The Pitfalls of Investing on the Gold Market @ Stock Market Trading ...

Posted in October 2, 2011 ? 3:43 pmh.Verlie D. BlackstockComments Off

Ok so you have been convinced that investing in gold and silver is the smart thing to do in today?s economic climate as the precious metal rate these days continues to rise. Additionally you realize that you need to act and purchase gold opportunities or silver investments at this time. But the question is; what forms of gold and silver should you buy? How do you buy? What types do you purchase it in?

One of the most essential things to remember is to buy real gold and silver not fool?s gold and fool?s silver. You need to purchase gold coins, purchase silver cash and gold and silver bars, physical precious metals that you can hold in your hands. Now you don?t actually have to keep them inside your hand, you could have them stored in one of Brinks two locations.

However physical silver and gold is the form to hold. There are lots of other forms of gold and silver out in the marketplaces and many of them are nothing but fool?s gold or fool?s silver in my opinion. Number 1 would be the exchange traded funds, otherwise known as EFT?s. It?s widely accepted in the gold community that the exchange traded funds don?t have all the silver and gold that they say they do to back them up.

What you are really buying is price contact with the precious metal rate today when you buy these funds. You are not buying bodily gold and silver that you can hold and touch. The purchase of physical gold and silver is one of the the majority of private investments around. It is a transaction in between you and the dealer and nobody knows about this. When you purchase EFT?s you are putting that private investment back into the hands from the banks which have caused the entire economic financial crisis in the first place. Have confidence in them to your own peril.

Another thing to watch out for would be the pool company accounts and records. They probably don?t have all of the gold and silver to back up the actual investments in the pool company accounts. Basically you are investing in futures contracts. Which means you are getting exposure to gold and silver costs again and never the real thing.

There?s also numismatic coins or collectible coins. Now whenever you buy a numismatic gold coin, you could be having to pay many times the actual gold or silver content that is within the coin because you are actually spending money on the rarity and how much someone else covets that particular coin. While, with gold coins as well as bullion bars, their value is derived from the world spot silver and gold spot price at any given moment. You will find hundreds or even thousands if not millions of purchasers out there with regard to gold and silver bullion coins.

The other thing to appear out for in enthusiast coins is that in certain occasions ? state when there is high inflation, you might have thousands of these types of coin collections come to market at the same time resulting in the numismatic premium all of a sudden disappearing. So that coin you paid thousands for might fall in price to its silver or gold value. Simultaneously physical gold and silver coins might be doubling, tripling as well as quadrupling in cost.

One last factor, beware of influence; it is a two pronged sword. The actual gold chart and the silver chart show values rising steadily on average for the last few years, making money for those holding the actual physical metal. A large number of individuals using leverage of border account have actually lost a lot of money. Numerous unscrupulous sellers will talk you in to buying on margin and can continue to sell you much more as the price goes up. However all marketplaces have unpredictability and when these people drop you get in a border call situation. Many of these accounts are liquidated baffled before you are permitted to deposit more income into the accounts to cover the margin phone resulting in you losing money with what should have been a lucrative market. Depart the leveraged accounts towards the pros especially in the commodity and choices realm.

Michael works in the finance sector. His website is about the Dubai gold prices and other gold markets.

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