When the economy is in strife many people choose to invest in gold. There is a very simple reason for this, it holds value. Precious metals are valued based on scarcity so even when an economy is in trouble they hold their value. Money on the other hand changes value quickly based on supply and demand. When economies are in trouble money becomes less valuable. If you are someone who has a lot of savings, the $100,000 you have in the bank today will still be $100,000 in six months’ time but you will be able to buy less with it. If you were to change that $100,000 into gold it would like to be worth $100,000 today and $100,000 + X in six months’ time. The chances of it dropping are very low. There are a few other reasons why people gold of course.
One reason people buy gold is that it is a sign of wealth. If you have expensive gold jewelry around your neck you are essentially signaling to others that you have wealth. The other reason that people wear gold is that they like it. That is the simplest and most common reason. Gold is a popular jewelry item because it compliments many styles and never goes out of fashion. It is also available in a wide range of options which means that everyone can enjoy a little gold.
If you are choosing to purchase gold there are some things you want to remember. If purchasing gold as an investment and at a large sum you are better off not going to your local shop and buying a gold necklace. While this is still a good investment they likely have a markup that you need to factor in. While that is ok at small quantities if buying at large quantities you may be giving away your benefit. Instead, you can purchase shares of a fund that replicates the gold price in the stock exchange. This is an easier approach as you will be able to buy and sell quickly when you want to without needing to find a buyer and you can buy whatever amount you want at the base price of gold. Of course, you will have to pay some fees to operate in the stock exchange meaning that it is again only worthwhile if buying an appropriate amount. The third option is to trade futures in the commodities market.
If you are purchasing gold for fashion or status then you need to ensure you are purchasing a high-quality standard. Gold standards are rated in terms of their karats. Basically, in every alloy of gold, there are 24 units called karats. If you can buy 24 karat gold you are purchasing 100% top quality gold. That is not always a good idea though. Pure gold is softer and therefore easily damaged. If you are purchasing jewelry that you plan on wearing every day 24 karat is not a good idea.
If you are purchasing a wedding ring we recommend only buying 12 to 14 karat gold as it will not wear so easily. If you are purchasing an earring or something like that then you can go as far as 18 karats as these are unlikely to come under as much wear and tear. 24 karat gold jewelry should only be purchased for rare occasions when you are certain that you will be mindful and look after it.
That is a quick guide to everything you need to know about buying gold. In short, buying gold is a great idea. Whether you want to purchase jewlery that will never go out of fashion or purchase the asset for its investment benefits, gold is as good as it gets.