How To Weigh the Benefits and Risks of Gold Investment

As America’s economic condition spins off some degrees away from its former glory, investors are looking at gold as insurance. Recently even the golden glitter has captured the attention of Russia and China, seeking to raise their stores of gold. This interest isn’t a novelty. While history books had people using gold formerly as money, Americans, during the Great Depression, hoarded gold for security.

Is gold investment right for ordinary individuals like us? Read on.


  1. Stable and steady wins. While paper money and stocks are preferred over bulky gold, gold is relatively stable over both. Using a horticultural simile, stocks are like expensive fruit trees. They bear nice, juicy fruit but only when pampered with constant ‘just right’ politics, absent of pesky little uprisings and a stable strong economy for them to grow. Stocks of gold on the other hand are a little like dandelions; able to flourish in all seasons but not exactly amounting to much value.
  2. Rising demand. As stated earlier, more countries are joining in the group looking to increase gold deposits. Gold seems to have a security effect on people. The fear of having a repeat of the Great Depression has made the market a gold bazaar.
  3. Rising prices. Gold prices spring up when the currency decreases its value. The deflation of the American dollar, as historians and economists understand, is bound to happen. One theory is that a currency suffers a breakdown every century, perhaps even losing most of its monetary worth in the process. In fact, gold’s worth has topped over the US dollar three times since 2001. This refers to gold in bullion (gold made into coins, ingots or bars) but rare gold coins have even better options. As the gold price increases, so will these coins, and will certainly do so long after the gold prices start to drop again.


  1. Seize the gold! In the rush of gold trading, US gold investors are wary of having the past repeating itself. It was during President Nixon’s time that gold bullion and ordinary coins were seized to pay the national debt. Only rare (read: old) gold coins remained untouched. A wiser alternative in gold trading, thus, is to buy rare gold coins.
  2. What? Is that all? Rare gold coins are indeed rare. Not all of them circulate in the market freely, simply because some of them are heirlooms, destined only to be circulated within family circles. Not only that, but also these coins are made even rarer by enthusiastic private coin collectors and by gold investors themselves.
  3. Too expensive. Not everyone can afford gold stocks or gold funds. The price of gold has increased significantly to about $937 US dollars per Troy ounce. Silver investment is probably more in line with the ordinary Joe’s budget—silver costs about $13.49, which means for the price of gold for a mere Troy ounce you would get 69 ounces of silver.

But if you still want to give gold a try, get a good capital from your funds and invest about a fourth of that capital to buy gold. Take caution, though because of such a demand for gold, the market may display no discretion in putting up items for sale. Without an expert background, you could fall prey to unscrupulous sellers selling doubtful gold items. Buy only bullion coins and bars or even rare gold coins duly recognized by legitimate companies. For more expert advice, you may secure the services of an experienced and trustworthy gold investor.

There’s no doubt that gold investment is now in bloom. Remember: start smart and buy smart.


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