Gold is a timeless store of value that continues to hold the attention of traders, investors and minors all around the world. Gold is valued highly per ounce and is very slowly being mined from the Earth. However, the incremental change is very small. With increased demand, the price of gold bullion has generally increased over time. There are a few things to know about investing in this precious metal here in Melbourne.
What is it?
Gold bullion is pure gold. It can come in many different forms including bars and coins. Manufacturers often authenticate bullion to be at least .999% gold which is considered absolutely pure.
The key to bullion is that it is easy to determine the price. Simply weigh the item and then multiply it by the outstanding international (or local Melbourne) exchange price. For example, if you have 6 ounces of gold bullion in bar form and the price is $2,000 Aussie Dollars, the value of the bar would be $12,000 Aussie Dollars. This is a very simple calculation that makes it easy for owners to know the value of their holdings.
This is in stark contrast to gold jewellery. Gold jewels may have sentimental value or different subjective values based on the person viewing or wearing it. The same ounce of gold that is on an earring, bracelet or ring might be worth $2,000 to one person and $5,000 to another. For this reason, it is not a good means for investment and most people choose to invest in bullion forms.
Factors in Gold Investing and Pricing
There are many factors in the price of gold. First and foremost, it is a store of value that cannot be printed infinitely like fiat currencies. That means governments or dictators do not have the power to print gold and decimate its value. For this reason, it has long been used as a hedge against inflation or a refuge in times of crisis. Countries with massive financial crises including Weimar Germany, Argentina, Venezuela and Zimbabwe all turned to gold as a unit of exchange for bartering.
Gold does have some use cases that drive global demand as well. Of course, gold can be used as jewellery. It can also be used in industrial products, spaceships, electronics and other goods. That fundamental demand story ensures a constant need for more of the product and a rising price over time.
Lastly, central banks around the world recognize the value of gold and use it to backstop the value of their own currencies. Countries around the world including the US, Switzerland, China, India, Russia, the EU and Australia all store massive amounts of gold in central vaults.
As of December 2017, the price of gold on international exchanges was around $1,250 US Dollars or around $1,650 Aussie dollars. Over the past year, the price has bounced around between $1,500 and $1,700 but has generally been trending upwards over time.
How to Invest
Those that wish to invest in bullion can take one of several options. Firstly, they can visit one of several online or physical retail sites in Melbourne. After a quick background check, you are permitted to open an account. Next, fund the account and purchase gold at the time when you feel the price is appropriate. Finally, hold the gold bullion until you wish to liquidate it for cash. There are other index or exchange traded gold investment vehicles. However, these do not provide you the physical gold to hold in your hand and verify.
Diamond Brokers is one of the easiest ways to invest in gold in Melbourne. Many individuals have profited handsomely thanks to their investment on this platform. For more information, please contact us.