Gold is uncommon. The value of this precious metal is not like real estate or other equities. However, it can be helpful in diversifying your portfolio.
Money Week Magazine says gold ensures insurance for your folder. It may be advisable to allot at least five to 15 percent of your investments to gold commodities.
Is this a worthwhile venture? What are the procedures?
To start with, physical gold is said to be a restricted currency worldwide that is maintained by many central banks.
Gold bullion is not considered an investment by itself but more of a form of financial insurance. Do not trade gold just like an insurance policy. It ensures wealth preservation but gold cannot be likened to investment funds and mining shares.
Gold Bullion
With contemporary bullion coins, investors can have possession of investment-grade and legal gold coins at minimal premium compared to the metal’s spot price in world markets.
The value of gold coins and bars is shaped by market prices. In fact, gold along with silver and platinum come available in bullion coins. These are minted in the United States, United Kingdom, Australia, Canada, Austria, China, and South Africa.
The coins can be cast in ½, ¼, one-tenth, and one ounce or more. The one-ounce variety (Krugerrand/Britannia) is said to be the most popular for small and large scale investors aware of benefits of owning legal bullion coins.
Investment-grade gold bullion is stamped duty-free and tax-free (exempted from Value Added Tax) in the European Union and UK because of the EU Gold Directive (2000).
Leading Gold Brokers
It is possible to check out the comparison of prominent gold brokers from Money Watch if you are looking for free and balanced information on how and where to purchase bullion bars and coins, it is
Old and rare coins are purchased not only for their valuable content but also for scarcity, historical and visual appeal. These are influenced by market prices. In other words, price of such coins will by and large rise faster than bull market price. It will decline more if the metal is in a market with plunging prices.
The British one-pound coin or gold sovereign is the most extensively traded commodity and semi-numismatic gold coin globally. These are exempted from the capital gains tax.
Gold Certificates
The Australian Government boasts of the Perth Mint Certificate Programme which is the only government-endorsed valuable metal certificate programme worldwide. It enables you to hold investment-grade gold kept in Perth Mint of Western Australia vaults.
The gold is stocked up in a government-owned mint and insured by the world’s leading insurance provider which is Lloyds of London.
The bottom line is the gold is “unallocated” or you do not really own the commodity but simply a guarantee from Perth Mint to give you the gold in case you want it. The account provider serves as custodian and you are the legal owner.
You need not worry about shipping, holding, custodial, and insurance coverage fees.
Most investors opt to own their bullion in unallocated accounts as there are no insurance or holding fees on them, and there is the flexibility of being able to transfer to an allocated account simply by paying small fabrication fees should the investor deem it necessary.
Owed accounts
Allocated accounts for gold allow investors to acquire gold coins or bars from a bullion stock broking firm which transfers the asset to an individual’s bank account. Allocated accounts call for possession of specific gold. Owners have titles to coins or bars. Due diligence will be conducted on providers of allocated gold accounts along with their history, security, credit standings, and net value.
Digital Gold Currencies
The digital gold currency is also known as electronic or e-gold. There is no particular regulation for such providers. They all operate without having to abide by bank regulations. At present, the more reputable providers are Gold Money and Bullion Vault. They offer accounts where gold can be purchased or sold right away similar to foreign currency. Gold bars are accounted for and audited accordingly. Digital gold is used mainly by clients to buy gold for savings or investments.
Paper Gold
You can invest in corporations that mine gold or explore new deposits. If you want to invest in such companies, make sure to spread your investments since this is a risky move. It is also possible to opt for financial assets like options, futures as well as spread-betting. Said products allow you to leverage investments. This will increase your profits if prices move in the right direction and raise losses if things go wide of the mark. Meanwhile, exchange-traded funds for gold have become popular in London through ETF Securities and Street Tracks Gold Shares.