What are the benefits of investing in precious metals?
What are the benefits of investing in gold?
What are the benefits of investing in silver?
What are the benefits of investing in platinum?
What form do most precious metal bullion pieces take?
Will bullion dealers repurchase bullion at the same price they initially sold?
How can I sell precious metals that are already in my personal possession?
If I select home delivery for my precious metal bullion, what other charges are applicable?
What are the best methods of storing precious metal products in my personal possession?
What are the causes of the notable differences between the ask prices and bid prices?
How will a retail dealer commission fee tabulate into my breakeven point?
Are precious metal bullions coins possible to be used as legal tender?
How can I authenticate my bullion coin purchases?
Is it true the ownership of gold was illegal at various points in United States history?
Are there limit restrictions on the amount of gold one can own?
Do individuals have to report bullion transactions larger than $10,000 to the federal government?
Is it required for investors to report their gold bullion purchases to the federal government?
Expert investors have for years recommended to clients to diversify their portfolio. Oftentimes, this investment advice entailed investing around ten to twenty percent of one’s assets into tangible items, such as bullion coins, platinum bullion, silver, gold, and other precious metals. Given the volatile market and economy of today, tangible precious metals are a very sound strategy for diversifying one’s investment portfolio.
The top three reasons, which are by no means the only ones, for investing in precious metals include:
- Precious metals have offered investors a consistent hedge against declining U.S. Dollar value. Since 2001, the United States Dollar has steadily declined more than 30% up until 2004. This decline has only further exacerbated itself and other problems for investors in the years following, especially in the year 2008. The U.S. Dollar may very well be losing a sizable portion of its value; however, precious metals are traded globally with a consistent level of interest by domestic and foreign investors. The main three metals, gold, silver, and platinum, garner a large portion of attention during times of economic fallout due to their relatively isolated value from the U.S. Dollar. For investors, looking to diversify into precious metals may be a solution to hedge against the falling fortunes of the U.S. Dollar.
- Precious metals have offered investors safe bet in times of political, economic, and societal volatility. The financial markets in the United States are undeniably under siege due to a litany of factors. The results, however, are sharp declines in investments, decreased U.S. Dollar value, and most securities trading at nearly forty percent less than their year to date value. In periods of uncertainty, tension, change, or even, panic, precious metals have offered investors incentives to hedging their losses. Likewise, as the events and disturbances in society worsen, the demand for these precious metals will only exponentially increase as well. Precious metals have previously been and more than likely will always be one of the most trusted forms of maintaining wealth and assets, regardless of turbulent economic times.
- Precious metals should intrigue investors due to a large profit potential and unmatched price appreciation. During the periods of economic downtrends in the early 2000’s, investors both small and large saw a huge decrease in the assets and securities they spent their entire lives accruing. During these bear markets; however, the value of gold and silver increased nearly forty percent. As the decade continued into the economic recession in 2008, gold and silver prices continually rose in the face of economic and investor panic. When dividends, returns, and gains from paper investments, such as stocks and bonds, decline or disappear, precious metals receive a predictable and profitable increase in demand and value.
Investors have long utilized gold as an excellent safe haven for their personal wealth in times of precariousness. Gold, throughout the world, is viewed as a superior precious metal with a constant level of importance, interest, and prominence from investors, consumers, and retailers. In many instances, gold is a financial standard that is deeply imbedded in the psyche of investors and workers throughout the globe. Gold is the ultimate insurance against economic and financial difficulties. Typically speaking, the value of gold conversely correlates to the actions of paper securities and other investments. In fact, most financial analysts recommend investors have at least five to twenty percent of their assets tied directly to precious metals, especially gold, in the event of a significant downtrend in paper securities. Throughout history, gold has consistently maintained an unprecedented record of profitability for the holders of these metals. Likewise, the possession of gold bullion is an extremely private asset, which investors do not need to report purchases of to any overseeing entity.
Like gold, silver has also maintained an undeniable record of accomplishment regarding demand and profitability throughout the past several centuries. Many jewelry items, as well as electronic devices and others, utilize silver on a regular basis due to the precious metal’s resistance to corrosion, conductivity, and malleability. Silver, much like its counterpart gold, regularly gains in value and price during times of economic, political, and social strife, oftentimes in the face of declining paper investments and other securities. Even in times of inflation of essential goods and commodities, such as oil, natural gas, wheat, corn, soy, and rice, and deflation in luxury goods, silver consistently maintains a marginal level of profitability, not to mention security for investors.
Alongside gold and silver, platinum is a forerunning precious metal that has irreplaceable use in the manufacturing industry as well. In fact, over twenty percent of all consumer goods manufactured require the use of industrial commodity platinum. Likewise, the availability of platinum is extremely limited, and over ninety percent of the platinum available in the global markets are derived from South Africa and Russia. Between these two countries, the price of platinum can greatly fluctuate, giving investors ample opportunities to make their investments in platinum profitable.
Precious metal bullion can take numerous forms that may entail premium costs for the creation of these pieces. In many instances, this will be referred to as a fabrication cost or a bar charge, which will be on top of the ask price charged for the precious metal itself.
No, in fact, the margin of profit between the buy and sell prices for dealers is relatively small in comparison to other inventory industries. This marginal level of profitability allows dealers to remain afloat when buying and selling gold, silver, platinum, and other precious metals.
Individuals already possession precious metals may have several options to sell these products, depending on the type and form of the precious metals they own. Several known buyers of precious metals and bullion include coin collectors, the original precious metal dealer, banks, lending institutions, and other precious metal dealers. Before selling these products, however, owners oftentimes will have to have their precious metals re-assayed at their own cost before being offered a sale price. Likewise, sellers of precious metals must sell the entire unit possessed, and not a portion of coin or bar being possessed.
Fabrication, otherwise known as bar charges, will always be present during the creation of a precious metal piece. Additionally for home delivery, buyers will incur charges related to shipping, including postal insurance, as well as all applicable local, state, federal, and tariff taxes in your home location.
The storage of precious metals and other bullion are entirely personal preference of investors; however, commonly used solutions include home safes, safety deposit boxes at banks, or bonded insured warehouses.
Ask prices, or the price paid at the time of purchase, will contrast with the bid price, or the price obtained during a sale, due to a number of factors. The spread in the price is made up of market conditions relating to supply and demand, as well as the profit margins of the wholesale dealers. In order for investors to break even, the bid price must be larger than the ask price due to dealer commissions and other applicable retailer and bar fees incurred during the investment process.
Generally, all charges and fees paid, including commissions to retail dealers, should be tabulated to arrive at your final cost. This will then be divided by the quantity of product purchased. The resulting figure, in addition to any incurred storage or security fees, will then be equal to your breakeven at the time of your purchase.
Technically speaking, if the bullion coins are government issued coins with a face value, then the coins are legal tender. Being legal tender, the coins may cross national and international borders without taxation or tariffs typically imposed on non-denominational bullion coins.
With each gold bullion coin or bar, there will be a maker’s mark, as well as a statement of fitness and weight stamped on the bullion coin, bar, or ingot itself. The bullion piece itself will then bear a verifiable statement of authenticity and certification from the refiner or mint. Likewise, these pieces contain specific gravities and other facets that allow for veritably easy testing of authenticity as well.
Yes, in the United States from 1933 until 1974, citizens of the United States could not legally possess, own, buy, sell, or trade gold bullion without special licensing from the federal government. However, in 1975, the United States government uplifted these restrictions, which allowed for the facilitation of the free flow of trade of gold.
No, ownership of gold or other precious metals in the United States is subject to no weight restrictions.
If the transaction entails the use of cash or other cash instruments totaling more than $10,000, investors must go through the proper channels to report these transactions. Otherwise, transactions involving the purchase or sale of bullion in amounts larger than $10,000 using bank wiring or checks do not need to be reported.
Local, state, or federal governments do not collect or obtain information regarding the specific amount of gold or other precious metals an individual might own. In fact, the Department of Treasury, through the United States Mint, sells gold Eagle bullion coins regularly though dealers, but does not track the sales to private individuals.
