Gold has always fascinated people and has always been a symbol of wealth and beauty. This is proved not least by the numerous historical grave goods, which come to light again and again after millennia. The popularity of the precious metal has been based in the past on its good processing properties for the production of jewelry or coins. In addition, it is not prone to corrosion. The rare occurrence of gold also creates a unique value.
For thousands of years we have been mining gold – from the adventurers in the gold rush of the 19th century to today’s high-tech mining in the major mines of South Africa or South America. Nevertheless, if we melted all the gold available in the world today and made a cube out of it, it would only be 21 cubic meters.
This scarcity combined with the popularity of the precious metal makes it an asset that has already survived many currencies and even civilizations.
Traditional gold investment
Despite its value stability for thousands of years, investing in gold is neither easy nor inexpensive. Traditionally, the precious metal is physically purchased and stored. But just the possession of physical gold has some disadvantages.
Since it is valuable and at the same time easy to transport, thieves still enjoy great popularity. This means that gold owners must keep their investment safe – either in a safe at home or in a bank. Both are associated with additional and above all high costs, especially for small investors.
Another disadvantage: Who wants to sell gold – whether in the form of coins, bars or jewelry – must first check the authenticity of the precious metal. But that too has its price. Professional investors are therefore seeking recognized warehousing companies to guarantee the authenticity of their top rated gold ira companies. And that causes costs again.
Professionals, on the other hand, like to use proven standards such as the “Good Delivery” standard of the London Bullion Market Association (LBMA for short). Here, quality and bar size are precisely defined. Such gold bars are numbered and registered at the LBMA. However, the standardized gold bars weigh around 12.4 kilograms and are therefore worth around 450,000 euros.
Alternatively, investors can also be inGold mines and gold mining companies invest by buying their shares on the stock market. As a result, they are indirectly involved in the success or failure of these companies in the gold market. As a rule, the prices rise or fall with the development of the gold price.
However, investments in sector companies are also highly volatile due to the strong bond with the gold price . Furthermore, the companies themselves are exposed to high costs due to the enormous energy and manpower requirements during production. Even with a rising gold price, this can also reduce the company’s profit.