Investing In Gold Mining Stocks
You can invest in companies mining for gold, rather than investing in gold itself. In theory, the shares of gold mining companies should go up as gold prices rise, as this increases the value of the companyâs gold inventory.
Thereâs also a chance that â with skilled management â miners are able to spend less to extract a greater amount of gold, although conversely, poor management can result in less gold being extracted at greater cost. As such, this is both a potential upside as well as a downside. A mining companyâs management is also an added risk factor, and investors need to be wary of mismanagement. Related risk factors include the companyâs gearing or debt, as well as environmental or legal policies that could impact its existing operations.
In an environment where gold prices are falling, a gold mining company can impose cutbacks on spending to maintain profitability something that a gold ETF or physical gold cannot do. Gold mining stocks may also deliver dividends, whereas physical gold and most gold ETFs do not. In particular, itâs important to understand that returns from mining stocks are dependent on the future returns of the company, not on gold prices. There are elements that are extrinsic to the price of gold, such as if the company also engages in other mining activities.
How To Buy Gold Bullion
Though commemorative coins often demand a higher premium, all gold products will have some premium on top of the live spot price. This is to cover the additional costs of storing, testing and minting. It is therefore important to buy gold from the most competitive and trustworthy gold dealers, in order to ensure that you gain the maximum possible return on your investment.
All gold products on our website are automatically updated in line with the gold price, meaning you can be sure that you are always paying the best possible purchase price. Have a look at our range of gold coins or gold bars, if you want to find out more about our range of investment opportunities.
Gold Market Outlook For 2021
Low-interest rates and financial uncertainty following the Covid-19 market crash caused gold to enter a bull market, rising from just above £36 a gram to over £45 last year. If financial uncertainty continues, most likely propelled by the weakening in economic growth following the pandemic, we could see gold hit new highs in 2021.
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Gold Price Forecast For 2022 And Beyond: A Buy Hold Or Sell
Gold price forecast for 2022 and beyond: A buy, hold or sell? Photo: Shutterstock
The gold price retreated from a mid-November spike to end the month slightly lower. It has picked up after a further drop at the start of December.
A stronger US dollar offset higher inflation expectations and stable interest rates, preventing the precious metal from holding onto the gains. The market continues to observe the impact of the Covid-19 pandemic on the global economy and gold demand, as well as central bank policy on tapering monetary stimulus and raising interest rates.
Whats the outlook for the gold price in 2022? Should you consider taking a long or short position?
In this article, we look at some analysts latest gold price projections.
Austrian Philharmonic Gold Coin
The Vienna or Austrian Philharmonic, first released in 1989, filled the hole that the sanctions imposed on South Africa, and therefore the Kruggerand, left in the gold market. A favorite of investors and music-lovers alike, the Philharmonic was the first European one-ounce gold investment coin on the exchange. Minted by the Münze Österreich AG, the Austrian Mint, it was the best-selling gold coin in Europe by 1990.
All the Philharmonic coins display the same design, with only the mintage year changing. These coins boast 99.99 gold and come in one-tenth-, quarter-, half-, and one-ounce weights with the addition of a 1/25-ounce coin. There are also two larger weightsthe 20-ounce gold coin and a 1,000-ounce coin called “Big Phil.”
Big Phil was created to commemorate the 15th anniversary of the Vienna Philharmonic coin. It contained 31.103 kg of pure gold and had a nominal value of 100,000 or about $111,216.50 U.S. dollars. Only 15 of these coins were minted.
The front of the coin depicts the world-famous pipe organ of the Vienna Musikverein’s Golden Hall, where some of the best musicians in the world perform. The Musikverein is the main stage for the Vienna Mozart Orchestra and is the permanent seat of the world-renowned Vienna Philharmonic.
The reverse side of the coin shows a plethora of instruments, featuring the bassoon, Vienna horn, harp, and four violins, all surrounding a cello.
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Gold Price Forecast For 2022 And Beyond
Forecasts for the gold price outlook next year from different analysts vary, based on how they expect the market to respond to inflation and central bank policy.
Technical analysis from brokerage firm Zaner on 8 December noted that key points on the upside in gold are the 200-day moving average at $1,796.25 and then again at $1,800.
But, even though we leave the bull camp with a minor edge, the precious metals markets lack a definitive bullish fundamental storyline and lack upside momentum. Furthermore, recent gains have been forged on extremely low trading volume and almost no change in open interest, the companys analysts wrote in a note to clients.
Analysts at Australian bank ANZ expect gold to find support in the first half of next year but undergo downward pressure later in the year when the Fed is expected to raise interest rates. They wrote in their latest commodity report: As ultra-loose monetary policy nears an end and stimulus starts to shrink, support for the precious metals sector likely to wane in 2022. Despite more than a year of US Federal Reserve discussions around tapering, higher inflation and negative real interest rates have protected the downside of gold prices.
They added: In fact, with both an accelerated taper and more than three rate hikes already priced in for 2022, the balance of risks for gold positioning remains to the upside, as geopolitical risks and virus risk could catalyse a positioning reshuffling.
Pricing And Quality Markings
Gold prices are determined mainly by purity. But how can you know what the purity of the meal is? Here are some tips:
- Unless you have a readily available lab or have powers of microscopic vision, look for the hallmark.
These are unique markings that are mostly found on inconspicuous parts of the item .
Some markings will indicate the karatage, which indicates the gold content, while others would put the percentage of purity. You may refer to the table below for the most common purity markings used around the world:
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Karatage |
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Where Should I Buy Gold
To get the best deal when purchasing physical gold, find a reputable coin shop or online gold dealer. They will offer their products at a fair price with a consumer-friendly return policy. Reputable coin shops will also tap their industry resources to fill your want list if they dont have the items youre looking for at the moment.
No matter which form of gold you choose, buying gold bullion helps your asset portfolio weather downturns in equities, and counteract inflation. Gold is also the only major asset with both high liquidity and no counterparty risk.
Shop for gold online at Gainesville Coins by browsing the gold products below:
Weakness Of The Us Dollar
Although the U.S. dollar is one of the world’s most important reserve currencies, when the value of the dollar falls against other currencies as it did between 1998 and 2008, this often prompts people to flock to the security of gold, which raises gold prices . The price of gold nearly tripled between 1998 and 2008, reaching the $1,000-an-ounce milestone in early 2008 and nearly doubling between 2008 and 2012, hitting above the $2,000 mark. The decline in the U.S. dollar occurred for a number of reasons, including the country’s large budget and trade deficits and a large increase in the money supply.
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Current And Historical Prices Of Gold
Investors should start by looking at the spot price of gold, which is what it can be bought and sold for at that moment. The spot price of gold is quoted per one gold ounce, gram, or kilo. For example, by the end of day on Monday, June 7, 2021, the spot price of gold was $1,903.00 per ounce, $61.18 per gram, and $61,181.45 per kilo.
If you look at historical gold prices, you’ll find that the price of gold shot up dramatically in the 2000s. In 2008, the price of gold varied from around $720 an ounce to over $1,000 an ounce. As the economy sank further into the recession, gold prices soared to around $1,895 in 2011 due to investor sentiment and demand. By April 2020, gold prices declined slightly from where they were almost a decade earlier but continued to perform well in the midst of an economic downturn.
Something similar happened in the late 1970s. After the price increase in the ’70s, gold spent the next 20 years declining in value before going back up around 2000. During the pandemic crisis, demand for gold surged, and the price of gold increased. Investors couldn’t be certain at that time whether the increase would continue or not because it is equally possible that the trend could continue or the price would once again languish for a considerable length of time. While languishing, any gold investment would not produce any interest or dividends.
Bullion Vs Collector Coins
Investors need to distinguish between bullion coins whose values generally fluctuate according to the current price of gold, silver or platinum, and “rare coins” that can carry a significant collector premium based on historical supply and current market demand.
Some U.S. gold and silver coins may be readily available in circulated condition for a modest premium over their bullion content, but those same coins in superb condition may have a significantly higher value. The numismatic premium can exceed thousands of dollars above the coin’s melt value. The market for accurately graded, high-quality rare coins has always been strong.
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Oz Gold Buffalo Coin United States Mint
One of the newer coins on our list, the United States Mint started producing this coin in 2006 to compete with the almighty Gold Maple Leaf Coin. Its also a genuine alternative to the 1 oz American Gold Eagle coin. This gold coin contains .9999 fine gold , which is slightly more than the American Gold Eagle .
Its stunning design is highly-memorable among investors and collectorsthe 1 oz Gold Buffalo coin is legal tender with a value of 50 US dollars.
Factors To Consider When Buying Physical Gold
If you decide to buy physical gold, youll want to keep a few things in mind:
- Storage: Physical gold requires a secure storage location. While you can certainly keep your gold at home, many investors prefer a custodian. Make sure you research secure options for storing your gold before you buy it, and keep in mind that safe storage adds costs to your gold investment.
- Insurance: If you decide to store your gold at home, you should insure your gold to protect yourself against theft or natural disaster. This can add to the cost of your homeowners or renters insurance. And even if you dont keep your gold at home, youll want to check in on your storage providers insurance policy to determine how its protecting your investment.
- Manufacturer: Because youre making an investment, youll want to make sure youre buying from reputable sources that will help your purchases value grow over time. When buying gold, look for respected producers like Credit Suisse, the Perth Mint and the Royal Canadian Mint.
- Purity: The gold content in the coin, bar or piece of jewelry has a big impact on its value and worth as an investment tool. Ensure any gold you purchase as an investment has the purity level to help it stand the test of time. That means youre probably targeting gold items that are at least 91%, if not 99%, pure.
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Best Month To Buy Gold
Asking which month is almost the same as asking which day. Our answer is essentially the same here.
Consider the macro and the current state of the economy in the USA. If you have been paying attention, then it’s easy to see that trillions of dollars are being created out of thin air.
Those trillions are being used to artificially inflate stock markets and being sent out to citizens who are spending that money in the real economy.
But no more goods and services are being created. Most experts tell you that scenarios like these lead to inflation, and gold is an excellent hedge against inflation.
The storm is brewing, and the ship is leaving the dock soon. The problem is no one knows when the ship is going exactly. There is an invisible countdown, and so if you are considering gold, it’s best to just get on the boat, regardless if it’s leaving the dock in one week, one month, or one year.
Only Invest Money You Dont Need For Five Years
We dont know when the system is going to crash. If you believe the people who are saying that the system is going to collapse in the next six months, youll make bad financial decisions. Dont believe them. Dont speculate.
Only invest money that you really dont need for at least the next five years. Anything can happen in five years. And in 2020, weve learned that anything can happen in five short months. While it is very likely that the price of gold will be higher in five years than it is today, its harder to know what will happen in the short term.
If you want a good return, youll need to wait at least five years. If the system crashes before then, you will be fine, but dont use money that you will need in three, six, or even nine months time because we dont know where the price is going in the short term.
An ounce of gold is always an ounce of gold, but the price of the fiat is what fluctuates. No matter what, there is a very high probability that, after five years, you will be really happy with your investment.
There is no telling what will happen to gold prices in the near future, but you can safely assume that your investment will have grown in five years time.
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What Is The Price Of Gold Today
As of September 28, 2021, the price of gold is $1,734.50 per ounce.
In the U.S. the COMEX is the primary exchange for gold futures, and therefore, the place where the most-widely quoted gold prices are set. The London Bullion Market Association also provides a twice-daily “fix” price used as a benchmark for large market participants.
In general, look for whats known as the spot price, thats the price at which buyers and sellers are willing to trade gold today, as opposed to some future date
Gold Mining Companies & Stocks
Investing in gold mining companies is an interesting way to combine gold investments with traditional stocks. By purchasing shares in a company that works with gold, investors can access the profits of gold without buying or selling it themselves. This form of investing can also provide lower risks, as there are other business factors at play that can help protect investors from flat or declining gold prices. That being said, investors conduct significant research when searching for the right company to invest in. There are risks associated with the mining industry that can interfere with overall profits or even bring up ethical concerns. Always do your research when selecting a gold mining company to invest in.
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Only Physical Gold And Silver
Anyone investigating gold and silver needs to understand that its basic function is as money. Gold was used as money for 5000 years. It was only in 1971 when Nixon went off the gold standard that the whole world began to transition into the fiat system using paper money that is not backed by gold. Before that, all paper money was backed up by gold.
Now that the worlds currencies are not backed by government-held gold, the paper market for gold has grown immensely as people seek to buy money that is backed by a physical commodity. This is especially easy to see if you look at the commodity exchange market COMEX where they sometimes have over 500 paper claims for every ounce of physical gold regularly available at the COMEX.
The leverage in the system is huge because so many people believe that they own gold on paper. However, if they want to claim that money, they will quickly find out that there is not enough physical gold available. Thats why, when youre buying gold as an insurance against the crash of the monetary system, make sure that you have it physically.
Dont buy it on paper.
Buy it physically because there are even certain paper products that do not guarantee that you actually own gold. If you purchase the biggest products from Wall Street, such as an exchange-traded fund or a GLD or even an SLD, you can actually go through the details in their terms and conditions and see that they dont even tell you if they actually have the physical gold.
