newsprompt.coWHOLESALE GOLD PRICES
You seem to be a little skeptical with buying gold and honestly we cant blame you. Gold prices are up and down throughout the years on economic turmoil, making the metal one of the strongest market performers these years. Current headlines highlight our escalating food and fuel prices, mortgage foreclosures, bank bailouts, bankruptcies, and layoffs from American companies that were once thought of as invincible. Throw in some high tension between nations such as Iran and Israel, armed clashes in Iraq and Afghanistan, and it doesn’t paint a very good picture for economic stability.
Given that 52 billion dollars worth of gold was sold last year for investment purposes, according to the World Gold Council, it’s not surprising that shady dealers have lined up for a piece of the action. Most of the total was invested in gold mutual funds or exchange-traded funds. Investors seem to have a large number of options ranging from Gold ETFs to gold stocks to actually buying real gold but what is the purpose really? And why should investors even bother investing in the gold market? Indeed, these two questions have divided gold investors for the last several decades. One school of thought argues that gold is simply a barbaric relic that no longer holds the monitory qualities of the past.
In a modern economic environment, where paper currency is the money of choice, gold’s only benefit is the fact that it is a material that is used in jewelry. When people are scared about the economy and financial markets, they rush to gold. Boy, were they worried in recent months.U.S. demand for gold bars and coins surged 207 percent during the third quarter, the World Gold Council said on Thursday. The skyrocketing demand signaled a level of interest in gold investment that is not seen since the global financial crisis, the group said. The U.S. Mint backs up that assessment. It said gold Eagle coin sales surged to nearly 400,000 ounces last quarter, the highest level in more than five years.
For people who are interested in buying coins, it’s important to know there are two distinctively different markets. Investors seek gold bullion coins that reflect gold’s market value, called the “spot” gold price. Numismatic coins are collectibles, and they can also have a price premium (or discount) attached to them depending on their rarity and conditions. Buying Gold Bullions are coins struck by major global mints such as the U.S. Mint, the Royal Canadian Mint and the Perth Mint. Coins made by those mints are easy to buy and sell, and they are known even to people outside of the coin world. The price of gold fluctuates over time.
There is no guarantee that gold will increase or even maintain its value. The prices coin dealers, banks, brokerage firms, and precious metals dealers charge for gold products, like bullion and coins, are almost always higher than the value of the gold the products contain. So it’s wise to compare prices before making a purchase. Some sellers say that the government may confiscate gold. Others say that “reportable” transactions lead to confiscation. Yet other sellers claim that modern bullion coins produced by the U.S. Mint are subject to confiscation while historic or collectible coins aren’t.
These claims sometimes lead people to buy historic coins at prices that exceed their value. No current federal law or Treasury Department regulation supports any of these claims.Gold is the inverse of the dollar. It is not the only dollar hedge but it is a pretty basic one. While gold isn’t really the immutable store of value it is cracked up to be, as a valued quasi-currency, it is only being inflated by its 2 percent yearly production. Money has no value, even golden money; it is just a means of exchange. Or so they say. Yet as a means of exchange, gold is a good proxy for a mirror image of the U.S. dollar. This isn’t necessarily good for gold. Imagine for some unexpected reason, Japan and Europe were going to devalue their currencies against the dollar.
The dollar would be strong. Quite likely that would make gold weak. In the short term short gold can be the same as long dollar. That could be painful to gold holders, even in the middle of a global financial crisis.There are a number of investing options available, and you need to choose the option that makes you feel the most comfortable. Investors can invest in gold through exchange-traded funds, buying stock in gold miners and associated companies, and buying a physical product. These investors have as many reasons for investing in the metal as they do methods to make those investments. Gold’s advocates have historically seen it as a safe-harbor asset that protects purchasing power against inflation during challenging economic times, since it tends to hold its value over the long term despite fluctuations.
