Some argue that gold is a barbaric relic that no longer holds the monetary qualities of the past. In a modern economic environment, paper currency is the money of choice. They contend that gold’s only benefit is the fact that it is a material that is used in jewelry.

On the other end of the spectrum are those that assert gold is an asset with various intrinsic qualities that make it unique and necessary for investors to hold in their portfolios.

In general, investors looking to invest in gold directly have three choices: they can purchase the physical asset, they can purchase shares of a mutual or exchange-traded fund (ETF) that replicates the price of gold, or they can trade futures and options in the commodities market.

• Is Investing in Gold a Good Idea?
• How much Gold is a Good Investment?
• How do I Start Investing in Gold?
• Is Investing in Gold a Bad Idea?
• Why you Should not buy Gold?
• What is the Best Time to buy Gold?
• What will Gold be Worth in 10 years?
• Is it better to buy Gold or Gold Stocks?
• How Can I Invest in Gold in UAE?
• How Can I Invest in Gold in NZ?
• How to Invest in Gold For Beginners
• How to Invest in Gold Online
• Investing in Gold Stock
• Which Country Has Cheapest Gold?
• Why is Gold so Cheap in Dubai?
• How Much Does a Gold Bar Cost Today?
• What is The Price of Gold in NZ?
• Which Country Gold is Pure?
• Which Country Gold is Best?
• Do Banks Sell Gold Bars?
• Can I Buy a Gold Bar?
• How Much Gold Can a Person Own?
• Can The US Government Take Your Gold?

Is Investing in Gold a Good Idea?

Gold is respected throughout the world for its value and rich history, which has been interwoven into cultures for thousands of years. Coins containing gold appeared around 800 B.C., and the first pure gold coins were struck during the rein of King Croesus of Lydia about 300 years later.

Read Also: Earn Money Easy As A Virtual Gold Farmer

Throughout the centuries, people have continued to hold gold for various reasons. Societies, and now economies, have placed value on gold, thus perpetuating its worth. It is the metal we fall back on when other forms of currency don’t work, which means it always has some value as insurance against tough times. Below are eight practical reasons to think about owning some gold today.

1. A History of Holding Its Value

Unlike paper currency, coins or other assets, gold has maintained its value throughout the ages. People see gold as a way to pass on and preserve their wealth from one generation to the next. Since ancient times, people have valued the unique properties of the precious metal.

Gold doesn’t corrode and can be melted over a common flame, making it easy to work with and stamp as a coin. Moreover, gold has a unique and beautiful color, unlike other elements. The atoms in gold are heavier and the electrons move faster, creating absorption of some light; a process which took Einstein’s theory of relativity to figure out. 

2. Weakness of the U.S. 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 around the $1800-$1900 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.

3. Inflation Hedge

Gold has historically been an excellent hedge against inflation because its price tends to rise when the cost of living increases. Over the past 50 years investors have seen gold prices soar and the stock market plunge during high-inflation years.

This is because when fiat currency loses its purchasing power to inflation, gold tends to be priced in those currency units and thus tends to rise along with everything else. Moreover, gold is seen as a good store of value so people may be encouraged to buy gold when they believe that their local currency is losing value.

4. Deflation Protection

Deflation is defined as a period in which prices decrease, when business activity slows and the economy is burdened by excessive debt, which has not been seen globally since the Great Depression of the 1930s (although a small degree of deflation occurred following the 2008 financial crisis in some parts of the world)..

During the Depression, the relative purchasing power of gold soared while other prices dropped sharply. This is because people chose to hoard cash, and the safest place to hold cash was in gold and gold coin at the time.

5. Geopolitical Uncertainty

Gold retains its value not only in times of financial uncertainty but in times of geopolitical uncertainty. It is often called the “crisis commodity,” because people flee to its relative safety when world tensions rise; during such times, it often outperforms other investments. For example, gold prices experienced some major price movements this year in response to the crisis occurring in the European Union. Its price often rises the most when confidence in governments is low.

6. Supply Constraints

Much of the supply of gold in the market since the 1990s has come from sales of gold bullion from the vaults of global central banks. This selling by global central banks slowed greatly in 2008. At the same time, production of new gold from mines had been declining since 2000.

According to BullionVault.com, annual gold-mining output fell from 2,573 metric tons in 2000 to 2,444 metric tons in 2007 (however, according to Goldsheetlinks.com, gold saw a rebound in production with output hitting nearly 2,700 metric tons in 2011.) It can take from five to 10 years to bring a new mine into production. As a general rule, reduction in the supply of gold increases gold prices.

7. Increasing Demand

In previous years, increased wealth of emerging market economies boosted demand for gold. In many of these countries, gold is intertwined into the culture. India is one of the largest gold-consuming nations in the world; it has many uses there, including jewelry.

As such, the Indian wedding season in October is traditionally the time of the year that sees the highest global demand for gold (though it has taken a tumble in 2012.) In China, where gold bars are a traditional form of saving, the demand for gold has been steadfast.

Demand for gold has also grown among investors. Many are beginning to see commodities, particularly gold, as an investment class into which funds should be allocated. In fact, SPDR Gold Trust, became one of the largest ETFs in the U.S., as well as one of the world’s largest holders of gold bullion in 2008, only four years after its inception.

8. Portfolio Diversification

The key to diversification is finding investments that are not closely correlated to one another; gold has historically had a negative correlation to stocks and other financial instruments. Recent history bears this out:

• The 1970s was great for gold, but terrible for stocks.
• The 1980s and 1990s were wonderful for stocks, but horrible for gold.
• 2008 saw stocks drop substantially as consumers migrated to gold.

Properly diversified investors combine gold with stocks and bonds in a portfolio to reduce the overall volatility and risk.

How much Gold is a Good Investment?

Whenever gold seems to do well, there’s a rush to buy, hoping that it will continue to rise. Fears about the stability of the U.S. dollar also tend to push gold prices up.

However, before you decide that you need to buy gold immediately, it’s a good idea to take a step back. Gold is an asset like any other—it can rise or fall due to sentiment.

Your portfolio should be structured in a way that helps you reach your long-term goals. Gold might have a place. However, many experts warn that you should be wary of how much gold to include in your portfolio.

One rule of thumb is to limit gold to no more than 5 to 10 percent of your portfolio. Depending on your situation and your risk tolerance, you might be more comfortable with a bigger or smaller share of gold in your portfolio.

How do I Start Investing in Gold?

Average investors, for example, might buy gold coins, while sophisticated investors implement strategies using options on gold futures.

1. Buying Gold Bullion

Compared to other commodities, gold is more accessible to the average investor, because an individual can easily purchase gold bullion (the actual yellow metal, in coin or bar form), from a precious metals broker, like bullion max, or in other cases, from a bank. 

Bullion bars are available in sizes ranging from a quarter-ounce wafer to a 400-ounce brick, but coins are typically the choice for new investors. Not to be confused with vintage numismatic coins, these are new issues priced on their gold content, plus a 1% to 5% premium.

For maximum liquidity, most buyers stick with the most widely circulated gold coins, including the South African Krugerrand, the American Eagle, and the Canadian Maple Leaf. Whatever you prefer, be sure you are buying from a reputable dealer, either in person or through the internet. Gold coins obviously require safekeeping—either a home safe or a bank safe deposit box. Be sure to insure them, too.

Gold jewelry also allows the investor in gold to also experience the enjoyment of wearing it. Gold is often combined with other precious gems and metals to enhance the overall value and appearance of the jewelry. Pieces are often passed down to the next generation as family heirlooms, adding sentimental value beyond that of the piece itself.

Jewelry is not typically the best option if it’s strictly an investment, because the retail price will usually far exceed the meltdown value. This is due to the workmanship involved and the retail markup. Always determine the purity of the gold before buying jewelry, so that you don’t pay for 18 karats when you are only getting a 14-karat piece.

Jewelry is covered by most homeowner insurance policies, which is an advantage should it be lost or stolen.

2. Buying Gold Funds

Although it’s more feasible than, say, a barrel of oil or a crate of soybeans, owning physical gold has its hassles: transaction fees, the cost of storage, and insurance. Investors interested in a more liquid and low-cost entry into the gold market might instead consider mutual funds and exchange-traded funds that replicate the movements of the commodity.

SPDR Gold Shares (GLD), for example, is one of the oldest ETFs of its kind, initiated in 2004. Shares trade on the New York Stock Exchange and can be bought or sold at any time throughout the trading day, just like stock. Each share of the ETF represents one-tenth of an ounce of gold.

For example, if gold is trading near $1,300 an ounce, the gold ETF will trade for approximately $130 per share. GLD invests solely in bullion, giving investors direct exposure to the metal’s price moves. Other funds invest both in bullion and in shares of publicly traded companies in the business of gold mining, refining, or production.

Generally, gold stocks rise and fall faster than the price of gold itself. Individual companies are also subject to problems unrelated to bullion prices—such as political factors or environmental concerns. So investing in an ETF that owns gold stocks is a higher-risk way to play, but it does offer appreciation potential—which investing in bullion does not.

3. Buying Gold Futures Options

More experienced investors who don’t want to risk a lot of capital might consider options on gold futures or options on a gold ETF. These contracts represent the right—but not the obligation—to buy or sell an asset (gold in this case) at a specific price for a certain amount of time.

Options can be used whether you think the price of gold is going up or going down. If you guess wrong, the maximum risk associated with buying options is the premium you paid to enter the contract.

Available in the U.S. through the Chicago Mercantile Exchange, put and call options on gold futures can be bought and sold through a futures broker. Options on SPDR Gold Shares ETF are also available to investors and can be traded in a standard brokerage account that has received approval for options trading.

Meanwhile, some traders buy and sell gold futures contracts—which trade on CME under the symbol GC—to speculate on short-term moves higher or lower in the yellow metal.

4. Buying Gold Mining Stocks

If you can’t get your hands directly on any gold, you can always look to gold mining stocks. Keep in mind, however, that gold stocks don’t necessarily move in concert with bullion prices, because mining companies succeed or fail based on their individual operating performance and how they deploy their capital and generate profits. You don’t have the security of physical possession of the metal if the companies you buy are unsuccessful.

Is Investing in Gold a Bad Idea?

Gold’s value, for the most part, is based on fear. Investors buy it when they think currencies are shaky or whole economies are wobbly. But ever since the disastrous crash of 2008 — with Europe and the U.S. struggling to recover — gold has been a poor investment.

In a low-inflation environment, gold and other metals are not going to help you. The cost of money and demand for credit is low, keeping interest rates in check. For most of us concerned about the cost of living, these are pretty good times.

Yet gold bugs peddle uncertainty. They assure you that you can make money because times are bad and are getting worse. Although you can always make an argument for that, the opposite is true. The U.S. and Europe are still recovering. Credit is tight, but not expensive. Corporations are still making profits.

This fear over the economic future fuels numerous gold scams. Dealers may be pushing coins, bullion or stocks in mining companies.

Brokers love these vehicles because they make money on commissions. The more products they sell, the richer they become, particularly when investor sentiment is skittish. They charge more for gold-based products than the actual price of the metal.

If you choose to invest in gold, be smart about it. Here are some buying guidelines from the Federal Trade Commission:

— “If you are buying bullion coins or collectible coins, ask for the coin’s `melt value’ – the basic intrinsic bullion value of a coin if it were melted and sold. The melt value for virtually all bullion coins and collectible coins is widely available.

— Get an independent appraisal of the specific gold product you’re considering. The seller’s appraisal might be inflated.

— Consider additional costs. You may need to buy insurance, a safe deposit box, or rent offsite storage to safeguard bullion. These costs will cut into the investment potential of bullion.

— Some sellers deliver bullion or bars to a secured facility rather than to a consumer. When you buy metals without taking delivery, take extra precautions to ensure that the metal exists, is of the quality described, and is properly insured.

— Walk away from sales pitches that minimize risk or sales representatives who claim that risk disclosures are mere formalities. Reputable sales reps are upfront about the risk of particular investments. Always get a receipt for your transaction.

— Refuse to “act now.” Any sales pitch that urges you to buy immediately is a signal to walk away and hold on to your money.”

Why you Should not buy Gold?

1. You Don’t Know How To Value It!

Is gold worth $500 or $3000 an ounce? Truth is, no one really knows. Most investments generate an income stream that can be measured as a percentage of the cost. That percentage can be compared to other investments like Treasury bonds or considered as compensation for deferring the use of your principal.

People intuitively can understand spending $100 today versus waiting a year in order to enjoy $110. Unfortunately, gold produces no earnings or income.

Gold has no intrinsic value. You can’t eat, drink it, smoke it, or drive it. Its value is strictly based on perceived value by another – and that has proven very volatile over the years.

Oh sure, there have been attempts to put a value on gold. Some argue that an ounce is always equal to the price of a quality man’s suit. Some point to the average ratio of the price of gold to the level of the S&P 500 index as being 1.74 since 1980, therefore justifying a price of nearly $2,000.

Others target a price of nearly $2,287 by taking the all time high for the metal in 1980, $850 an ounce, and adjusting it for ensuing inflation. The math is clear, but whether the $850 price back then made any sense is another matter, as it lasted just briefly among panicky concerns about inflation, energy prices, and a Soviet invasion of Afghanistan.

On the other hand, some support for the price does come from the cost of production. That reportedly averages $556 per ounce. If gold were to decline toward that price, production would diminish, helping prop prices up but, if gold keeps climbing, that will spur production as previously unprofitable mines become profitable. The added production would tend to brake further price rises.

2. All The Gold That’s Ever Been Mined Sits as Inventory For Potential Resale

There is little in the way of actual use for gold; it does not get used up. While jewelry has historically been a use, it has been declining in importance since the 1990s as economies have soured and the price of gold has soared. In any event, much of the jewelry around the world is considered an economic asset, and could be traded or melted down at the right price and circumstances.

The bottom line is that nearly all the gold that’s been mined since the beginning of time remains and is potentially available for resale. That inventory is always increasing. As they say, gold is a commodity that’s extracted from one big hole in the ground, called a mine, and then redeposited in another big hole in the ground, called a vault. That supply overhang makes investing in gold quite risky.

The 1970s saw a huge run up in gold’s price. But, during the following two decades, it lost 80% of its value on an inflation adjusted basis. That potential still exists today.

3. You Don’t Know What Economic Conditions Lie Ahead and How They Will Affect Gold Demand

Gold is seen as a hedge against inflation and a weak U.S. dollar. The problem is, forecasting inflation is very tricky. Those who complain loudest about inflation argue that the Government’s fiscal policy has been too profligate and monetary policy too easy. For instance, the Federal Reserve recently suggested it would engage in further monetary easing should economic conditions deteriorate.

Betting on what policy makers will actually do is very difficult. They don’t want to see inflation or gold prices materially higher. The inevitable policy change to higher interest rates and higher taxes will dampen inflation potential and could cripple gold.

Next time you’re tempted to bet the farm on gold based on your economic forecast, heed Warren Buffett’s admonition that God put economists on the earth to make astrologers look respectable! Some of the same economists warning so vociferously today gave us no warning three years ago.

The bottom line is we know gold is trading at sharply elevated prices today. What we can’t be sure of is whether the dire economic forecasts driving that rise will materialize.

4. Even if it Makes Sense in the Long Term, Gold is Overbought Today

With the price of gold having tripled since 2004 and indeed having nearly doubled just since 2008, gold is on an unsustainable “J” curve. No amount of inflation or jewelry demand can justify its continuing up indefinitely.

The rise in gold is due to speculative demand, and can reverse itself quite quickly. The charts are reminiscent of the Internet bubble of the 1990s. Sure, gold may rise slowly to reflect inflation and gradual increases in extraction costs. However, the recent speculative demand is not sustainable, and carries grave risks.

Sentiment seems overdone, too. Television now regularly carries commercials offering gold. Numerous scams are being reported as unsophisticated investors rush to get involved. Gold is being touted as the cure all for whatever ails the economy. History proves over and over that when sentiment surges in a certain direction, a correction is often at hand.

5. Gold is Taxed Unfavorably

One of the attractions of stock investing [in the U.S.] is that long term Federal capital gains rates are capped at 15%. Unfortunately, gold does not receive similar favorable treatment. Gold is treated as a collectible, subject to a higher maximum tax rate of 28%. Investors do not escape the higher rate when they buy gold via gold bullion holding exchange-traded funds (ETFs).

If you’re determined to invest in gold but wish to avoid those higher rates, consider gold mining company stocks. While they entail a panoply of risks that go beyond the yellow metal itself, at least your tax bill on long term gains will be less.

Another strategy is to invest using your IRA. Although collectibles like actual gold or gold coins are not permitted in IRAs, gold owning ETFs are considered acceptable. Gains in an IRA are not subject to tax until withdrawn.

6. Gold Produces No Income

Gold, like cash, pays no dividends or interest. That alone should make it suspect for those seeking income. What’s worse is that there is an opportunity cost for holding gold, namely, the foregone interest you would otherwise have generated from an alternative investment.

To make matters worse, proper safekeeping involves storage costs including insurance. Those costs are not avoided by buying gold via an ETF as the ETFs assess an ongoing fee, generally in the range of 0.4% annually, for those and other expenses.

What is the Best Time to buy Gold?

There are a couple conclusions we can draw from the historical record. When buying gold and silver…

1. Early January, March or April, and late June is when gold and silver tend to be at their lowest prices of the year and are thus good times to buy. The data show that you want to be fully positioned before August.
2. You are likely to get a better price this year than next year. Whatever amount you want for your long-term holdings, buy it this year, not next year.

In the big picture, however, it’s less about snagging the exact bottom and more about how many ounces you own. Remember, gold is inversely correlated to other investments, including equities, so you want to have a meaningful amount of bullion before a stock market selloff takes place. If you don’t, the price of gold could very well leave you behind, forcing you to pay not just a higher price but a higher premium.

What will Gold be Worth in 10 years?

Because gold is such a mature and well-established market, and a rather settled and slow-moving one, there are a lot of predictions that are made into the future for the precious metal. Of course, there are factors that need to be considered for long term gold price forecasts that are often unpredictable, such as the mining supply, or geopolitical tensions.

But, there are also a lot of factors that help drive gold, and these have been mostly driving the price up slowly over the years, such as currency inflation and the need for safe-haven assets.

Gold Price Predictions For Next 5 years (Until 2025)

As has been explained above, the movement of gold is primarily upwards, but at a slow pace. That being said, the price of gold could rocket at this important juncture, and have lasting moves for the gold price predictions for next 5 years

Gold is now pulling back from its highs, but it could be forming a cup and handle pattern that could send prices soaring much higher. For example, Rich Dad, Poor Dad Author Richard Kiyosaki sees gold reaching $3,000, and various banks have now adjusted their targets above the previous $2,000 level.

Gold Price Prediction For Next 10 Years (Until 2030)

Looking even further ahead in the gold forecast, even the gold price prediction chart for the 10 years seems promising for the asset as the general gold prediction remains that its value will only go up especially considering there is a financial crisis looming and we can see what happened in the 10 years following 2008. 

Dohmen Capital Research sees a good recent example is the 2008 global crisis. Gold plunged 31 percent as credit tightened, the crisis accelerated and a rush to cash from all assets commenced. That was painful for bulls who didn’t know that a credit crisis causes all assets to plunge. But it also created a great buying opportunity at the bottom.

This crisis, as is happening already in 2020, caused the central banks to step up their money printing, which then makes gold a great investment. That bull market in gold went from late 2008 to late 2011.

But, there was a dip in interest after that, but even still, the long position is still very promising as a look at a 20-year chart below which shows the “non-commercial” short positions. These are the speculators who are usually wrong at the important turns.

The fact that speculators, i.e. non-commercials, had record short positions in 2018 confirms that a lot of short covering may occur, to be followed by actual buying. That would mean greater demand.

Is it better to buy Gold or Gold Stocks?

Many investors seek to purchase gold, especially in times of market uncertainty. But they often wonder which is better: investing in physical gold vs. gold stocks.

There is a major difference between investing in physical gold vs. gold stocks. Generally, when you are investing in gold, you are investing in bullion, and you’re directly purchasing the precious metal itself in the form of gold bars or coins. On the other hand, when you invest in gold stocks, you’re purchasing a stock like any other.

Generally, gold stocks can be related to the price of physical gold, but gold stocks are also susceptible to other types of risk, as well as the broader stock market.

So which of these methods of investing in gold is better? Well, that really depends on your particular circumstances – for example, your investment goals and your risk profile.

Let’s take a look at each of the ways you can invest in our favorite shiny yellow metal.

Three Ways to Invest in Gold Stocks

There are several different ways that you can invest in gold stocks (vs. physical gold). The following are your main options:

• Mining stocks
• ETFs
• Gold certificates.

1. Gold Mining Stocks

A gold mining stock represents a share of a company that mines for gold. It’s a liquid investment that you can purchase on a stock exchange just like any other stock investment.

2. Gold ETFs

A gold exchange-traded fund (ETF) is a fund that trades on a stock exchange like any other ETF. However, a gold ETF is specifically invested in a variety of gold mining companies. Like other ETFs, it helps you gain instant diversification by spreading out your risk across multiple companies.

3. Gold Certificates

As the dollar is no longer backed by gold, this method of investing in gold is no longer as popular as it used to be. Not technically a stock, a gold certificate is an official paper that indicates you own gold that is not in your official possession. However, if the certifying company goes belly-up, your investment can become worthless.

Two Ways to Invest in Physical Gold

There are two different ways you can invest in physical gold (vs. paper gold):

1. Gold bars
2. Gold coins.

1. Gold Bars

There are two different types of gold bars: cast gold bars and minted gold bars. Cast gold bars are made in a mold, while minted gold bars are made by pouring molten gold onto a long strip of metals, which is then cut into bars.

There is a bit of a textural and aesthetic difference between cast and minted gold bars. Cast gold bars tend to be rougher and less perfect, while minted gold bars tend to be shiny, smooth and perfect-looking – and more in keeping with how you might imagine a gold bar to look.

The aesthetic appearance of the minted bars, along with the fact that they are often kept in their original packaging, helps them maintain both their appearance and their value over time.

2. Gold Coins

Another way to invest in physical gold rather than gold stocks is to invest in gold coins. Now, you might be imagining the kind of coins you’d find in a pirate’s chest in an adventure film. But gold coins are very real.

Gold coins are created in various mints around the world and are generally even usable as currency. That’s because gold coins often have a face value. However, the value of the physical gold composing the coin is often worth significantly more than face value, which makes the face value kind of irrelevant.

In addition to their nature as a store of value, gold coins can also have additional value as collectibles. This is especially true of gold coins minted in the United States prior to 1933 (which was the year gold coinage ceased its circulation in the U.S.).

There is a significant difference between investing in physical gold vs. gold stocks. Gold stocks are more liquid and are easily tradable like any stocks, while paper gold is more susceptible to market risk than physical gold. As a result, physical gold can act as a hedge against the stock market and do well in a down market.

How Can I Invest in Gold in UAE?

It is a commonly known fact that the UAE is the hub for trading gold across the world. It is home to a variety of gold bullion dealers, refineries, bullion investment organizations, and trading of jewelry and gold coins.

Instead of asking where to purchase gold in the UAE, you should ask about the amount you can invest in it because of the huge range of options available for purchasing gold across the Emirates.

For instance, you can make an investment of up to AED 15,000. In such a situation, it would be ideal for you to approach small dealers. All the dealers in the UAE levy nationally determined rates on precious metals.

However, sometimes, a certain amount of premium may be added to the standard gold rate in UAE, also called the maker’s fees. These charges are low in comparison to the western rates of bullion bars, the locally produced ones especially.

In case you want to make a huge gold investment, then you should approach the large dealers or probably investment houses for gold such as Bullion Vault or Regal Assets. You also have the option of local dealers such as Kaloti and more, mostly located in the Multi-commodity centers in Dubai.

You also have the option of selecting digital trading for bullion provided by the new bullion traders through the Dubai Gold & Commodity Exchange.

Best Gold Dealers in the UAE (Offline)

We have listed for you the best gold dealers in the UAE.

• National Bullion House
• National Metal DMCC
• Dhab DMCC
• Gold Standard DMCC
• Kaloti Precious Metals
• Al Etihad Gold
• Emirates Gold
• Al Bahrain Jewelers

It is to be noted that these dealers are not ranked in any particular order.

How Can I Invest in Gold in NZ?

Gold is most popular as an investment, of all the precious metals. Currently, there is a lot of buzz about gold as an investment in New Zealand. Just like other investments, gold investment profits depend on luck.

The value of gold is increasing day by day in NZ and due to this the market is flooded with gold investment NZ dealers, whereby most investors are internet-based.

To be on the safe side, as an investor you should remember that gold is a commodity and its price can rise and also fall, so do thorough research before you go and invest in gold investment in New Zealand. Unlike many other investments, gold investment does not earn you interest. Plus you may have to pay for insurance and storage costs.

• People want to take advantage of a secure commodity as the high demand of gold generally makes it low in supply. (The demand is higher than the supply.)
• To preserve it for a long period of time.
• For asset protection.
• To protect their assets inflation/ or a decline in currencies.
• For diversification.

There are a number of ways in which you can invest in gold; PHYSICAL GOLD and PAPER GOLD.

Physical gold

Bullion is gold in bulk form such as bars, coins and ingots. You can buy bullion gold in NZ from a gold dealer directly or online. In this case you will be required to pay extra costs for secure transportation, storage and insurance.

Advantages of Physical Gold Investment

• Bullion gold is the safest form of investment in the gold market.
• It is owned by you.
• Its price will never decrease to zero unlike in other forms of investments.
• Physical gold- is accepted world wide
• It is portable.

Disadvantages of Physical Gold Investment

• It can be stolen.
• You have to store it in a vault and therefore pay a price for storage, security and insurance.
• When you buy physical gold you have to pay a price premium.

Where to Buy Gold in New Zealand

New Zealand Mint

New Zealand Mint is a NZ investment company that provides gold investment in NZ. Either you want to buy gold or silver bars and coins it is really easy with NZ Mint. All the information about their products is given on their website.

All you have to do is simply pick the product you are interested to buy then send an enquiry via a quote form or you can call them directly for further guidance.

Website: http://www.nzmint.com

Phone: 0800 696 4681 (NZ)

+64 9 377 6837 (international)

NZ Gold Merchants LTD

NZ Gold Merchants LTD is a growing industrial company that has been providing gold, silver, platinum and mercury ore assaying services in New Zealand since the 1960’s and are continuing to innovate with products and services found nowhere in New Zealand.

This is one of the best companies where you can invest in any type of gold investment. For more information about NZ Gold Merchants LTD visit their website or call them on:

Website: http://gogold.co.nz

Free phone: 0800 10 53 34

Phone: 64 9 634 0529

Fax: 64 9 634 2847

Email: info@gogold.co.nz

My Gold

My Gold is located in the heart of Auckland, New Zealand and is run by independent family that manufactures gold. They offer physical gold bars to kiwi investors and happy to help you get into gold investment in New Zealand. 

My Gold offers a wide range of Gold bar sizes at very competitive rates and is suitable for any type of investor. If your are just getting to the gold investment market or have been investing in gold for a long time My Gold will be able to help you in all your physical gold investment in NZ. 

For more information about My Gold visit their website or call them on:

Phone : 0800 465 369

Email : rich@mygold.co.nz

How to Invest in Gold For Beginners

Are you ready to buy gold now? Some people prefer to invest heavily in gold to profit in their distant future, while others want to buy into gold as a short-term investment and then sell off quickly. 

Stalking pawn shops and estate sales is a superb way to find physical gold. Gold coins and gold jewelry often turn up at such places, and you can snag them for pennies on the dollar. Don’t forget to store your stash of gold in a safe place, though.

You can also shop for gold, virtually, without ever leaving your home. If you already have a hefty investment portfolio, you may now want to consider diversifying and adding gold investments.

1. Buy physical gold

You can get exposure to gold by purchasing gold jewelry, coins or bullion. Gold bullion trades close to the price of gold, and it can refer to gold bullion bars or gold bullion coins.

Bullion doesn’t have any artistic value, which makes it different from jewelry or numismatic coins. To buy gold bullion, you have to pay a premium over the gold price which can be in a range from 3% to 10%. You’ll also have to use a vault or a bank deposit box to store it. You can buy physical gold online, in a jewelry store or through another gold storefront.

Before you purchase, make sure the price is fair, the gold is real and tested, and that you aren’t paying a higher premium for collectors coins if you’re just looking for pure gold. Be prepared to walk away if these standards can’t be met, especially if an online store or physical storefront feels shady.

A trusted online store with a 4.9 rating on google store is Silver Gold Bull. It not only allows you to buy gold but will also store it and buy it back should you chose to sell it for a profit. 

Once you buy gold, you have to store it properly. You could store it at home, but security issues could arise from this approach. If you decide to purchase and keep it at home, make sure you have a proper safe and take the necessary measures to protect your assets.

2. Invest in gold ETFs

If you are not a fan of investing in gold futures, you can try gold ETFs. Instead of owning a futures contract and paying attention to the maintenance margin, you can buy shares of ETFs and get exposure to gold.

If you’ve never invested in ETFs before and want to start, check out Benzinga’s Best Online Brokers for ETF Investing to get started. Once you pick a brokerage, you just have to open an account and pick your preferred gold ETF.

The most popular gold ETF is SPDR Gold Shares (NYSE: GLD). It costs 0.40% annually to own it. The ETF follows the gold bullion price.

3. Invest in gold mining companies

An investment in gold mining companies offers exposure to gold, but the exposure is sometimes limited. These companies carry operating risks, which can break a correlation to the gold price. Gold miners are at risk of default and their shares can trade lower in case of an operating problem with the company regardless of the price of gold.

4. Buy gold certificates

A gold certificate proves ownership of gold on paper. In the United States, gold certificates were originally gold-backed. They were worth their face amount in U.S. currency until the abandonment of the gold standard in the early 1930s. If you find an old U.S. gold certificate, however, don’t get too excited, since they only have collectible value now. You won’t be able to run to the bank to redeem any gold.

You can still buy gold certificates from a bank that has physical gold. If you do, the bank will technically owe you the gold, but you won’t own it. Instead, you will have “unallocated” gold, since the certificate represents gold value but not specific gold bullion. 

Unallocated gold does not require a high premium, so you can buy it and forget about it. However, since you don’t own the physical gold, the bank can divest itself without your input and then reimburse you.

If the bank goes under and liquidates, you could lose your unallocated gold. The bank would still own the gold, which means you could lose your entire investment. It’s up to you to decide if this is too risky a proposition.

5. Buy gold futures

Futures contracts are standardized contracts that trade on organized exchanges. They allow a holder to buy or sell an underlying at a specified time in the future and at the price from the futures contract.

You’ll need to open a brokerage account to get started.

Here’s how it works: A gold futures contract at Chicago Mercantile Exchange covers 100 troy ounces. To trade it, you need to deposit an initial margin, which is a minimal amount necessary to open a position. Every day your position is going to be marked-to-market. This means that if the price goes in your direction, you’ll make a profit. If it goes against you, you’ll lose money.  

If your account drops below the maintenance margin, you will have to transfer money to your account to meet the amount of the initial margin. Futures contracts are leveraged instruments. You need to only need your account balance to be equal to the initial margin, which is lower than the value of the whole contract.  

Most brokers do not have the delivery option, so the contract is settled in cash when it expires. The expiry is also a standardized feature of the gold futures contract and investors can choose their time horizon while keeping standard expiration in mind. Later expiry contract prices can be higher than the spot price and earlier expiry futures. When this is the case, we say that the market is in a contango.  

On the other hand, when the spot price or the price of early expiring contracts are higher than the price of later expiring futures contracts, we are in a backwardation. If you are buying gold when the market is in a contango, you will also have to pay a premium for later expiry contracts.

How to Invest in Gold Online

Digital gold is kept in vaults and stored online. You can buy gold digitally based on its weight or by specifying the amount of money you want to spend. The government-owned MMTC is issuing the Digital Gold in collaboration with PAMP of Switzerland, a global leader in bullion branding.

PhonePe, Paytm, SafeGold, Google Pay, MobiKwik, and other mobile e-wallets, as well as online banking apps and websites, offer digital gold. You should take a close look at digital gold as an asset class. It’s not just about the allure of gold; it’s also about the security and protection that Digital Gold provides with minimal effort. These transactions can be used to sell digital gold and obtain liquid cash.

Alternatively, you can get your money back by buying the gold you bought in physical form. Digital gold investment is treated similarly to physical gold ownership for all tax purposes. The amount of tax you must pay is determined by the holding period.

Investing in Gold Stock

If you can’t get your hands directly on any gold, you can always look to gold mining stocks. Keep in mind however, that gold stocks don’t necessarily move in concert with bullion prices, because mining companies succeed or fail based on their individual operating performance and how they deploy their capital and generate profits. You don’t have the security of physical possession of the metal if the companies you buy are unsuccessful.

Which Country Has Cheapest Gold?

Based on gold prices at the end of 2020, Hong Kong may be the cheapest country to buy gold from, going by listed face value prices. According to sovereignman.com, it’s possible to easily purchase gold in Hong Kong at a lower premium than what’s common in other countries. However, you generally have to physically go to banks in Hong Kong to get the absolute lowest prices.

This isn’t to say online purchases can’t be made from Hong Kong or other countries with low gold prices, although there’s typically a markup added to online purchases. This isn’t necessarily a bad thing, as long as the markup is reasonable and up-front.

Other countries with typically low gold prices include:

• The United Arab Emirates (UAE)
• Thailand
• India
• Switzerland

Another way to keep track of gold prices in various countries around the world is to check your preferred gold price chart. This will give you a better idea of how gold prices are trending and which countries are currently offering gold at the lowest prices. Some online-accessible charts even list global gold prices in real time.

Cheap gold from Hong Kong or any other country offering low purchase prices is only going to be a good buy in terms of potential resale value if it’s in a universally recognized form. What you can do is search for the lowest purchase price by country based on a specific type of acceptable gold.

With gold bullion in the form of coins, in-demand selections include:

• U.S. Eagles
• Canadian Maple Leafs
• Austrian Philharmonics
• South African Krugerrands

Why is Gold so Cheap in Dubai?

Dubai has always been favored for its exemption from taxes. It is one of the main reasons why people chose to move to the city, as well as buy gold. Due to the exclusion of taxes in the emirate prices for gold in Dubai have always been cheaper as buyers would only pay for the value of the gold jewelry.

Although the introduction of the Value Added Tax(VAT) in 2018 does levy a 5% tax on any items purchased, buying gold is still considerably cheaper in Dubai compared to other countries in the world. Also, tourists can claim VAT refunds in the UAE for all purchases made in the country. 

VAT in Dubai is currently the only form of tax applied on any gold purchase. In other countries, for example, India, apart from VAT there are various other taxes such as goods and services tax(GST) and excise duty applied when purchasing gold jewelry which make it more expensive.

How Much Does a Gold Bar Cost Today?

The spot price of gold is the most common standard used to gauge the going rate for a troy ounce of gold. The price is driven by speculation in the markets, currency values, current events, and many other factors.

Gold spot price is used as the basis for most bullion dealers to determine the exact price to charge for a specific coin or bar. These prices are calculated in troy ounces and change every couple of seconds during market hours.

What is The Price of Gold in NZ?

The gold price displayed above is updated every minute.

The data is retrieved continuously 24 hours a day, 5 days a week from the main marketplaces (LBMA, NYMEX, GLOBEX, HONG KONG).

The “spot” price is the reference price of one troy ounce, the official unit of measurement on the professional market for spot transactions. One troy ounce represents 31.1 grams.

With GoldBroker.com you buy and sell on the basis of the spot price in Euros, US Dollars, Swiss Francs or British Pounds.

The gold price in NZD is updated every minute. The data comes from the gold price in US Dollars converted at the exchange rate of the USD/NZD pair.

Which Country Gold is Pure?

When it comes to gold, people love to buy it, flaunt it, sell it, and in fact discuss it. So, wouldn’t you want to know about the places in the world where you can buy pure gold? We assume that your answer is yes.

Therefore, for the affection towards gold and its shopping, take a look at these five places across the globe where you can purchase pure gold.

1. The Emirate of Dubai, UAE

Whenever you talk about Dubai, the thought of purchasing gold definitely comes in your head. What began with the trading of gold is now one of the famous places for selling pure gold. Gold Souk in Deira is the hub for buying gold. You can check the current gold rate in Dubai before buying. You will believe us when you see the elaborate gold display and festive crowds.

The windows of the shops laden with gold jewelry are a beautiful and glittering display, which will leave you speechless. You can also look for promotions and discounts, which will allow you to buy gold at an amazing rate depending upon the gold price in UAE and offer you some intricate designs to choose from.

Best Locations: Malabar Gold, The Gold & Diamond Park, Joyallukas D’damas, Dubai Gold Souk

2. Hong Kong, China

This is a famous hub for shopping and receiving amazing deals, so it does not come as a surprise that it comes under this list. You can visit Hong Kong and buy gold at the most economical rates. It also amongst the most active markets for gold trading across the globe and is a rate setter for many places.

Considering this dominant position of Hong Kong, purchasing gold jewelry in high quality from there could a good deal. The goldsmiths there are popular for their creative designs. Moreover, you can also buy customized designs rather than purchasing off-the-rack ornaments.

Best Locations: Chow Tai Fook, Luk Fook Jewellery, Chow Sang Sang 

3. Cochin, India

If you ever see a traditional wedding in the state of Kerala in India, you will see that a lot of importance is given to the gold ornaments that the bride wears and the gold presents exchanged between both the bridal sides.

This importance for the metal transcends on to the festival of Diwali, where the ladies put on their best gold ornaments. Purchasing gold is amongst the most common investments in India, and so is the case in Cochin.

Best Locations: Malabar Gold & Diamonds, Joyallukas, Bhima Jewels, Malabar Gold

4. Bangkok, Thailand

Shopping in Bangkok is already an amazing experience. And purchasing the golden metal in this city is especially satisfying due to the low margins and the huge array of options. There are places in the city, where gold jewelry shops greet buyers with beautiful designs.

You need to be careful while purchasing gold in Bangkok because there are many shops that may sell gold at a reasonable price; however, the quality can be compromised. Yaoworat Road is amongst the trusted locations for buying gold and can be a one-stop destination for purchasing jewelry.

Best Locations: Tao To Kang and Hua Seng Heng at Yoaworat Road, China Town

5. Zurich, Switzerland

As soon as we hear Switzerland, all that comes in our mind is delicious chocolates and designer watches. However, did you know that Switzerland is also one of the locations in Europe for buying and storing gold? The famous Swiss bank accounts contain scores of gold stored inside them. There are many Europeans and Indians who consider this tax-haven for purchasing gold.

Purchase gold coins, bars or jewelry after selecting from the most beautiful designs created by the craftsmen who pass on their skills to generations. The main downtown street, Bahnhofstrasse in Zurich is also an amazing place for buying gold-encrusted accessories, watches, eyewear, etc that are a worthy addition to your collection of precious things.

Best Locations: Chopard, Bulgari, Tiffany and Co, Cartier, Bucherer

Which Country Gold is Best?

Below are more details on the top 10 countries with the largest gold production in 2019, beginning with the top producer and top consumer of bullion, China. All data is from the World Gold Council.

1. China – 383.2 tonnes

For many years, China has been the top producing nation, accounting for 11 percent of global mine production. However, production fell from nearly 400 tonnes last year, representing the third consecutive year of declines. The downtrend is largely due to tighter environmental policies imposed by the government. For example, stricter control over the use of cyanide at gold mines forced several operations to cut back production.

2. Russia – 329.5 tonnes

A massive 83 percent of European gold comes from Russia, which has been increasing its production every year since 2010. Russia took the lead over Australia to become the world’s second largest producer – mining 50 tonnes more in 2019 than the year prior. Who is the largest buyer of Russian gold? The Russian government, of course, which purchases around two-thirds of all gold produced locally.

3. Australia – 325.1 tonnes

Australia has posted seven consecutive years of increases in production, up by 4 percent in 2019. The minerals industry produces over half of Australia’s total exports and generates about 8 percent of GDP. Higher production at several mines and the ramp of projects such as Mount Morgans and Cadia Valley contributed to increased production.

4. United States – 200.2 tonnes

American gold output fell by 11 percent in 2019, ending five consecutive years of growth. Twelve states produced the gold, worth about $8.9 billion and accounting for 6.1 percent of the global total. Around 78 percent of gold produced in the U.S. is from Nevada. If the state was considered a country, it would be number six on this list with 173.6 tonnes mined in 2019.

5. Canada – 182.9 tonnes

Canada has held the number five spot for three years now, even with a slight decrease in output in 2019. New projects in Nunavat, Yukon and Quebec are expected to support stronger output in 2020. Canada’s gold mine production is estimated to grow by a compound annual growth rate of 2.7 percent from 2019 to 2023 to reach 7.6 million ounces.

6. Peru – 143.3 tonnes

Gold output fell for a fourth consecutive year in Peru largely due to crackdowns on illegal mining operations in the La Pampa region and lower grades at existing projects. Mining is a significant portion of Peru’s economy and accounts for over 28 percent of the region’s total output.

7. Ghana – 142.4 tonnes

Ghana is Africa’s largest producer of gold, beating out South Africa for the top spot in 2019, and is also known for its reserves of various industrial minerals. Industry majors such as AngloGold Ashanti and Gold Fields have shifted their focus from South Africa to Ghana where deposits are cheaper and easier to mine. The West African nation has around 1,000 metric tons of reserves and moved up to number seven on the list from 10 last year.

8. South Africa – 118.2 tonnes

Once the top gold-producer in the world by a wide margin, South Africa’s gold mines have been slowing every year since 2008, with the exception of 2013 when production rose by a few tonnes. The nation is struggling with rising costs for electricity and labor, with many mines closing due to unprofitability. South Africa is, however, still home to the world’s deepest gold mine, the Mponeng mine, extending 2.5 miles underground.

9. Mexico – 111.4 tonnes

Although production fell for a fourth consecutive year, Mexico remains a competitive gold source. Output has risen from just 50.8 tonnes in 2008 to over 130 tonnes in 2017, one of the largest increases in a nine-year span. Mexico is an attractive place for mining due to a relatively low cost of regulation. The 2019 slowdown is attributed to disputes between local communities and contractors.

10. Brazil – 106.9 tonnes

Brazil produced 10 more tonnes of gold than the year prior to make the number 10 spot on this list. Illegal mining activity has risen sharply in the last five years in the heart of the Amazon rainforest. President Jair Bolsonaro has pushed the country to develop the Amazon economically and tap its mineral riches.

Do Banks Sell Gold Bars?

No they do not, at least in America. The USA used to have a system called the gold standard, in which dollar bills were representative of their value in gold, which is why we had gold coins up until the early 1930’s. After this abandonment of the gold standard, the USA only has ever used gold coins for minting commemoratives and collectible coins.

Most likely, the only gold in your bank will be found in safety deposit boxes. In some of the Gulf States of the Arabian Peninsula (Especially the UAE), you can find ATM’s that dispense gold bars, but that is a whole different story.

Can I Buy a Gold Bar?

Buying physical gold bars online is a fairly simple process. Browse gold bar products on reputable retail websites such as APMEX, JM Bullion, and WholesaleCoinDirect. Select the gold bars you wish to buy by weight, quantity, and price.

Online gold retailers typically give discounts to customers who buy larger quantities. Certain retailers give discounts for using a credit card, while others do so for using wire transfers, so choose the more cost-effective payment option. Once you receive the gold bars, keep them in their packaging to prevent scratches and store them in a home safe or safety deposit box at your bank.

You can also bid on gold bars on eBay. When shopping for gold on the auction website, it is important to review the seller’s feedback. Avoid buying from sellers with documented negative feedback on authenticity, exorbitant shipping and handling fees, and failure to deliver.

Gold-to-Go ATMs are available if you wish to buy gold bars in cities such as Las Vegas and Dubai. Consumers are advised to be especially aware of the spot price of gold since such ATMs sell the precious metal well above this price and above the prices of most other retailers.

How Much Gold Can a Person Own?

In order to clear the doubts the CBDT issued a clarification on 1st December, 2016. This circular reiterates the earlier directions issued to income tax officers in connection with seizure of gold jewellery and gold ornaments at the time of income tax raid, which was issued on 11-05-1994.

This circular defines the limit for seizure but it no where specifies the ceiling or maximum amount of gold that you can own, which means that the gold will not be seized to the extent of the limit but you may still be asked to explain the source.

If you have acquired the gold from explained sources of income including inheritance then there is no maximum limit on holding of gold jewellery or ornaments. However, your ITR should correspond to the amount of gold which you are holding.

Moreover, it is advised that you keep the invoice of your purchase. In case of exchange of gold jewellery, keep a copy of invoice of the exchange along with the invoice of the original purchase.

In case of inheritance it is advised to keep a copy of Will. It acts as a proof of your inheritance. If the person from whom you have inherited the gold was wealth tax payer it becomes easier to establish the quantity of gold inherited by you.

Wealth tax has been abolished but you still had a liability to disclose your wealth in case it exceeded Rs. 30 lacs and file the return up to 31 March 2015. So if you have filed your wealth tax return where you have disclosed the gold you own then your ownership gets verified and you can keep the gold.

Can The US Government Take Your Gold?

If you’re not careful, your government can confiscate your gold. Moreover, it can probably do so without compensating you. The United States, British, Australian, and many more governments have all done this within the last 100 years. So the clear answer to can the government confiscate your gold is yes. The real question is how can you avoid it?

Confiscating the gold of its citizens could be one way that a central government could cope with the effects of a financial crisis. According to a New York Times archive, “The Executive Order issued by the President yesterday amplifies and particularizes his earlier warnings against hoarding.”

So why is gold hoarding a problem? Well, under the Federal Reserve Act (1913), the government needed to back paper money with 40% of its value in gold. And room to issue new money was getting tight.

Read Also: Investing in Cryptocurrency: Is it Worth the Risk?

So here’s what they did. The Roosevelt government called anyone who owned more than roughly $100 (back then) of gold a hoarder. About a year later, they went after silver too. Sure, jewellers and others busy precious metals it in the course of professional activity were exempt.

On the other hand, if you had more than roughly 5 oz of gold in coin, bullion, or certificates, you were ordered to cash them in. A bank would then exchange your gold at USD 26.67 per troy ounce. Note that the CPI-adjusted value of that cash was just under USD 400 at the time of writing.

Don’t like the act and the government will confiscate your metal anyway, and then fine you. And what justifies this? Why did the government need to increase the money supply? Many reasons, but none more relevant than to pay off debt.

The Keynesian policies and New Deal couldn’t be solved so easily. While quantitative easing (QE) policies require congressional approval, that’s easier than a gold standard requiring 40% gold-backing. Some debates on should we go back to the gold standard climax on this monetary policy requirement.

Within months of making gold illegal to own, Roosevelt raised the price by 40%. Gold went straight up to an official $35 per ounce. In doing so, US central funds were boosted dramatically overnight. So what really happens is that the government takes your gold, forces you to accept cash, and then makes the cash worth less gold.

Although it makes less sense for governments today to engage in these tactics today, extreme and rare circumstances still happen. it remains true that governments will go to extreme measures to negate the effects of a financial crisis, for instance. Unfortunately, such measures often just pass the burden to future generations.

For modern-day examples of how the government can invent laws to keep a firm hand on gold, look at Bitcoin. A plethora of nations have banned cryptocurrency trading. Now think about the relationship between bitcoin, gold, and similar assets. All hedge against market risks and fiat currency.

If a democratic government will ban Bitcoin, then it can surely enact laws limiting precious metals given the right circumstances. Look at Germany’s repatriation of gold and you may notice preparations for a financial crisis. Countries buy gold for much the same reason individuals do. Yet, most of us don’t begin wondering about can the government confiscate your gold until it’s too late.

Conclusion

Gold should be an important part of a diversified investment portfolio because its price increases in response to events that cause the value of paper investments, such as stocks and bonds, to decline. Although the price of gold can be volatile in the short term, it has always maintained its value over the long term.

Through the years, it has served as a hedge against inflation and the erosion of major currencies, and thus is an investment well worth considering.