INVESTING IN GOLD – THE EASY WAY
Everyone knows that Gold is a good investment, particularly over the long term. Below are a few bits from financial articles and gurus telling you why Gold is predicted to be a good investment for the future.
Ok so everyone knows Gold is good but not everyone has the money, resources or know-how to buy Kruggerands, Sovereigns or Gold Bars.
This is how I do it – picked up from a gypsy I bumped into at an auction.
Buy a simple gold chain (I always go for 9 carat gold as it is the easiest and cheapest to come by) – start collecting 9 carat gold rings and string them on the chain until the total weight reaches 100g. This is worth around £400 at today's scrap prices. Then I put this one away somewhere secure (a safety deposit box or secure storage recommended) and start a new chain.
Old wedding rings are the easiest and cheapest to buy – on eBay, from auctions, Pawnbrokers, from antiques fairs or jewellers who sell second-hand jewellery. It doesn't matter if they are a bit worn or out of shape as you only want them for weight. Another good one is gold rings that have engraving or people's names on as these are usually difficult to sell and so fetch lower prices.
Gold is very easy to sell in quantity as scrap – many high street jewellers have a sign in their windows asking to buy old gold jewellery and if the rings you buy are any good you may well get a higher price than scrap.
It's a great idea for saving up a University or College fund for a new baby, a special holiday in a few years time, retirement or emergency fund. A simple way to save £20 or £30 every week, month or whenever you like.
This eBay shop has a supply of old 9 carat gold chains and rings
http://stores.ebay.co.uk/Yes-It-Is-Gold-Help-Yourself
ARTICLES
Gold has passed the $500-per-ounce mark in some style, says Dailyreckoning.co.uk. But don't think that its bull run is now going to take a breather, because it isn't. As DRDGold chief executive officer Mark Wellesley-Wood points out in his firm's latest newsletter, "Global gold production is set to decline dramatically", which will "generate a scramble for gold ounces" that will just keep pushing prices up. In the third quarter of 2005, gold demand rose 7% in volume terms and 18% in dollar terms.
Gold: how high can it go? Gold is nearly twice the level it was in 1999, when it hit a 20-year low of $253 an ounce. Now closing in on the $500 mark, it is at an 18-year high. Where next?
Why is the price of gold so high? The simple answer is that demand is strong and supply is tight. The trigger for last week's run-up was the suggestion by Russia's central bank that it might double the share of its fast-growing reserves that it holds as gold from 5% to 10%. Russia's move could mean a gold purchase of 500 tonnes of gold bullion, enough to absorb all of Russia's gold production for three years. For some time now, central banks have been the main sellers of gold in the market (under an international agreement regulating their sales they are allowed to sell a total of 500 tonnes a year between them), but this suggests that the banks will soon be net buyers instead.
Are there other sources of demand? Yes. There's strongly growing demand for gold jewellery, especially in the rapidly expanding Indian and Chinese markets, as well as the Persian Gulf where disposable incomes are rising fast and, as a result, so is the desire for status jewellery.
At the same time, gold has many more practical uses than it once did. It is used in pacemakers, mobile phones, tests for HIV and fertility, as well as catalytic converters and nanotechnology applications. Figures published last week by the World Gold Council also show that global investment demand for gold rose by 56% in the three months to September.
This is partly because gold has become easier to access thanks to new trading instruments (see below); partly because the new rich of emerging economic giants Russia, India and China invest more in gold than those in the West; and partly because of gold's historic role as a safe-haven 'insurance commodity' in troubled times. Overall, demand for gold in tonnage terms has now risen for seven consecutive quarters and has been consistently higher than supply since 2003.
The main attraction of gold has long been the fact that its price performance tends to be negatively correlated with other asset classes: it goes up when stocks and bonds are falling. This means it has historically been seen as an ideal safe-haven investment for investors who want to diversify and preserve capital. But if investors really have started to see gold as a mainstream investment - not just a safety-first currency and inflation hedge - the upward move in gold prices could be explosive.
