What is the Value of Gold? Basics in Investing in Gold
Gold – The Most Bankable Element
The ups and down of the world stocks, shares and commodities are not for the faint-hearted. Those who realize what axis the entire economy of the world spins around on – bank only on gold. Then buy or sell gold bullion.
Gold has the enviable track record of steady appreciation, even in adverse conditions. In boom situations the prices go through the roof. In recession, it is gold that falls the least. Therefore, as a speculative opportunity, one cannot go very wrong with gold. People who sell gold bullion and buy gold bullion are trading in one of the most dependable assets the world has ever known.
The Scene Down Under
Australia gold, its use and trade, follows the international pattern. To sell gold bullion and buy, in jewellery markets, appraisal of gold, investing in gold, and loans against gold engage a large section of the community comprising traders, jewellers, pawnbrokers and the public alike. Attractive loans are to be got from pawning gold. Bullion and jewellery demand the best loan rates.
How Does One Evaluate Gold?
The best advice for honest evaluation of jewellery in England comes from the N.A.G. Institute of Registered Valuers who recommends a seller to shop around. Then National Association of Goldsmiths (N.A.G.) represents most of the jewellery retailers in the UK. Showing your jewellery to three or four accredited evaluators would allow you to fix on a value quite fairly.
The “hallmark” on the gold ornament is an old and trusted form of consumer protection. Three signs are mandatory –
• The sponsor’s mark: a unique sign bearing the initials of the organisation or individual sending in the article of hallmarking;
• The millesimal fineness mark: a 3-digit number signifying the quantity of precious metal in the article per thousand parts; and
• The town mark: showing which assay office tested and marked the article.
Optional marks which may be included are the date mark, showing the year of the assay, and the conventional fineness symbol, the traditional sign of the metal itself – for instance, a lion passant indicates sterling silver and a crown indicates gold.
Solid Gold is Equal to Cash
The most important thing about gold – for those investing, for people who love gold jewellery and those who want to buy or sell gold bullion – is that its high intrinsic value is very liquid and can be readily converted to cash at very near its market rate.
Manufactured jewellery has added costs, like making charges, sales and marketing expenses, and retail margins. At resale, it is the value of the gold contained in the ornament that dictates its price in the bullion market.
Image by wallyg via Flickr
Determining the Price of Gold
To determine the value of gold in a piece of gold jewellery one has to know three determinants:
• the carat of the gold
• the weight of the metal in the ornament
• the current price of gold
The price is usually quoted in US$ per ounce. One can arrive at this by a simple calculation:
31.103 grams make up a Troy Ounce – the unit used for precious metals.
If one divides the price of gold (generally given in US$ per ounce) by 31.103 one gets the price of one gram of gold in US$. The figure can then be converted to one’s local currency. Then, one has to multiply the price-per-gram by the percentage of actual gold in the ornament according to carat and then multiply by the gram weight of the ornament. This is done because the percentage of gold contained is important. The carat figure indicates the purity. If this is not factored in, a buyer can overpay dearly.
What’s Not Gold is Second Best
As the best investing option, and as an assurance of liquidity, gold retains the divinity accorded to it by the alchemists of old. It remains the only true currency, internationally. More than jewels, stocks or commodities, gold stays steadfast through all uncertainties and appreciates in value over time.
Any other choice is not, as anyone would say, as good as gold.
Israel Brown is an avid commentator on society and government with a special interest in the relation between wealth and power. Strong in his conviction that gold is the only true world currency around which every other marker defines itself, Brown looks at gold markets and bullion trade and interacts with gold buyers, sellers and investors from round the world. Every observation goes into a little notebook that anyone in the trade would love to take a peek into. Need answers about top cash rates at GoldBuyersMelbourne.com.au? Israel, is the best person to ask.