4 Gold Investor Tips For Precious Metals Profits

tips for gold investors hedge against inflation precious metals investing

Before we dive into these precious metals investing tips, it is important that we go back in time to get a refresher on how gold became valuable in the first place, and learn a bit of financial history. This way, you will get to appreciate this precious mineral the earth has blessed us humans with even more golden opportunities. Gold has a rich history indeed leading up to our shaky 2024 economy!

Since as far back as 2000 B.C gold has been in existence, however, what it was being used for at that time remains unclear. It wasn’t until 560 B.C. when the ancient Egyptians began making jewelry out of the precious metal that it began to serve as a currency. At the time, there was a need for a standardized payment system that would ease trade; this was done by the creation of sealed gold coins and it worked because gold was already being accepted all over the place as a means of exchange. 

Following the advent of this shiny metal as a form of money, its importance and value continued to grow spreading far and wide even to the UK and Europe. In 775, Great Britain joined the party as they developed their own metals-based currency. Ever since, this valuable metal has been used as a symbol of wealth and power throughout the world. 

In following this tradition, the U.S government in 1792 established the bimetallic standard which stated that every monetary unit in the country would be backed by either gold or silver. This law didn’t last very long as a series of events led to its abandonment in 1971 when the country’s currency ceased to be backed by any precious metal. At this moment the United States economy was sent down a road of inflation and instability, according to many economists and critics. 

Gold In The Economy Today 

In the economy and the society at large, gold still remains valuable and important despite it not backing any country’s currency. The balance sheets of many financial organizations and even central banks are proof of this fact. Currently, these institutions hold one-fifth of the earth’s supply of gold above ground. Furthermore, a few central banks have strengthened their gold reserves by adding more of the precious metal; an act aimed at protecting their country against any fall in the global economy in the future. Click here to learn more about gold reserves in 2024. 

Tips For Investors 

Now that you have been reminded about the value of this metal, let’s go back to the main point of this article. There are many ways one can invest in gold and following some of these ways, one doesn’t have to physically own the shiny metal to make money from it; however, that is a bad investment move as you will get to see in the first tip. 

Own It Physically 

As have been established already, gold’s most basic function is as money. Until 1971 when America abandoned the gold standard under Nixon’s government, it backed the Dollar and following the abandonment of the bimetallic standard, the fiat system was introduced which involved paper moneys that weren’t backed by the precious metal. 

Since no currency in the world is back by the physical commodity, the gold paper market has grown incredibly as there are many people eager to buy money backed by it. This is clearly evident if you examine the commodity exchange market (COMEX), where it isn’t uncommon for there to be paper claims of as much as 500 for every ounce of actual gold available on the exchange market! 

A lot of people who have bought the metal on paper believe they own it physically; however, when they go to claim it, they will find out sadly, that there isn’t enough physical gold available. This is why if you will be investing in this metal as an insurance should the current monetary system crash, you should buy it physically and not on paper. Visit https://www.britannica.com/topic/commodity-exchange to learn more about the commodity exchange market including gold precious metals. 

Buy Only Liquid Bars And Coins 

The whole idea of investing in gold in the first place is to be able to convert it to physical cash anytime it becomes necessary; to do this you wouldd have to invest in the most liquid coins and bars, especially coins. 

Legal tender coins like the Australian Nugget, the Australian Philharmonic, or the Maple can be liquidated easily for cash anytime. Although bars can be liquidated, they are usually too bulky and heavy to move around making coins a better alternative. 

Make sure you buy coins and bars from trusted dealers to get what you are paying for. There are so many shady dealers who sell lower karat gold coins and bars for the actual market price. 

gold investing bullion bars

Make Sure You Own It Directly 

Many countries limit gold storage outside of the traditional banking system and this greatly affects the quantity of the metal individuals can store close to them. This wouldn’t be a problem for people who do not have that much money to buy the metal physically. 

However, for people who are wealthy enough to buy large quantities, they should consider moving to places like Liechtenstein or Switzerland that have strong private property rights. However, if this isn’t an option for you, and you would rather store your precious metal with an authorized storage company, make sure you have complete control over it, and that the company has no say in whatever you choose to do with your gold. 

Buy With Your Savings, Not Credit 

Gold is a hedge against the crash of the current monetary system. Our current economy relies on credit and debt which is unhealthy. In the event that the system crashes, people that have purchased the precious metal with credit will lose it since it isn’t technically theirs-they owe someone or some bank or financial organization. Your best bet is saving up and buying it with your money, that way, it is yours and yours in its entirety. 

If you are ready to start investing in gold, start by choosing the right broker. For legit dealers, you can enquire about Noble gold or approach your bank for recommendations. 

Precious Metals Investment Conclusion 

Gold investment is one of the best forms of investment one can make to protect their financial future but, doing it right might be tricky and requires caution and expert advice. That said, you can never wrong if you own the precious metal physically as long as it isn’t bought with credit. Gold is good, so claim your golden opportunity for precious metals profits in 2024 and 2025!

New Frugal Finance Blog Posts & Articles