If you’re surprised by the recent Standard & Poor’s downgrade of the US government that from AAA to AA + then I’m not sure the rest of this will help you. The only surprise is that it took so long to occur. Along with the announcement of the downgrade came yet another spike in gold prices. Gold topped $1800 an ounce recently. As most people discover sooner or later, there is a day of reckoning when it comes to dealing with debt. That applies to personal debt as well as government debt. We know for certain that the government debt will continue to rise. Hopefully, you have dealt with your own debt. The question becomes, how high can the price of gold go? Is it too late to invest in gold?
There are many investment gurus who are calling for gold to go as high as $5000 or $6000 per ounce. Is that realistic? Let’s look at some facts. Recently the Fed announced that interest rates would remain low, near 0% for the next two years. While some may have thought their comments were to give political cover to an economic policy, that bit of news did stimulate the stock market albeit only for a day. Lost by most of the media covering this announcement was the fact that Fed also announced that the economy would likely stay on its present trajectory for the next two years. Most would agree that the present trajectory of the economy is not an environment conducive to growth.
So that takes us back to the price of gold. The prices went up because of our economic uncertainty. It’s likely that the prices will continue to go up, because as in the words of the Fed, the environment will remain the same for the next two years.
There are 101 reasons to own gold right now. You might buy because of the debt turmoil you see around the globe. You may think it wise, like the Chinese and others, to keep some of your savings in gold. Negative real interest rates may draw you to gold. You might buy because of the mere fact that demand is overwhelming supply. Or you fear inflation. Or deflation. Casey’s Daily Dispatch
Those reasons are all valid. The reality is for many people paying $1700-$1800 an ounce for gold is not feasible. The answer lies with a systematic approach to accumulating gold bullion and gold coins. In fact, had you implemented this strategy a year ago you would have realized a 45% gain on your investment. As with all investments, you should look at the percentage gained not necessarily the overall dollar amount. Finding a 45% gain on any investment vehicle these days, can qualify as a quasi-miracle. Let’s take a look at investing in gold with the small investor in mind.
Investing in gold bullion and gold coins
The prospect of investing is exciting for a number of reasons but two in particular include the fact that there are so many different possibilities and the second that the price has now hit all-time highs with experts predicting value will continue to climb. Although the more seasoned investors typically look at investing slightly different from someone just getting started, there is ongoing interested in gold bullion and coins for investors at all levels.
From way back in history, gold bullion and coins held a special place of importance in the economy and even today, they are one of the hottest selling types of gold. For one thing, gold bullion and coins, which are also referred to as cold coins, are made up of pure gold or almost pure gold. Obviously, when purchasing gold the idea is to find the purest form possible but at the lowest price.
Originally, gold bullion and coins were coveted because of their intrinsic value but now, they can be purchased and used as an investment both short and long-term or bought as a collection. However, because gold coins are so easy to find, they can be delivered easily, they can be stored in a person’s own home safe, in a bank deposit box, or in a special vault maintained by a dealer or broker, and because they sell quickly, this is without doubt one of the best choices when getting involved with gold investments.
One of the prime benefits of buying gold bullion and coins is that investors have options as to the number they buy. For this reason, they are ideal for the new investor, someone who wants to try gold investments and play with the market but without spending a great deal of money. As mentioned, investing in gold bullion and coins is the primary reason for buying but there are also people who choose this option as a way of offering future generations with something of value. In other words, a person could buy gold bullion and coins, store them, and then upon death, pass them down from one generation to another.
Investing in Extremely Rare Gold Coins
If a person wanted, they could choose different portions of gold from bullion but in the case of gold coins, they would need to consider a number of factors when looking for the best to include those listed below:
- Rarity
- Condition
- Age
- Number Originally Minted
Although all gold bullion and coins are considered valuable, there are some gold coins that are always in high demand although they come at a high price. For instance, the Solidus, SpurRyal, and Aureus would be three types of gold coins that any investor would be thrilled to own. Another rare gold piece is the 1933 Double Eagle. In fact, just nine years ago, a $20 coin of this type sold for more than $7,500. As a result, this particular coin was rated as the most valuable ever sold with its records at that time.
Top Selling Gold Bullion and coins
Today, two of the gold bullion and coins that people look for are the American Gold Eagle and Krugerraud. Both of these coins would make an excellent start for someone wanting to invest in gold bullion and coins although there are many others. Again, the most important thing for any investor is finding a reputable seller, locking into the highest price possible, and then selling for a nice profit.
On a short-term basis, at least for now gold bullion and coins are perfect for making quick money. Dont get caught in this game. With the price being so incredibly high, when buying low this would certainly be a realistic option. However, on a long-term basis, the goal would be to purchase gold coins, store them, and wait until the price reaches even higher numbers at which time they would be sold. In this case, a wealth portfolio should consist of between 3% and 5% gold for beginners but even more for the serious investors looking to turn a huge profit.
