Guide to Investing in Gold & Silver
Investing in gold and silver tends to increase during times of economic uncertainty. Many investors believe that precious metals are a relatively safe place to keep their assets when stocks and bonds are viewed as risky. Gold and silver have universal appeal and universal value. All financial markets around the world trade in gold and silver. Unlike some currency, gold and silver always maintain some value.
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History
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Both gold and silver have a long history as items of value. For thousands of years, they were used in commerce because of their rarity and unique qualities. According to Science Clarified, gold and silver are very malleable and resist corrosion. They are also dense and aesthetically appealing. The U.S. dollar used to be backed by precious metals. President Franklin Roosevelt took the country off the gold and silver standards in 1933.
Investment Types
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Gold and silver can be purchased as bullion in circular or bar shapes. The standard size for gold and silver bullion is one ounce, but the metals also are made in fractions of one ounce and in larger sizes. Gold and silver were also commonly used in coins minted prior to 1933. It is possible to invest in gold and silver without physically holding the metal. There are gold stocks, gold exchange traded funds and gold mutual funds.
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Purity
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It is important to understand the purity of gold and silver when investing in precious metals. According to the website FreeGoldTips.com, gold and silver coins are actually alloys. This means they are a mixture of the precious metal and other metals. Most silver coins are made from 90 percent silver. Most gold coins are 22 karat, which is 91.7 percent gold. Gold and silver bullion are measured in the pure metal. A one ounce gold or silver bullion item contains exactly one ounce of that precious metal. The actual item might weigh more if it is mixed with another metal, but it will be marked with the weight of the precious metal alone.
Price
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The price of gold and silver fluctuates constantly. The "spot price" of each precious metal is the amount it is selling for in financial markets around the world. It is essential to check the spot price of gold and silver on the day you invest. These spot prices are easily found on financial websites like TheBullionDesk.com.
Market
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Gold and silver are only good investments if you can sell them for more than you paid for them. The prices of gold and silver tend to fluctuate with economic prosperity. When there is great confidence in the U.S. dollar and the world economy, there is little interest in precious metals. When confidence is shaken, investors tend to buy gold and silver. According to FreeGoldTips.com, investors tend to buy precious metals when they believe the economy will get worse and sell when they predict it is improving.
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References
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