THE ALLURE OF GOLD

THE ALLURE OF GOLD

Mankind’s fascination with gold is strange. Chemically, there is nothing interesting about gold but why did we choose it over the other 118 elements on the periodic table to be our currency and why do we regard it as the most beautiful when there are certain metals that stand out in comparison? It has been exactly 200 years ago that gold was discovered in Australia yet people are still interested in the yellow metal. They might not be mining it but they are definitely buying and selling gold especially now with prices being as high as they have been since the Corona outbreak. Who is buying gold and why?

The biggest consumer of gold is the Jewellery industry. This industry accounts for 51% or more of the gold demand. The rest is used to create gold bullion coins and bars that individuals, financial institutions and government invest in.

Gold is regarded as a “safe-haven” by investors. Paper money or fiat currencies have value because people say they do but that value is subject to a number of things like inflation, geopolitical tensions, wars and other things that could render it useless. If it loses its value, then there has to be something more valuable to facilitate trading. That one thing that the world can fall back on is gold.

So, it is wise to put some your money in this safe-haven commodity that thrives in times of economic hardships. There are various ways you can go about it.

Gold jewellery is actually valuable. In a time of need you can sell gold jewellery and get cash for it. You get the most out of gold jewellery if it is made from high quality like 18karats or 22k. It is virtually impossible to get 24 karat gold jewellery because at that level of purity, gold is too soft and not as durable as it should be.  There is a catch with gold jewellery though, the markup that jewellers put on the jewellery they sell make it a bad investment option. Once jewellery is bought and worn, it loses its extrinsic resale value. Expensive jewellery and vintage gold jewellery may be a little bit more valuable because they are usually bought or sold as collector’s items. Though once the gold price goes up, you might find that having some gold jewellery for rainy days is a good idea. It could be that family emergency when you need to sell gold jewellery to get some cash.

Serious investors will not even consider gold jewellery as an investment because in actual fact, you don’t go into a jewellery shop or accept a gift and immediately go: “wow, what a beautiful investment”. The best option for investing is in gold bullion coins or bars. The cost of turning gold into gold bullion is passed on to the customer. A gold bullion dealer will add his own markup to make a profit. There are different places where you can buy gold bullion. Some people prefer going directly to a mint like the Perth Mint However, there are hundreds of gold dealers who would like to buy your gold bullion whenever you are ready to sell. Just make sure that when you do decide to sell your bullion, you do some investigation on the gold dealers in your area and find one with a good reputation.

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