Gold Buying 101

The first thing to realize about buying gold is that there is practically never a “bad time to buy.” The reason it’s easy to say that with confidence is that gold is a “long term” investment. Even people who bought gold at its peak price in 2011 (over $1,900 per ounce) could potentially see profit in time. Moreover, it’s quite possible that time will come sooner than anyone thinks. What’s also very important to keep in mind is that while they’re waiting, their gold is an active insurance policy ready to come to the rescue at a moment’s notice. A sudden stock market collapse, terrorist attack, cyber-attack or currency devaluation could wipe out a portfolio in an instant. Gold is the world’s best time-tested hedge against such financial calamity.

The second critical feature it is necessary to understand about gold is that it is truly a “precious metal.” By definition, that means it is both valuable and scarce. If all of the gold mined throughout history was collected, melted and poured into a cubic container, that container would only be 20 meters tall. However, in the past, gold was regularly recycled. Some of the gold in your gold watch may have been originally mined by the Romans, 2000 years ago. But today, due to the way it is being used in the technology industry, 12% of current world gold production, according to the British Geological Survey, finds its way into a use requiring such a small quantity, per product, that recycling may no longer be economically feasible.

So, with a growing percentage of the gold being produced, being consumed, scarcity becomes an even bigger issue, as time goes by. Moreover, today there is such a small availability of gold in the world and trading takes place in such an instant, that a group of hedge funds or a handful of the top 1% of worldwide wealth-holders could snap up everything available, before almost anyone could react. It’s important to realize that it wouldn’t take a conspiracy to make that happen, those groups are in a much better position to react to economic calamity, than almost any individual investor. The smart and safe thing to do is to protect your portfolio, with physical precious metal, now while it’s available.

Low prices and dips are great excuses to add to an existing precious metal supply, but waiting for a “prime buying” opportunity, when your portfolio has no physical precious metal protection is akin to playing Russian roulette with a fully loaded pistol. It’s not a winning scenario. Don’t be in a position to get left out, when the crushing demand occurs. Protect your assets and your legacy now, with physical gold and other precious metals.

Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.