Investing in gold has been one of the safest forms of protecting wealth for thousands of years. After the recent wave of recession, fall in dollar and financial meltdown, gold has once again taken precedence over stocks and other commodities.
The value of gold hardly wavered even with the economic instability plaguing many countries. Investing in precious metals is a surefire way to stay financially safe and everybody is talking about profitable options like investing in gold bullion. But many of us are still unclear about what is bullion exactly. Here is a simplified explanation that will help you understand bullion and the benefits of investing in gold bullion.
What exactly is gold bullion?
Bullion is a form of investment that can help you protect and increase your wealth. Gold bullion is a similar form of investment where you can purchase physical gold as an insurance against volatile market conditions. This bullion is available in many forms and weights. Costs of the bullion depend on the weight, purity and any additional aesthetic or historical significance attached to it. Any gold that is struck by government or private mints and sold under standardized weights and fineness is considered to be bullion.
Types of gold bullion
To fully understand what is gold bullion, you should also learn the types of bullion that are available. Gold bullion is most commonly available in two forms – coins and bars. Gold bullion coins are also known as gold rounds because of their shape. It is important to remember that the price of the bullion will solely depend on the global gold price and not the local currency. Investment grade gold bullion should have at least 90% purity and they are available in fractions or multiples of troy ounces. Starting with one-twentieth of an ounce, gold bullion is minted as heavy as a kilogram.
Gold coins or rounds: Premium on gold coins varies on the rarity and the country of origin. Most of the standardized gold rounds offer an average fineness of 99% and above. Some of the most commonly purchased gold rounds include Krugerrand from South Africa, Australian Gold Nugget, American Gold Eagle, Swiss Vreneli, Canadian Maple Leaf and the Gold Panda from China. Gold rounds are available in sizes ranging from 1/20 of an ounce to 1 kilo.
Gold bars: Gold bars are larger forms of gold bullion that generally do not carry any aesthetic value. Molten gold is poured into molds to form large gold bars known as ingots. Requiring a minimum purity of 99.5%, gold is minted into large bars weighing an average of 400 ounces. The world’s largest gold bar weighs 250 kilos. Gold bars offer a stronger level of insurance as well as resale value compared to rounds or jewelry.
Reasons to invest in gold bullion
Initially, all governments attached their currency value to gold and printed money according to the gold reserves. But in the 1970s, many governments decided to discontinue this practice to cope with the inflation. This lead to a currency depreciation in many countries, eventually leading to the innumerable debts faced today. With the United States Dollar and the Euro facing many difficulties, most of the paper based investments like stocks and real estate are at risk.
Of all the investments options available today, gold bullion is one of the safest. Although the growth is slow and steady, it is also an assured profit. Unlike market investments that can rise or crash any time, gold prices are steadily increasing and pay off in long term investments. It is advisable to venture into various forms of investment to avoid putting all your eggs in one basket. It is estimated that 10% to 15% of you wealth should be invested in gold bullion to make up for any losses suffered through other risky options.
Where to buy gold bullion
Gold bullion should be bought from authorized and reputed companies only. As there are many fraudulent elements present in the real world as well as the internet, only companies approved by the World Gold Council or other credible boards should be approached. Buying gold bullion online is a very convenient option as you can invest from anywhere on the planet. Now that you know more about what is gold bullion, here is one dealer you can consider when you decide to invest in physical gold.
APMEX is one of the leading gold bullion sellers on the internet. With a diverse range of bullion available, APMEX also offers discounts on bulk purchases. It offers a variety of payment options like cashier’s checks, credit cards, money order and certified checks. With low premiums and quality service, APMEX is the preferred choice for thousands of satisfied customers.