All That Glitters- Buying and Selling Gold

We have all seen the advertisements talking about gold, either the buying or selling of this precious metal. For many consumers looking to make quick cash or invest in something tangible, the rising price of gold makes this option attractive in a recovering economy.

There following are some factors you should consider prior to buying gold.

• Do you have a safe place to store it?

• Do you want to take possession of it in the first place?

• Do you want to go into the commodities end of trading?

• Can you afford the risk of a sudden drop over an extended time frame?

• Where do you purchase gold?

• Where do you sell it?

For most consumers; beyond a safe deposit box at our bank, there isn’t anywhere that we can reliably store something as valuable as gold. Is that going to be adequate if for some reason you would need the gold during non-banking hours?

Provided you opt to go to one of the myriad commodities or foreign exchange outfits and physically purchase and take physical possession of gold, do you have a way of transporting it?

Generally, the mindset of the novice investor in platinum, gold or silver is one of dire emergency and expectancy of terrible events in the future. This opens the door to further imaginings and scenarios of exactly how you will end up profiting or bartering for things you need. Incremental values of exchange have to be set up to accommodate the fact that one full ounce of gold is probably too valuable for anything you would want to barter for in the event of an emergency.

Thus, you find yourself in a situation of attempting to buy ½ ounce, ¼ ounce or even 1/10 ounce gold pieces – followed immediately by a realization that you probably should have some silver as well.  With each increment of precious metals comes a fee to purchase and a fee to sell, which can prove detrimental to your intended savings or profit building.

If you would happen to go into the commodities end and purchase quantity through leverage and possibly even consider risking margin investment as well, you will find yourself in a further quandary. A precipitous drop in market value overnight, since it is a 24/7 bid and ask process, could leave you devastated financially.

The final question you need to consider; what if things do in fact go “south”? What do I do with my precious metal investments? Where do I find someone that agrees with the value?

There is that impression of security, often a false impression which can evaporate in an instant. So, consider this avenue very carefully; before you react foolishly. Evaluate the true history of gold performance, adjusted for inflation, over the past 40 years. Consider the risks before investing your hard earned money.