One of the most basic considerations of where the best place to buy gold may be is price. Price plays a significant role in developing any investment from purchase through profit building. How does price play a part in building profits? The answer is seen through the range of value that extends from price to profit. If, someone invested a dollar in gold, but the spot price of gold is .75 then the range of value of gold must rise 25% before the break even point is reached. This is of course an extreme example, but it should illustrate the concept.
Best Place To Buy Gold – Price:
The price of gold can be compared on a historical level and on a current daily level. With most investments, it is important to do the research. Understanding the market is a key aspect to determine where the best place to buy gold may be. There are different price points that should be utilized by each investor. The information that is contained in the price standards can help to identify buying and selling times.
Spot Price: The spot price of gold may refer to either the daily spot price, or the monthly spot price. The daily spot price is set each business day in the last two minutes of trading. The daily spot price is an average of the lowest and the highest price of gold during that last two minutes of trade. The monthly spot price of gold is an average of the lowest and highest prices of gold in a specific month. While the two versions of spot pricing are very different, they provide a great deal of information. Comparing the two spot prices can pin point trends within the gold investment arena.
Premium Price of gold: The premium price of gold is a critical tool that investors can use to analyze risk. The premium price of gold is a percentage and not a dollar figure. The premium price of gold shows the mark up on the offered price of gold. This is formula that an investor can use:
((Quoted price of gold-spot price)/spot price)(100) = premium price of gold.
The break down: The quoted price of gold is the price that a seller offers their gold at. A mint for example, usually has a quoted price that is the daily spot price + 4%. If the daily price, of gold is $1800 per troy ounce, then the mint price is $1872.00 per troy ounce. Plug this into the formula: 1872-1800-1800 = .04 X 100 = 4%. Why is this important? This is important because as investors look for the best place to buy gold, that percentage plays a very large role in determining profitability of the investment. In the example above, the break even point of this investment is a 4% increase in the price spot price of gold. To make a profit on this investment, the price of gold must rise more then 4% above the purchase price.
This is where the various price markers come into play. The monthly spot price and the daily spot price can be tracked to see if it is likely that the price of gold may or may not rise above 4%. Price can be used to help determine risk. When gold is purchased in smaller volumes, this tool is a critical aspect of evaluating risk. The best place to buy gold is dependent upon price. The closer the quoted price of gold is to the spot price of gold, the less the investment must gain in value before the break even point is reached. The lower the percentage of the premium price of gold is, the less the spot price of gold must rise to see profitability.
The Best Place To Buy Gold – Forms of Gold:
Investors who do their research will usually have a favorite form of gold that they want to invest in. Gold comes in many different forms. Investments in gold are usually in the form of bars, ingots, or bullion. Gold bars for sale may be any of these forms including coins. Antique coins and jewelry should be avoided because they often have a significantly higher mark up, than the more traditional forms of gold.
Smaller investors will probably find mint issued gold coins and ingots of interest. These are typically sold as in individual piece or in varying measurements of weight. It is still very possible to find gold bars for sale, but with the current price of gold rising, the investment capitol would need to be significant. Larger investors who can afford to purchase gold in volume may look for gold bars for sale at sites like www.bullionvault.com. Web brokers can be a great source for all different kinds of gold. One of the most important aspects of web brokers is their inventory. While mints may sometimes have lower prices, they may not have the product selection. If the investor is looking for something that is very specific, then the web broker may be a good place to start that search.
Investors can look at price as a tool and make conscious decisions about buying gold bars or investing in other forms of gold. It is a good idea to shop around, especially for specialty items that may not be offered at a mint. Utilize online resources such as www.bullionvault.com to check the availability of different forms of gold. Look for discounts and utilize special offers when they are available. All of these components go into deciding where the best place to buy gold may be.