Precious metals have always been, are and will be a good opportunity for a profitable investment. In this article we will look at all the details about investments in gold and silver.
Gold – is generally one of the most important elements in the economy. For centuries it replaced the money. Then we have the money (coins) began to produce gold. For example, in 1923 the USSR was issued a gold coin, which contained 7.7 grams of gold.
Now it is hard to imagine, but a few decades ago, the entire world system of money relations and the settlement was linked to gold. Until the 40s acted so-called “gold standard”. The basic unit of international payments was a standardized amount of gold. Even the Bretton Woods agreement in 1944, designed to modify the payment system, still left a binding settlement for gold.
Since then, standards have evolved for International Settlements and changed several times. However, until now, the economy of entire nations strive to produce or acquire more gold as a reserve for a “rainy day.” You’ve probably heard the term as “foreign reserves”?
Silver, to tell the truth, has a similar story. The people behind him and fought and coins from it done. I recall that after the silver called the whole state. And not some dwarf, and 8th in the world in the area (Argentina, from Argentum- Lat.silver).
Investing in gold and silver: the advantages and disadvantages
I’ll start with the disadvantages. Here I will mention two things:
- Both the precious metal almost always high have volatility. No, of course not the metals themselves. Their variable rate against
major world currencies. And there, where the price can vary dramatically – possible profits. But the possible large losses – is the flip side.
- Silver and especially gold by highcharacterized unpredictability. For instance, future changes in rates can be predicted if the conduct fundamental analysis. We definitely can say that the rate of, say, the ruble will fall if the Fed strengthen the bid. For gold this prediction can be done.
In this case, the benefits also significant:
- High liquidity.Gold and silver are willing to take in almost every bank. In the extreme case, pawn shops have for sale.
- Precious metals fit any conditions, storage they do not spoil.
- Availability. Even one or two thousand enough to try investing in gold and silver.
- There is no age limit.Barely received a passport, the 14-year-old citizen can already invest. In some cases, carry out operations with precious metals is possible even on accounts opened newborn baby.
How to invest in gold and silver
Historical trail and modern technologies offer a number of opportunities for investment in gold and in silver. Therefore, we consider in detail each of the options.
Unallocated metal accounts
Today, it is an objective, the most convenient and popular way to invest in precious metals. Under unallocated metal accounts (even they are called metal accounts “,” MHI “) understand bank accounts, which keeps records belonging to customers of the bank reserves of precious metals in grams. Thus, the metals themselves are stored in the bank. Thus, the question of storage and logistics for investors to become irrelevant.
All you need to make the investor – is to choose the right metal, see its price and buy the right amount. Then, at any time and sell the portion of the precious metal. By the way, in addition to gold and silver, the banks usually offer platinum and palladium.
These services are now provided many banks. Among them are JPMorgan Chase, Bank of America, Citigroup. This, among other things, the three largest banks in the former United States and in America in particular. European banks and lending institutions also provide similar services to their customers. Western-style, metal accounts called «precious metals ISA», literally – an individual savings account of precious metals.
Banking information technologies provide another advantage for investors in CBOs. All transactions are generally available via the internet bank or that bank. As a result, deposit and withdraw money, you can quickly, conveniently and without leaving your home.
Thus, unallocated metal accounts are very similar in nature to bank deposits.However, there is a fly in the ointment. MLA, unlike deposits, do not participate in the deposit insurance system.In addition, if between buying and selling less than three years, and the amount of sales 50 000 – will have to pay 13% tax.
Gold and silver coins
Minted in ancient Egypt, silver, bronze and gold coins even three thousand years ago. Their legacy lives on to this day. Coins made of precious metals continued to serve as a great tool for savings.
First, there are many coin collectors – collectors who are willing to shell out for a good old money. Secondly, chasing collector coins is
continuing. Central banks of any country are constantly about the warn release of any new limited batch of coins from the drag-metals on the occasion of the next big national celebration.
Note that valuable coins – is not only an investment tool, but also a good gift. As a matter of choice will be a gift to you is relevant – think about them.
Buy and sell coins of gold and silver is possible in banks. Especially active are engaged in JPMorgan Chase and Bank of America. Very many banks in USA, United Kingdom, Canada and other countries are also actively trades in buying and selling various high-value coins.
The bank can buy not only coins, but the whole bars of gold or silver. However, this is a very dubious investment asset. When you purchase will have to pay not only the market value, but the value added tax (25% in USA).
Jewelry of gold and silver
Now are a lot of information there about investing in rings, earrings, bracelets and other jewelry. Especially actively supported such investments the fair sex. However, do not trust these tricky chanterelles.
The cost of jewelry is to work at their manufacturing and services middleman (the store). In addition, a beautiful rarely made of gold or sterling silver. So as soon as you buy a new shiny ring, it immediately loses 15-30% of the price.
Therefore, buying jewelry of gold and silver can be viewed only as an investment in a good mood yourself and your loved ones.
Trading through a broker
One advantage of working broker – a financial leverage, or, in a simple way – leverage. Thanks to the work with liquidity providers and a large number of divergent operations (buying and selling), the broker can greatly increase the volume of transactions of its customers. At the same time, clients’ money as collateral for transactions.
In simple terms, an investor with ten thousand rubles could buy gold, for example, a hundred thousand. If gold will rise in price, all profits will go to the investor. If the gold is cheaper – the investor will incur a loss of ten times greater than without leverage.
This feature encourages daily tens of thousands of traders Worldwide. However, once again I mention possible losses. Untimely attachment can bring 100% loss in as short period of time. Therefore, trading in gold and silver through a broker recommended only for experienced investors.
By the way, almost all brokers today offer the opportunity to purchase and sale of gold and silver. However, it is important choose a good tobroker. Let me remind you that the three-digit code indicating the gold as a commodity – XAU. Silver is referred to as XAG.
Investing in gold mining companies
If rising oil prices, the experienced investors do not buy the oil itself, while shares of oil companies such as British Petrolium, Exxon or our Baytex Energy Ltd. This usually brings a tangible return. The same logic is relevant for gold.
So, for example, only the first three months of 2015 gold stocks increased by 17%. Where do we get a list of these companies? The largest of them are included in the index «Gold Miners» New York Stock Exchange. The largest gold mining company in the world is now considered Canada’s Goldcorp Incorporated.
Interestingly, some time ago in this index were two Russian companies, “Pole” and “Polymetal”. At the same time, a large proportion of the gold mined in Russia. In addition, Russia and Canada occupy two leading positions in the world of mining. By the way, to buy shares of the same, “Pole” can be through any major broker. I can recommend, for example, the broker “FXopen”.
Thus, gold and silver are not only pleasing to the eye, but it gives us a real investment opportunity. Therefore, I recommend to carefully look at the precious metals. After all, with such a range of investment instruments, and you can earn good and well diversify their to portfolio.Most importantly – do not get involved too and do not forget about and taxesabout the risks.
I would appreciate your questions or your opinion about investing in gold and silver inthe comments.