Gold: A Wise Purchase for Long Term Investment

Dec. 17, 2010 - PRLog -- Gold is a precious metal commodity that has been traded for centuries. It has been admired for both its beauty and value and remains the symbol or wealth. An investor may want to know whether gold continues to be a wise investment during periods when the market is most unstable as during the present. Investing in gold is simple as it can be purchased as a physical asset, an ETF or in futures and options.

Gold as a physical asset can be purchased through a number of vending systems - http://www.silverandgold.biz/how+to+buy+physical+gold/. There are some banks capable of selling gold bar, or bouillon. Solid gold, however, is more likely purchased from a dealer. Each gold bar will be marked to represent both the purity and weight and is available in sizes beginning at one ounce. The value of one ounce gold bullion is determined by the market and has reached a record value just over twelve hundred dollars. Investors should view market price carefully as the price does fluctuate slightly while it is this high.

Exchange Traded Funds, or ETFs, (http://www.silverandgold.biz/gold+exchange-traded+funds/) are another possible method for investing in gold. A single ETF has the value of one-tenth ounce of gold. This allows an investor to purchase smaller volumes than real gold bullion, which is minimally one ounce. The cost of a single gold ETF is one-tenth the cost for one ounce of gold. The disadvantage to purchasing gold through Exchange Traded Funds is that the investor does not actually own gold. Instead the investor owns stock in the gold rather than owning the gold itself. A company issuing the fund could show business losses or bankruptcy and the investor would still lose on the gold investment.

Gold can also be purchased through futures and options. In this case the investor is investing on the future price to go either up or down. Futures and options may be regarded as a more complicated method of investment than the physical asset or ETFs. The investor agrees to buy the gold commodity when the future price reaches the invested amount. For example, an investor may decide to invest one thousand to purchase gold when it drops to this level.

Whatever method investors choose, gold remains a highly valued commodity throughout the world. Over time, the price of gold has avoided inflation and troubled economy and continues to be a good investment. Gold bullion is the one commodity that can be sold anywhere in the world. Buying gold provides a commodity that generally maintains a level of stability and continues to be the choice of investors to negate unstable conditions in the market. The value of gold can drop over the short term but continues to grow over the long term.

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