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Gold’s Store Value

April 23, 2013


When you buy gold or sell gold all one has to remember is the spot price that you will be selling the gold at. Spot prices are the prices that are determined by the London Bullion market two times a day. The London bullion market representatives set the market price for sell gold bullion of the world follows suit. However, the spot gold prices is not the price you will be paid as you have to remember that the local dealer will have to make a profit as well, this trend moves upwards until the gold reaches the gold refiners who only then will sell the gold to market at the spot gold prices that is prone to speculations. As such whenever you decide to sell gold you have to accept the fact that you might only be receiving 85 – 90 % of the market value of the gold.

This same aspect goes to silver as well as other precious metals that are traded in the market. Taking this matter into consideration, the sale of gold coins, bullion or even jewelry are not good short term investments. They provide good returns however over long periods of time in terms of preserving the purchasing power that printed paper money loses over time and precious metals do not. What actually transpires is that the value of the precious metals in question does not gain value but printed paper money actually loses value.

Many investors who buy gold think they get more money after a period of time. It may seem so, but is entirely untrue as the precious metals do not gain value as mentioned before. To exemplify this point, we may take an amount of gold and match that same amount at two different time intervals of purchasing the same product (basic necessity); you will realize that the gold will allow you to purchase almost the same quantity of the product, although the price of the gold is varied by a huge difference. This is called the ‘store value’ most precious metals have store value that increase and decrease according to the prices of basic goods. The only difference is that the cash for gold melbourne in terms of printed or minted paper currency or tin based coins have lost value. This however does not affect gold coins or silver coins as they even disregarding heir numismatic value will still retain the gold value according to the quantity contained.


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