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Gold Bullion Bars

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Gold Bullion Bars
Gold Bullion Bars
Old B/W picture of bullion vault with stacks of gold bars worth many millions of dollars.



Gold is considered to be one of the world's most valuable precious metals and is arguably the world's most famous commodity. It has deep rooted history that symbolizes wealth, power, fame, fortune and the higher nature of things. In early civilizations gold was considered the preserve of royalty and deities, even being seen by some cultures as a sacred gift from the Gods.

Gold may rightfully be considered to be the most reliable store of wealth in the history of the world. In the modern era gold bullion bars remain a very valuable investment commodity and in recent times, gold has been used as a hedge against the risk of currency devaluation. Gold is widely considered to be one of the best investments to safeguard your wealth and enjoys a very high level of investor confidence, as evidenced by the strong demand in recent years.

Larger size gold bullion bars are the financial commodity par excellence of governments and central banks. When very large movements of wealth are required, gold bullion is one of the principal forms used to transfer the wealth - and a nation's gold reserves typically make up a large percentage of its national Foreign-Exchange reserves. [1]

Smaller gold bullion bars make fine investment commodities for individual investors and in recent times an extended range of small gold bars may be obtained, with sizes down to 1 gram readily available.

Since the 1970's the price of gold per troy ounce has seen a number of peaks and dips influenced by supply and demand. In 1980 the value of gold hit a brief record high at $850/oz before falling back to around $300-$400,where it remained until 2004. Since then it has been on a meteoric rise until peaking at over $1700/oz in 2011, [2] with Newcrest Mining predicting the price to rise as high as $2500/oz. [3]

With the price of gold trending upwards in general there are considerable potential benefits to investing in gold bullion bars. Some of these benefits include:

• Gold is considered a "safe haven" in uncertain times. Unlike the stock market, which is often unpredictable and volatile, gold remains valuable.

• Gold is in constant demand. When demand increases, so does its value.

• In tough economic climates the price of gold tends to increase. More correctly, this might be seen as a fall in value of other items. For example as the value of the dollar decreases the value of gold goes up.

• You own 100% of your gold bullion. It is a tangible asset that you can hold in your hand, not ephemeral like the digits on a computer screen.

Investment gold bullion bars are available in a variety of weights and should be at least 99.5% pure gold. The most commonly traded weights are between 1 gram and 400 troy ounces. The 400 troy ounce gold bullion bar is called the London Good Delivery Bar. Most gold stored by central banks is in this well known form. [4]

When buying gold you should expect to pay a little more for the gold than it's actually worth. Gold dealers will included added costs to meet their profit margin. You may also pay delivery costs and you will certainly end up paying for storage on a yearly basis.

To ensure that gold is safely exchanged certain standards and requirements exist. These standards are set by a globally recognized system called the "good delivery" system which is set by The London Bullion Market Association, also known as LBMA.

To avoid scams, the purchase of gold bullion should ideally be done through a LBMA certified dealer. If a dealer is not certified you could demand that the seller pays for a full- melt assay. Gold should also be stored in an LBMA certified bank, or vault.

If you're looking to jump into the gold market, investors are generally encouraged to remain patient and wait for a gap, or a dip, in the market. If you buy gold when the prices are lower you will see a better return on investment when prices begin to rise.



References:

[1] http://en.wikipedia.org/wiki/Gold_reserve
[2] http://goldprice.org/gold-price-history.html http://www.lbma.org.uk/pages/index.cfm?page_id=46&title=current_statistics
[3] http://news.smh.com.au/breaking-news-business/newcrest-ceo-tips-us2500oz-gold-price-20120210- 1sfcb.html
[4] http://www.taxfreegold.co.uk/goldbarsinfo.html





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