Gold is a shiny yellow nugget that was discovered in riverbeds thousands of years ago. Many civilizations have preserved and used gold generations after generations as a precious metal in their treasury. For years, the natural beauty, brilliance and lustrous metal have attracted mankind. Goldsmiths find playing and working with it quite enjoyable because of some of its unique properties such as ductility, malleability, and resistance.
In ancient times, this lustrous metal was used in making coins, statues of gold, precious artifacts, crowns and also embroidery in garments. Gold holds a significant place in the world economy. People have invested in gold for ages as it gives them mental satisfaction. The yellow metal gives a feeling of owning wealth and acts as a protection against inflation. People of every age and income like to invest in gold to fulfill their future emergency needs.
The price of gold differs from place to place. For instance, the Gold price in Kolkata is different from the gold price in Dubai. The gold rate does not remain constant. There are many other facts about gold and different rules and regulations in regards to investing in them. Therefore, beginners must ask a few important questions before making any investment in gold. It is best advised to clear out all the long-term and short-term objectives before going ahead with gold investment. You must only proceed with investing in gold after having a thorough knowledge of the investment’s pros and cons.
Key Questions that you should ask
Let us have a look at some of the questions that every beginner must ask:
- Is it a good idea to invest in gold?
This is one diverse question as different people will have different answers. But in general, gold investment is a good alternative for people looking for financial protection against odd times. Gold offers liquidity as compared to bonds, stocks, or mutual funds. The value of gold is the same even when the value of the dollar goes down. This is because of its position in the market worldwide.
- When should you invest?
It is extremely important to understand the way gold prices fluctuate in the market. This will help you determine the right time to invest in gold. People also use this type of investment as an insurance policy that helps them protect themselves from the ups and downs of the financial world. Generally, it has been witnessed that as the world economy goes down, the gold price goes up and vice versa.
Beginners must spend quality time studying the economy. When you witness the economy is low then jump right in to invest in gold. Therefore, when you invest in gold during a temporary low then you are in an excellent position of making a big profit while selling it.
- What type of gold should you choose?
After clearing your mind on when to enter the gold market, the next important thing is to decide which one to buy. Buying gold is not an easy task. You must understand the various types of gold investment and determine their pros and cons. You can invest in gold in the following forms such as biscuits, coins, certificates, bards, and also gold mining stocks. Some people also opt for gold-based mutual funds, minimizing their risk factors.
There are many different types of trendy coins such as American Eagle Coins, Chinese Panda Coins, South African Krugerrands, and Canadian Maple Leaf Coins. The amount involved in gold investment is not a lot. Thus, buying and selling are not very complicated. Therefore, whenever you feel there is an urgent need for cash or a good opportunity in business, you can sell your gold coins in a hassle-free manner. Buying gold bars have more charm but require a bigger investment. They also require more storage space. This makes it difficult to store and sell when in need. Many people prefer buying gold bullion bars as their value remains high for a longer period.
- Where should you buy gold from?
There are several ways to buy gold bars and coins. You can either purchase them offline or online. Many different websites and apps sell gold online. However, there are certain risks when making a gold investment online. You must choose a website or app which is reliable and not fraudulent in any manner. People must do thorough research about the site before choosing to invest in it. If buying gold online intimidates you, then you can choose to buy it offline.
You can go to the physical market and find a well-reputed jeweler, bank or shopkeeper who deals in selling and buying gold. Many banks have a high processing fee which makes it expensive and difficult for small investors. Therefore, beginners must choose small jewelers or dealers who charge significantly lower. People must determine if the gold they are buying from the shopkeeper or jeweler is genuine or not.