How to buy gold
A question we get asked quite a bit from readers is how do I buy gold?
There are four main ways to invest in gold.
1.Buying gold buillion as in in coins, bars or jewelry
2. Investing in gold futures
3. Investing in gold Exchange Traded Funds (ETFs).
4. Investing in gold mining companies through stocks.
Watching the Dow/Gold ratio is an indicator that tells when gold is at the high, middle or low end of the scale is value.
During the years 1929 to 1942 and again during 1968 to 1980, the Dow/Gold ratio was around 20 and actually was outperforming the stock market. Today, that ratio is a little below 8. Those who bought gold in the slump in 1980 at the Dow/Gold ratio of 1 are starting to see an investment growth. This can be rewarding if you have patience.
Gold bullion
Any gold coin before 1933 is an excellent investment. The United States Mint website has a handy coin dealer’s database on their website. Buying broken gold jewelry, other gold items and collectibles can be an enjoyable way to collect gold for investment, but one must be aware of scams both on the selling and buying end and must take into consideration the premium values places on jewelry for the craftsmanship and design. Any jewelry over 14 karat gold is a good risk. Scrap gold is one of the safest and most enjoyable way to invest in gold.
Gold bullion is a relatively safe method also, and probably the best for the new investor. This is the method for investors willing to wait long term; as gold will resist inflation even after economies improve.
Gold Futures
Commissions for Gold futures, purchased through commodity traders, are negotiable. You are contracting to buy Gold at a higher value than you are actually outlaying in cash, with a belief in the future value. Investors should only invest capital that they can afford to lose. The benefit here lies in using leverage but using leverage also involves risk.
Gold Exchange Traded Funds
ETFs are purchased through the regular stock market avenues, with the same thoughts and processes of buying any stock. Buy low and sell high. We will do another post on gold etfs explaining the advantages of investing this way.
Gold Mining Companies
A very popular method of investing in gold is through gold mining companies. These are gold companies that are producing and/or are exploring for gold. You can buy these shares through the stock market. The Toronto Stock exchange is home to many of these gold mining companies. These companies are very volatile and can have explosive moves to the upside or downside depending on various factors. We will have a more in depth post all about gold mining companies in the near future.
Categories: Stock Tips Tags: gold, gold bullion, gold coins, gold etfs, gold futures, gold mining companies, how to buy gold, how to invest in gold
Copper and copper stocks
Copper and Copper Stocks
Copper is the leader of the pack when it comes to base metal stocks. In the next five or six months, base metals are expected to show a surge and Copper will be right at the top. Research Analyst Vishal Gupta, of Frasier Mackenzie, who has a background in geology, mentions three copper stocks that deserve watching:
- Foran Mining Corporation, at the Mcilvenna Bay project, in Canada.
- Arian Silver Corporation, a company active in Zacatecas, Mexico.
- Red hawk Resources, at Copper Creek in Arizona.
From Copper coins in 8000 B.C. to the newest semi-conductor manufacturing in silicon chips, Copper is one of the first metals ever to be extracted and used by man. In 5500 B.C. early man found out how to make copper into tools, and by combining with tin to make bronze, it was even more useful around 3000 B.C.
Copper is easy to mold, shape, stretch and resistant to corrosion. It is a conductor of heat and electricity and used in building construction, power generation and transmissions, electronic products, industrial machinery and copper wiring and plumbing materials.
In the automotive field, copper is used in:
- Motors
- Wiring
- Radiators
- Connectors
- Brakes
- Bearings
A small vehicle has around 44 pounds of copper in its construction and almost 100 pounds go into hybrids and ATVs.
Newer uses today include the antimicrobial properties of Copper that reduce transfer of disease and germs; circuitry; microprocessors and copper rotors in electric motors. The Copper-Nickel alloy is used in hulls of ships as it doesn’t corrode in salt water, and it reduces drag and increases fuel efficiency because sea life like barnacles don’t adhere to it.
Copper goes “green” by being the most widely recycled metal worldwide. About 1/3 of all copper consumed is recycled. It is easily re-melted to use directly or reprocessed into refined copper without losing any valuable properties. 160 minerals are derived from Copper; the most common are chalcopyrite, malachite, azurite and turquoise.
Categories: Stock Tips Tags: arian silver corporation, copper, copper juniors, copper stocks, foran mining corporation, red hawk resources
Graphite stocks
Graphite and Graphite Stocks
Graphite, also called “black lead” is black, soft to the touch, and has been around and in various uses for hundreds of years. Also, new uses are being found continually, and some have called it the “perfect” mineral! It is conductive, a dry lubricant, resistant to high temperatures and one of the strongest substances known to man. It does not have one major market, but many.
The three forms of graphite; crystalline flake, amorphous and lump are found in Canada, Brazil, Europe, India and over 80% of the world’s graphite is produced in China. Both the United States and Europe have classed Graphite as a strategic metal.
Graphite is used in:
- Lead for pencils
- Ceramic paint
- Refractory molds
- Brake Linings
- Foundry Facings
- Dry Lubricants
- Electrodes
- Nuclear Reactors
- Lithium Ion batteries, in smartphones, laptops, hybrid-electric cars
Graphite has been reported as the next “big thing” with the demand for lithium ion batteries. Each hybrid-electric car requires 40 pounds of graphite. Graphite Stocks have hit new highs recently, while gold and silver have hit two year lows. Global demand for graphite is expected to increase. The Graphite boom may be just beginning.
China, who produces over ¾ of the world’s graphite is consistently cutting exports and adding tariffs on graphite exports, and will be working on keeping a big piece of the profit pie internal. New graphite mines are needed.
To invest wisely in Graphite stocks at this time, it is prudent to note the size and quality of the corporation’s mineral deposits; the ability of the company to economically source the mineral; how soon they will be up and operating, if they are in experimental stage; the company’s track record in production and sales; and to look at the company’s 90 volume on all trading systems.
List of Graphite Stocks to invest in.
Categories: Stock Tips Tags: graphite, graphite stocks, list of graphite stocks, what is graphite