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The beginners guide to Gold

In these days of political turmoil, economic uncertainty, and bank bailouts, it’s not surprising that investors are concerned about the safety of their financial investments. One investment portfolio that is looking positive lately is investments in gold, which is being touted as a wise and sensible investment option. Stocks and bonds swing wildly and sometimes disappear entirely but the UK gold price is relatively stable, thanks to the combined world economies dependence on gold which prevents weaker economies from dragging the price of gold down.

Experts predict an increase in the UK gold price despite the faltering US economy, due to increased demand from China. For the average investor who wants security and permanence, the answer is clear: never mind paper promises, buy bullion. Around the world, investors are putting their money in gold because gold is tangible – it has heft, weight, and is already in a liquid asset form. When it comes down to it, a “dollar”, a “pound”, or a “euro” , these are all just ways of saying “a certain amount of gold”. The investor can buy bullion (bars and coins) or jewellery, all of which are readily convertible to cash.

Gold Bars

  • Available in a range of sizes starting at 1 gram
  • Two forms available, minted and cast (minted costs more than cast)
  • The purest form of gold possible
  • The least expensive form of solid gold to buy

When investing in gold bars, one heavy bar has more value than an equal weight in small bars. Small bars are more flexible to convert. Gold purity of bars varies wildly around the world.

Gold Coins

  • Second most popular form of physical gold investment
  • Available in very small weights
  • Easy to store
  • Purity is slightly lower than bars to increase durability

For investment purposes, modern gold coins are required, as collector coins cost more than the value of the gold contained.

Gold Jewellery

  • Can be worn as fashion accessories
  • Costs more than bars or coins due to the craftsmanship involved
  • Stick with 18k gold or above

Gold jewellery comes in a range of purities but rarely 24k, as pure gold is too soft for practical use. For best selection, seek out a jeweller who advertises 22k or 23k gold and, naturally, shop around for the best price.