How To and Why you should buy gold
I often hear people saying things like, "I want to buy gold, but don't have the money for an 1 oz", "I'm not sure if I should buy bullion or coins as an investment" Or "Gold coins are too expensive and I don't know how they are valued".
But the real confusion for most people is in not really understanding the difference between what is "Bullion" and what is a "Coin"
A numismatic "Coin" is a piece of metal of a specific monetary value, issued by a government that can be used to purchase goods or services for the amount marked on the face. EXAMPLE:- a 100 Dollar coin.
The word 'bullion' on the other hand simply means a refined and specific weight stamped piece of precious metal, of a specific purity. Usually referring to Gold, Silver, Platinum, Palladium etc that can be, but is not necessarily a coin. EXAMPLE:- A 1 oz gold bar that is 99.999 pure
Therefore bullion does NOT necessarily refer to a coin however a coin CAN be bullion if it is stamped with a specific weight, purity and monetary value. EXAMPLE:- The US's 2015 LIBERTY HIGH RELIEF $100 gold coin is stamped with not only the value of "ONE HUNDRED DOLLARS" but also with the "1oz 9999 Fine Gold" on it, making it both a "COIN" and "BULLION"
Gold Bullion vs Coins, and Bullion Coins vs Coins, what's the scoop?
Gold Bullion vs Coins...
Most precious metal coins, but not all coins, come in specific weights such as 1 oz, 1/2 oz or 1/4 oz. The same holds true for the purity of the coins metal with 99.9999 being the highest quality of refinement. Coins are designed to be used in their monetary form or with limited issues for collections. However, because gold is so soft 99.9999 is not best grade for coins and only reserved for those collecting the coins, as they would suffer brutally from wear under normal usage. Therefore many gold coined come in 22 Karat or about 90% purity.
Gold bullion is not designed to be handled on a daily basis but lends itself easily to the highest standard of refining and is obtainable in increments as small as 1 gram NOTE:- there are 31.1034768 grams in a TROY oz of gold.
As far as gold bullion vs coins goes... Do you want a collection that goes up in value based on the rarity of the coin or a refined chunk of gold that goes by the value of the metal by weight?
Resale is also a factor, how easy do you think it is to find a buyer for a collectors item such as an American 1866-S No Motto $20 gold piece valued at more than $1 million? On the other hand parting with a gram of 99.9999 fine gold will easily get you between
When you need to cash in, for what ever reason, be it to finance a world cruise or because the proverbial SHTF and you need to buy, trade or barter for necessities the ease of doing so may be dependent on what you have been collecting. Also, keep in mind 31 individual 1 gram pieces are going to be a lot more versatile than a 1 oz piece even though they amount to the same quantity.
Bullion Coins vs Coins...
Since all coins are valued on their rarity, grade, age, condition etc. it makes little difference whether you collect Gold Bullion coins or just Gold coins as a 1/4 oz 90 percent fine gold MINT coin that is ultra rare can easily be worth more than a 1 oz 99.9999 fine gold coin that has been handled many times or is in large supply.
Buying gold as an investment, security and hedge against the future
When you buy gold for gold's sake, what you are really looking for is a practical, versatile and tradable form of gold. In other words..."Gold bullion". Gold bullion comes in specific weights, specific purity (fineness) and you can buy or sell it for the current market price.
Now gold bullion comes in a variety of sizes from the 400 troy ounce size each, 1 of these bars is worth over $5000,000.00+ dollars at present prices (think Fort Knox) all the way down to small 1 gram bars that currently run around $50 for uncertified to $73 for Kinebar certified, (again... more on this further down).
While the large bars are an efficient way to buy physical gold, they are a bit of a problem for the average person or even a large company. These bars are mega expensive and can be costly and hard to liquidate. In short it's much more difficult and time-consuming to liquidate gold bullion in a single chunk that is worth over $500,000 than it is to sell the same amount of gold bullion in more convenient and tradable sizes such as 1, 2, 5 or even 10 gram bars.
"Kinebar", what is it and why look for it?
Kinebar gold is a bit more expensive for a reason... A Kinebar is a gold bar which contains a "Kinegram" to prove its authenticity. "Kinegram" is a trademark of OVD Kinegram Corp. (Switzerland). A kinegram is a security device embossed directly into a substrate, in this case the gold bullion. It is intended both as a security feature and for visual appeal. This certification is a secure method for a buyer to know that the gold they are buying is real, and certified as stamped.
Why buy Kinebar gold instead of simply 99.999 pure gold? Reason #1
Simple, because there are forgers out there and even public companies (see China Tungsten) who make "FAKE" gold that is of such a high quality, that even experts can be fooled. What they do is use Tungsten, who's properties are so close to gold as to be a perfect medium when gold plated, and make FAKE COINS and BULLION bars down to 1oz in size that pass almost all noninvasive tests.
Fortunately the smaller sizes as easily identified by scanning devices that can penetrate deep enough to detect non gold metals. Since gold is running near $1200/oz at present and Tungsten is about $13/lb, fake gold is a booming business.
Kinebar gold eliminates this danger. ALL kinebar gold is marked, stamped and certified for you so that you know for certain that what you have in your hand is actually what is stamped on the bullion.
Reason #2 for buying gold AND taking possession of it.
If you want gold in your IRA you are risking everything by buying gold. The IRS requires that IRA qualified gold be kept by a 3rd party in a separate location that YOU do not have access to. Taking possession of your gold disqualifies it for IRA eligibility.
Here is the problem... If the government wants to resurect the "Trading with the Enemy act" (see 1933, President FDR)... your gold savings are beyond your reach and the government will only give you $42.22 per oz (In 1971, President Nixon raised the price of gold to $38 an ounce, and in 1973, it was raised to $42.22 an oz and is still at that rate)!
The second problem... it is estimated that about 20% and as much as 45% of all gold stored in 3rd party locations is fictitious and only exists on paper or as gold certificates!
Reason #3 for buying Kinebar gold is affordability
As mentioned earlier an ounce of gold is around $1200 at this time, an amount of money that the average person usually does not have laying about and handy. Buying gold in 1, 2.5 or 5 gram increments makes it affordable to the average person. The average person can usually find an extra $100 a month (skip a few Starbucks coffees)
and buy 1 gram every month and even 2 grams on some months. Not only does this act as a exercise in savings but gives the buyer a physical product of value that is non perishable.
As for value....
In Caesar's time a praetorian could buy a fine toga for an oz of gold.
In Shakespeare's time a gentleman could buy a fine set of clothing for an oz of gold. In 1920 an oz of gold would get you a fine Sears suit or a $20 bill.
Today an oz of gold will still get you an Armani suit but that $20 bill will not even buy you a decent tie any more!
I can show you how to buy gold in affordable quantities or even get it for free. I can even teach you how to build an income to replace your existing one, all by just buying gold for your self and your future safety.
Contact me Udo Hoffmann, at firstname.lastname@example.org or (715)426-0518 for a quality assessment, detailed information or instruction on how to get started today.
No comments yet