September has come and gone, and it was yet another exciting month for gold, silver, and other precious metals. Several important developments have affected the prices of gold and silver over the last month and have laid the foundation for potentially important developments in the months to come. Read on to find out more.
Here's a quick recap on prices (all prices per OZ):
Gold started the month at $1,395.95. The market was quite volatile with prices dropping to $129.96 on the 18th before recovering to $1,340.46 at the end of the month.
Silver prices were also volatile, starting at $23.54 before surging to $24.42 on the 3rd. Prices then followed a bumpy road downwards before landing at $21.75 to close the month.
The United States government has now shut down. So far, bullion prices have not really reacted to the shutdown. This was widely expected as most investors already realized that a shutdown was imminent and had reacted accordingly. While a short term shut down will likely not result in major movements in the market, if it continues for an extended period of time, bullion prices may rise moderately.
If United States government defaults on its debt, however, expect prices to spike. While the United States government may shut down or have to take other emergency measures, it's unlikely that it will default. Still, with prices so low and the possibility of a major fiscal crisis, now might be the time to buy precious metals. If the government is able to quickly work out a budget and debt deal, however, bullion prices will likely not be heavily affected.
The Chinese Central Bank called for increasing the number of firms allowed to import and export gold. At the same time, the government will also be easing restrictions on individual buyers. It remains to be seen if the Chinese government will act on the Central Bank's suggestions, though so far the prognosis looks good. Chinese customers are already among the world's biggest purchasers of gold, so these policies could cause a demand spike, which will send prices upwards.
India, on the other hand, has been trying to decrease the amount of gold being bought in the country. This might help explain why silver imports have recently spiked by more than 310% in the first quarter of the fiscal year. Exports for Indian made silver jewelry have also expanded by 156%, also adding to the increase in demand. Whether or not these developments will push silver prices higher remains to be seen, but India has traditionally been one of the largest purchasers of precious metals.
Meanwhile, the world continues to stand on shaky ground. Beyond the ongoing debt ceiling problems in the United States, the European Union economy continues to stagnate. At the same time, China's own debt problems continue to worsen and some analysts are warning that the country could see a fiscal crisis on par with the 2009 U.S. Fiscal Crisis. With so much uncertainty in markets across the globe, investments in gold, silver, and other precious metals could turn out to be wise investments.
Not everyone, however, has such a bullish outlook. A group of analysts at Citi have predicted that silver prices will angle downwards throughout 2013. The group cited strong supply from mines as a key reason why prices will continue to drop. Silver prices are already down by nearly 30% for the year, and if they decline any further, silver could become a great buy.
If you are investing in bullion then it is a good idea to take the time to learn about the basics of handling and storing your coins or bars. The first thing you should understand is that they are an investment and should be treated as such. One of the most important things therefore is to discuss securing your coins and protecting your investment. The simple fact is that thieves would love to get their hands on your bullion coins. They are small, easy to transport, and can be melted down and made untraceable. Protecting your bullion should be a top priority for any investor. Of course, most people are honest and would never dream of stealing from you. When it comes to security, however, it is better to be safe than sorry.
Storing Bullion At Home
If you decide to store your bullion at home, you should consider keeping your investment secret. If you feel the need to talk about your bullion investments, you could tell people that they are stored with a special security company, even if that's not true. No, we don't advocate lying, but the truth is, there is really no need for anyone to know about your investment except you and your closest loved ones. As the old saying goes, “two people can keep a secret if one person is dead.” That may sound a bit harsh, but when storing your gold at home, it might be best to keep this information private.
You also need to know that many insurance policies do not cover bullion coins. You read that right, your homeowners insurance may not cover bullion coins as part of your standard coverage. Not only does this make security all the more essential, you should also make sure that you talk your insurance agent to see if your investment is covered, or if you can purchase a rider to cover bullion.
Most likely, however, your homeowners insurance will not cover gold, and your insurance company will not be able to offer a rider to cover it. In this case, you can check to see if any bullion insurance is offered in your country or state. In some cases, there may be insurance policies that you can purchase to protect your coins. If you decide to purchase insurance, make sure you read all of the fine print. Check to see what your gold is covered for. It's best to have a policy that covers a wide range of situations, such as robbery, fire, natural disaster, and everything else.
Still, if you do decide to store your bullion at home, it's a good idea to invest in a high-quality safe. This safe should be large, heavy, and bolted to the ground or into a wall. After all, if burglars can simply steal your safe, they will do so. Combination locks may be preferable to electronic locks, as you won't have to worry about batteries or a power source. You should also try to place your safe in an out of the way place, such as a closet, the basement, or even your attic. If possible, you should avoid placing your safe in your home office as burglars know people often put safes there.
Make sure your safe is fire proof and heat resistant. There are many options for fire proof safes, and we recommend you purchase safes with the highest fire resistance ratings. Gold and silver wont “burn” in a fire, however, if temperatures get hot enough, your bullion can melt. While the primary value of bullion comes from the metal contained (which you may be able to recover, even if your coins melt), your investment will lose some of its value.
Storing Bullion in a Secured Vault
Another option is to store your bullion in a secured facility, if one happens to be nearby. With a storage facility, your gold will normally be placed inside of the a large and heavy vault. While setups vary from company to company, often you will be given your own safety deposit box or safe within the vault. This adds extra layers of security and ensures that only you can access your bullion.
Often, companies run storage facilities that specialize specifically in securing bullion and other precious metals or minerals. These facilities will feature state of the art systems, are often guarded by armed guards, and will usually feature insurance policy options. Sometimes these insurance policies are optional and require an extra fee. Other times all investments will be insured.
If you decide to store your bullion in a specialized security facility, make sure you take the time to research and visit the options available in your area. Read all of the fine print regarding their policies, and make sure you clarify any questions you might have. And of course, make sure you check into insurance policies and details.
There are many ways to secure your bullion investment. Remember, it may be a good idea to keep your investments private and tell only those who actually “need to know.” Bullion isn't something to brag about, its something to ensure your future prosperity, so make sure you are protecting it. You should consider insurance where available, and if you store bullion at home, invest in a good safe. If you decide to invest your bullion in a secured vault, make sure you review your options carefully and read all the fine print in the contract. Protecting your investment from theft and damage should be a top priority for any investor.
Investing in gold and silver bullion can be a great way to earn solid returns and protect your wealth. Every investment carries risks, of course, but bullion has proven to be one of the most stable and reliable investments around. For thousands of years, humans have sought to acquire gold and silver and have been minting coins. This long history of desire makes bullion an attractive investment. Still, caring for bullion does require a bit of knowledge and skill. In the following article, we will outline some key points to help you care for your bullion and protect your wealth.
Caring for Gold Bullion
Gold is one of the easier metals to care for. In fact, this is one of the reasons gold is such a sought after bullion metal. Gold is very difficult to tarnish, does not oxidize under normal conditions, and otherwise maintains its chemical and physical properties. Gold is nearly chemically inert and will not react with most chemicals or corrosive agents. Gold can be dissolved by nitro-hydrochloric acid, though it is unlikely you will encounter this strong corrosive agent. Gold is also highly resistant to scratches and scuffs. All of these properties make gold easy to care for and as a result it is a favorite among investors.
One thing to remember, however, is that gold is a very soft metal. It is possible that you could dent a gold coin if you drop it onto a hard surface or from a considerable distance. For these reasons, it is often best to keep your gold coins in a sealed case and handle them sparingly. You should seal gold coins separately in their own sealed cases and keep them in storage as much as possible. Still, most gold bullion is valued for its metal content, so if you do damage a gold coin, not all is lost.
Caring for Silver Bullion
Silver offers another great investment opportunity. Besides gold, silver is the most common choice for bullion coins. Unfortunately, however, silver is not as resistant to damage or wear and tear as gold. While silver is a resilient metal, it can oxidize under normal conditions. At the same time, silver is easier to tarnish, scratch, and scuff. Make no mistake, silver is not a fragile metal, but it will require a bit more care than gold.
Silver can easily be tarnished by Hydrogen Sulfide, which is found in numerous things, including fossil fuels, food, paint, and latex. So don't use latex gloves when handling silver and make sure your hands are clean! It is very easy for hydrogen sulfide to accumulate on your skin and then rub off onto your coins, if you should choose to handle them. For this reason, you should handle your silver bullion coins sparingly.
Like gold coins, you should keep your silver coins stored away and handle them sparingly. Silver coins should be either encased separately or stacked into a tube. Do not store them in a ziplock bag or in any other way that will allow them to rub up against one another (and thus cause friction and damage). In order to reduce tarnishing, you can also add some charcoal bought from a pet store and silica gel to reduce moisture and other conditions that could cause silver to tarnish.
Will Scratches and Tarnish Diminish the value of Bullion Coins?
It is important to understand that scratches and tarnishes generally do not affect the value of bullion coins. Bullion coins are valued for their weight and purity, not their shine or condition. Of course, a large gauge in a bullion coin could reduce its weight, but usually small scratches or a thin layer of tarnish will have little impact on the value of a bullion coin.
That being said, scratches and tarnishing can have a slight impact on the value of bullion coins. The simple fact is that people are drawn to things that are in “mint” condition, including bullion coins. This means that sometimes people, especially in the secondary market, may be willing to pay a bit more for a mint condition coin. Mint condition coins may also be more liquid as there will be higher demand for them. Dealers, however, usually pay more attention to weight, purity, and where the coin was minted.
The value of a numismatic coin, on the other hand, can be greatly impacted by scratches and tarnishing. Numismatic coins refer to coins that are valued for reasons beyond their weight and purity. Ancient coins from past civilizations, for example, are no longer valued for their metal content but instead as ancient artifacts. The value of these coins can be greatly impacted by tarnishing and scratches.
Wrapping Up: Keep Your Bullion Protected
While bullion coins are relatively sturdy, that doesn't mean that you should neglect them. Remember, bullion is an investment, and like any investment you should care for your coins to ensure that they remain in the best shape possible. Careful handling and storage can ensure that your investments retain their value. Don't treat your coins like toys and only handle them when necessary. By and large, you should keep your coins safely stored away, and only take them out for cleaning, to be sold, or for other important purposes.
A lot of people have come to realize that investing in Gold or other precious metals can be a great way to protect their assets and wealth. Still, even if one decides that they want to invest in Gold, they are often confronted with the question of “how” to invest. With precious metals there are numerous options, including bullion, futures, stocks in Gold mining companies, and funds in Gold mining companies. In this article we will explain why bullion is the best option for most investors. Let's start by outlining some of the distinct differences between the four previously mentioned ways of investing Gold (or other precious metals).
Bullion is probably the most straightforward type of investment. When you purchase bullion, you purchase coins or bars of a specific carat of Gold. Most bullion coins are pure Gold and all high quality forms of bullion are weighed out to a very exact amount. You should not underestimate the time and care that is taken to ensure that the coin features both an exact weight and exact carat. The biggest risk with Gold bullion may be storing and securing your investment. Still with all of the advanced safes and security measures now available, this should not deter you.
Futures are a bit more difficult to explain, but in essence a futures contract is a contract that ties two parties to buy and sell something at agreed upon prices at a future date in time. So, if you think Gold prices are going to rise from USD 1,300 today to USD 1,800 within a year, you can buy a futures contract to guarantee the sales price in today's prices. Then, if Gold prices rise, the value of your futures will also rise. Usually you will then sell your futures contract to another investor. Once the end date comes due, the Gold will need to be delivered to whoever owns the futures contract. Does this sound complicated? In many ways it is, and this is one reason why many investors shy away from futures contracts.
Investments in stocks and funds means that you invest in a financial instrument that is tied to the mining of Gold. For example, you might buy stocks in Barrick Gold, the largest publicly traded Gold company in the world. The basic theory behind investing in such companies is that if Gold prices go up, stock prices in Gold mining companies should also go up. Why? If Gold mining companies are able to sell Gold at a higher price, their revenues and profits will increase. Gold mining funds are portfolios made up of the stocks of numerous Gold mining companies rolled up into one package. In general, funds help hedge risk against the failure of any one company.
We will be blunt, if you are looking to make investments based on the actual value of Gold, you should quickly strike stocks and funds off of your list. There are simply too many factors involved in stock investing that could derail your investment even if Gold prices go up. For example, you might decide to invest in Barrick Gold and suddenly Gold prices start to rise dramatically, pushing Barrick's stock prices up. At first your portfolio looks great but then news breaks that a major accounting scandal has been uncovered at Barrick Gold. Suddenly, the company's stocks are tanking, even as Gold prices continue to rise. In this situation, you correctly predicted that Gold prices would rise but lost money anyways.
And besides scandals, numerous other things could have a severe impact on Gold stock mining prices, even as Gold values continue to go up. Consider this, a civil war might break out in a nation with rich Gold deposits and it turns out that the companies you have invested in obtain most of their Gold from this nation. Suddenly, their mining operations have been disrupted. Now Gold prices are rising because supply is decreasing, but your stocks are plummeting because the company you invested in just lost its mines to an armed rebel force. There are also many more other circumstances that can affect Gold mining stock prices, even if Gold prices are going up. Bad management, a workplace accident, and numerous other things could devalue your stocks.
Futures might be a good investment for some people in certain situations. If you are afraid that you will not be able to properly secure your investments, for example, futures may be a good investment. Still, futures undermine one of the most important aspects of investing in Gold. As the last few years have proven, financial markets are extremely risky and there is a genuine risk that a financial crisis could emerge that could literally wipe out financial markets. If this happens, there is a huge risk that you will lose most, if not all, of your investment in futures. One of the most important reasons investors invest in Gold is to protect against disruptions in financial markets. Investing in futures ties you to these very same financial markets that Gold investors are trying to diversify away from.
This leaves Gold bullion as the best possible Gold investment. With Bullion you will have physical precious metals that will stay in your possession even if world financial markets tank. Further, you will not be vulnerable to the individual circumstances, such as scandals, that can quickly overwhelm individual companies. Instead, you will be tied to the swings in general market prices.
As a side note, the same arguments outlined above apply to Silver, Platinum, and other precious metal investments. So if you are considering an investment in precious metals, bullion should be at the top of your list!
Besides Gold, no other metal has been as important of a bullion metal as Silver. Well regarded for its shine and chemical properties, Silver makes a great investment for precious metal investors looking to diversify their holdings. Silver has also enjoyed a long history and there is no reason to doubt its future as a major bullion metal. As you will find out, Silver is an especially attractive bullion coin due to its long history and its numerous use values.
Silver enjoys many important physical properties. It has a melting point of 1763.2 degrees Fahrenheit, making it stable under most conditions, but also easy to melt with the proper equipment. Silver has one of the highest rates of thermal conductivity, and also optical reflectivity. In fact, silver is a preferred material for premium mirrors. Silver was also instrumental in the development of early photographic techniques.
Silver has a long history of being used in a variety of applications, from minting coins to being molded into “silverware.” On one hand Silver is quite malleable and easy to work with. On the other hand it is a bit more sturdy than Gold, making it a better metal for certain applications. Silver does not tarnish easily, however, certain molecules, such as Ozone, can cause it to tarnish. It's important to keep this in mind when storing Silver as bullion.
Silver is also far more abundant than Gold or Platinum, but is in high demand for use in industrial applications and for making jewelry and other fine goods. This means that prices will likely remain stable and increase as time goes on, especially as people buy more electronics that use Silver. Silver oxide is also used in batteries for small electronic devices, such as watches, because the material holds a charge for a very long time. Silver is also used for creating high quality musical instruments, medicine, and a wide range of other applications.
Further, precious metals, such as silver, are frequently used in jewelry and other luxury items. This is important, because the world's population is slowly growing wealthier, creating increasing amounts of discretionary income that can be spent on expensive luxuries, like jewelry. So as countries continue to emerge and populations find themselves with greater amounts of discretionary income, expect spending on jewelry to rise. And for an investor holding onto Silver bullion, that increase in price will result in big returns.
Mentioning all of these uses is important, because they create demand for Silver. And demand, in turn, will stabilize and raise the price for the metal. All investments are determined by market forces and when demand outstrips supply, prices tend to trend upwards. The high demand for Silver makes it a safe and stable investment, and can help hedge against declines in Gold or other precious metals. Remember, a basic rule of investing is to diversify your portfolio!
Silver also has a long and illustrious history. Silver was used by the Roman Empire to mint coins thousands of years ago, so its history as a bullion coin is well-established. Further, when the New World was “discovered” the Spanish quickly found that Silver was in exceptional abundance. The Spanish mined Silver literally by the boatload, and this abundance of wealth help shaped the course of history.
Now, it is believed that most of the world's Silver mines have been discovered. Yes, most likely more mines will be found, but the Silver “bonanza” has likely come to an end. In fact, analysts now believe that there are only 1 billion ounces of unmined silver left in the world, compared to 11 billion just a hundred years ago. This means that the increase in supply will slow, while demand will only continue to rise. And that means that prices should rise in the long run!
This long history has made Silver a very common bullion metal, and is arguably the easiest type of bullion to find besides Gold; plus it is affordable. Right now you can purchase 1 oz 2012 Silver Mexican Libertad Coins from bulliondeals.co.nz for only $38.53 NZD. If you are looking for the always popular American Eagle silver coins, you can pick one up for only $39.03 NZD, which is actually less than current prices being offered by the U.S. Mint!
Silver bullion definitely warrants a close consideration by any serious investor and can help hedge against declines in the stock market, real estate investments, or a declining national currency. If you are interested in precious metals (and you should be), you should consider building a diverse portfolio that includes Gold, Silver, and Platinum. This way, you will spread out your risk and maximize your profit potential. If one metal suffers a decline, there's a good chance that growth in your other metals will offset any losses. Right now, precious metals are selling quite cheap in the face of a slowing global economy, so they are becoming an even more valuable investment.