Gold has been used as money throughout history and like most precious metals, is often used today as a hedge against inflation or currency devaluation. The traditional way of investing is by buying gold bullion and in some countries, it can be bought or sold at major banks.
Gold has always been considered to be a sign of wealth, beauty and prosperity and for this reason, has been coveted throughout the centuries. The early man dedicated gold to the glorification of their Gods. Gold was used to construct shrines and idols, and wealthy families had cups, plates, vases, and jewelry made from gold.
The fact that gold can be easily molded, formed and measured meant that it eventually became a trading medium throughout the world. Bartering became a thing of the past replaced by the production of gold coins.
The science of gold mining was advanced by the Romans who mined extensively by diverting streams and constructing equipment to help them in their endeavors. Gold was used to trade with countries such as India, China, Britain, Africa, and Egypt. Money (Gold) had created the world economy.
Gold bullion is a bulk of gold that is made into bars or coins. When you buy gold bullion is a safe way of preserving your wealth and passing it on to future generations. It gives you a solid base from which you can then consider other investments.
Assessing the reasons for investing in gold bullion has to take into account whether you’re a speculator, investor or saver. As an investor, you must decide if you want to invest in the short or long term. Having precious metals in your portfolio cushions you against economic disasters and allows you to speculate in other areas knowing you have a secure base when you buy gold bullion.
It’s possible to buy gold through a dealer. This, in reality, means your gold is, in fact, a promise to pay you the value of the gold if and when you decide to sell. Another way to buy gold bullion is through a gold bank. This means you have a gold bar/bars set aside in your name in a vault. The advantage to be had from purchasing in this way is that the bank pays for the storage and insurance and it can be converted back into currency.
Diversifying your assets means that if you decide to buy gold bullion, it’s best not to be dependent upon any one provider. Spreading your assets gives you more security and if you intend to keep bullion in your possession, you need to consider storage with a secure and specialist third party. You need to make sure you understand the legal conditions in which your bullion is stored once you have decided upon a location.
Today’s financial world is massively interconnected, which can result in a series of individual and corporate bankruptcies, putting financial institutions at risk. Therefore when you buy gold or even silver bullion it’s important to consider where best to keep it outside the financial system. If you have the facility for home storage, security has to be your prime consideration.
The advantages of buying gold bullion?
- The price of gold bullion fluctuates daily but is minimal compared to the stock and equity market.
- It’s a profitable investment during inflationary periods.
- It’s cheaper than investment in other financial markets.
- Its inflationary hedge offers stability whatever the market conditions.
- Gold Bullion is a preferable alternative when looking to diversify one’s portfolio.
…..and the disadvantages:
- When you buy gold bullion it will not earn you any interest.
- Its stability means the return on your investment is lower than other volatile financial investments.
- Gold is a physical asset and as such needs to be protected from theft or loss.
When you buy gold bullion you are protecting yourself and your family against fluctuations in the world economy and giving yourself a firm basis from which to consider other investment opportunities. Providing you buy gold bullion carefully and make sure your bullion is secure, you will have a monetary cushion to fall back on should you ever need to do so.
When you want to buy gold bullion, always research carefully all the options available. Make sure you’re getting the best price and quality by using only the most trusted and reputable dealers.