jewelleries are that they facilitate liquidity in no time.However you have to take lot of care to maintain jewelleries and it is not advisable to think about this method unless or otherwise gold investments are your full time trade.

Gold Coin

This form of investment is advantageous when compared with the earlier two forms because it is easily portable. However there are lots of gold coins specific to national boundaries and you must have a clear idea of their values before trading with them.It is also very easy to convert gold coins to other forms and as well as selling them for cash.

 

Gold investment is no doubt a thrilling option. However they are not free from limitations. Many investors blindly take decisions on the basis of the ups and downs in the stock markets and this creates havoc especially when the gold market is demonstrating a different behavior. Gold investment is very important as it contributes to the national and international economy.

Thnx a lot sumit for sharing such information.....