Much has been written and said about the subject of precious metals and its pursuit by humans. Many have spoken about the joy and splendour of acquiring precious metals like silver and gold. Still, others have spoken about the futility of material pursuits and its lifelong obsession by its pursuers. In this section, we explore 15 quotes about gold that could possibly tickle our intellect.

1)

“Don’t gain the world and lose your soul; wisdom is better than silver and gold” – Bob Marley

In this quote, famous reggae singer-songwriter Bob Marley reminds us about the futility of chasing material things and alludes to the fact that knowledge and wisdom is far more precious an asset than man’s love for silver and gold. Source: Brainyquote.com.

2)

“It’s health that is real wealth, not pieces of gold and silver” – Mahatma Gandhi

Freedom fighter and champion of peace and non-violence, Mahatma Gandhi was an international personality, famous for his philosophy and frugal living. Indeed, this thought process is quite apt. People who ignore their health and focus only on building wealth, may not be able to enjoy the fruits of their labour, once their health breaks down. Source: Sparkpeople.com

 

 

3)

“Gold medals aren’t really made of gold. They’re made of sweat, determination and a hard to find alloy called guts.”

– Dan Gable
Former American freestyle wrestler and coach Dan Gable talks about the real ingredients required inside a human being to win a gold medal. With greater introspection, we realise that it isn’t just the gold medals won in a tournament that he is referring to. It’s every achievement in life, and nothing good comes easy. Source: Goodreads.com

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4)

“All that is gold does not glitter, not all those who wander are lost; the old that is strong does not wither, deep roots are not reached by the frost.”

– J. R. Tolkien
This is an old saying, which simply reiterates the old maxim that everything isn’t always what it appears to be. It is taken from a poem written by Tolkien for the book – The Lord of the rings. Source: Wikipedia.

5)

“Truth, like gold, is to be obtained not by its growth, but by washing away from it all that is not gold.”

– Leo Tolstoy
Tolstoy applies the principle used by gold diggers during the gold rush, where gold was sifted from river beds and dirt and gravel washed away. In the same way, the truth emerges once all other possibilities are considered and ruled out. Source: Supanet.com

6)

“Fire is the test of gold; adversity, of strong men”

– Martha Graham
Martha Graham was an American dancer and choreographer. The quote refers to the laboratory practice of removing impurities and base metals from gold by heating it up to 1100 degrees to extract 24k gold for conversion into gold bars and gold coins. Graham uses the comparison to say that winners come out stronger during tough times. Source: Quotefancy.com

7)

“But in truth, should I meet with gold or spices in great quantity, I shall remain till I collect as much as possible, and for this purpose, I am proceeding solely in quest of them”

– Christopher Columbus
Indeed, Christopher Columbus, the great Spanish conquistador echoes the sentiment of the explorers – to amass untold wealth and carry it back to their country. Source: izquotes.com

8)

“Everything has its limit – iron ore cannot be educated into gold”

– Mark Twain
Mark Twain, the great American novelist reminds us that people can be educated and empowered, but everyone’s own innate ability has limitations. Beyond that limit, no amount of empowerment is beneficial, in the same way, that alchemists failed to turn base metals into gold, although they tried for centuries. Source: Setquotes.com

Watch our video now – Gold & silver investment jargon explained

 

9)

“Praise, like gold and diamonds, owes its value only to its scarcity”

– Samuel Johnson
Samuel Johnson was an English writer and a poet. The writer compares praise to precious metals and concludes that praise when showered frequently, loses its value. It is valuable only when scarce, just like gold and silver. Source: quodid.com

10)

“The most pitiful among men is he who turns his dreams into silver and gold”

– Kahlil Gibran
Gibran, the award-winning Lebanese-American author speaks about the futility of chasing riches for a lifetime, instead of enriching themselves. Source: wishafriend.com

11)

“Brass shines as fair to the ignorant as gold to the goldsmiths”

– Elizabeth I
The Tudor queen, Elizabeth I, daughter of Henry VIII ruled England from 1558 – 1603. This period was known as the Elizabethan era and the country prospered greatly. She was a visionary and successful ruler and is quoted frequently. Here she implies that things that have no value seem otherwise to ignorant people, in the same way, that a seasoned goldsmith recognises gold instantly. Source: quotes.yourdictionary.com

12)

“Commodities such as gold and silver have a world market that transcends national borders, politics, religions, and race. A person may not like someone else’s religion, but he’ll accept his gold”

– Robert Kiyosaki
Robert Kiyosaki is an American businessman and author. He has authored 26 books, including a personal finance bestseller called ‘Rich Dad, Poor Dad’. In this great quote, Kiyosaki establishes the timelessness of gold and its appeal across the world. The universal value of gold and other precious metals are recognised by people who come from different cultures and every walk of life. Gold is of course insulated from political uncertainty as savvy investors move their investments to gold in order to escape market volatility caused by geo-political forces. Source: Goldsilver.com

13)

“The desire of gold is not for gold. It is for the means of freedom and benefit”

– Ralph Waldo Emerson
Emerson was an American lecturer, philosopher and poet who lived in the 19th century. In this visionary quote, he equates the acquisition of wealth to personal freedom and the means to pursue whatever is desired. Indeed, most gold investors invest in precious metal with this end in mind. Source: Novascotiagold.ca

14)

“The desire for gold is the most universal and deeply rooted commercial instinct of the human race”

– Gerald M. Loeb
Gerald M. Loeb was an American stockbroker and investment guru who founded E. F. Hutton & Co., a well-known Wall Street brokerage company. Forbes magazine called him ‘the most quoted man on Wall Street.’ In this quote, Loeb alludes to the human instinct of wealth accumulation, which motivates and energises everyone. Investors take every opportunity to amass wealth whenever the opportunity presents itself. Source: Marketslant.com

15)

“Gold is a treasure, and he who possesses it does all he wishes to in this world and succeeds in helping souls into paradise”

– Christopher Columbus
Christopher Columbus, the explorer believes that gold can be a solution to all desires and can empower humans to do anything in the world, including saving their souls. Gold, he believes has the power of the heavens. Of course, we must remember that Columbus had been given a task by the Spanish king – to amass wealth and return. Source: azquotes.com

Call us to find out everything you need to know about gold

At Physical Gold, we love hearing from customers just like you. We have a great team of experts who are ever willing to help you out by finding out more about your investment goals and imparting advice on how to build your investment portfolio with gold. Call us on 020 7060 9992 or contact us through our website to find out more.

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Numismatists and their passion for collectables

The practice of collecting coins, paper notes, tokens, etc. is called numismatics. Numismatists can be found all over the world, from every walk of life, and they are passionate about finding and collecting. There is an inherent thrill about digging up remnants of the past and finding a piece of history and holding it in your hand.

Owning a piece of history

Of course, many such collectors also get involved in the history of the coins they find and conduct their own research. That can be an absorbing experience in itself.  For many, it’s also about the value that the particular coins command. So, just for clarity, numismatists do not necessarily collect only gold and silver coins. For example, this coin from one Mughal emperor in India dates back to 1538 and is highly collectable, but made of the base metal, copper and not silver or gold.

Again, many numismatists as well as people who aren’t numismatists also collect gold and silver coins for their value. Some collect coins as bullion, as an investment in precious metals. Others purchase historic or collectable coins that are greater in value than their just their price in gold or silver, This is due to the fact that these collectable coins enjoy great demand from collectors and their market value is decided by the price that collectors are willing to pay for them. In this article, we’ll look at 20 highly collectable coins that are not just collectable, but also a great investment.

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1)     The flowing hair dollar, USA, 1794

This was the first dollar ever issued by the US federal government as a coin, post the war of independence. The coins were originally minted in 1794 and 1795 and made of silver. The silver dollar from 1794 is one of the rarest and most valued. The coin fetched $10.01mn at an auction in 2013.

2)     The gold double eagle, USA, 1933

The double eagle is a 20 dollar coin, which is otherwise known as the St. Gauden’s Double Eagle. These were minted in 1933, just before World War II. However, they were never released and ordered to be melted down. Interestingly, 20 survived and were eventually picked up by collectors, however, the US government spared no effort in recovering them and nine were taken back and melted. Most of the remaining ones are held by the US government and only one is privately held, which was purchased in 2002 for $7.59mn.

3)     Brasher doubloon, USA, 1787

The Brasher Doubloon is a 22 karat gold coin minted by Ephraim Brasher in 1787. It was a coin he minted privately along with other gold coins and copper ones when he petitioned the State of New York to mint copper coins and was denied. The doubloon that survived weighs 26.6g and was sold at an auction in 2018 for $5mn.

4)     $10 proof eagle, USA, 1804

The $10 eagle was issued by the US mint up to 1933. The Mint issued the first eagle in 1792. It was the largest of all the coin denominations, the others being the cent, the dime and the dollar. In October 2007, a $10 gold eagle sold for $5mn.

5)     Liberty head nickel, USA, 1913

The liberty head nickel, a 5 cent coin, was produced in very small quantities, which was unauthorized by the US mint at the time. This makes it one of the most coveted coins for numismatists. Only 5 of these exist now and in 2010, one of them fetched $3.7mn at an auction.

6)     The bust dollar, USA, 1804

Another name for this dollar dated 1804, which was struck post-1830 is the Bowed Liberty Dollar. There are only 15 in existence, and it is a very sought after coin. One of these coins sold for $4.1mn in 1999.

7)     The birch cent, USA, 1792

The 1792 cent is an important part of US history. In 2015, this coin sold for $2.5mn at an auction. An engraving of liberty is visible on the front of the coin.

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8)     The quarter eagle, USA, 1808

The quarter eagle was born during the coinage act of 1792 in the US. Its value was 250 cents or two and a half dollars. Few were struck and the ones from the early 1800s are quite rare. In 2015 a quarter eagle sold for $2.35mn.

9)     The rolled edge eagle, USA, 1907

The rolled edge 10 dollar American eagle weighs 16.70 grams and is made of pure gold. Only 42 were minted and in 2011, one was auctioned at $2.1mn.

10)     Polish 100 ducats, Polish-Lithuanian Commonwealth, 1621

The 100 ducat coins were minted by the then ruler of the Polish-Lithuanian Commonwealth to commemorate his victory over the Turkish Ottoman invasion at the battle of Chocim. On the obverse is the head of the king in full regalia. It is the most expensive Polish coin ever minted and recently in 2018, it fetched a price of $2.1mn.

11)     Barber dime, USA, 1894

The Barber Dime gets its name from the Barber coinage where it was produced. Only 24 were made and 9 have survived till date. It is one of the rarest US coins for numismatists and in 2016, one sold for $1.9mn.

12)     Ummayad Dinar, Ummayad Caliphate, 723 A.D.

The Ummayad Dinar is a coin issued by the Ummayad Caliphate, to commemorate the occasion of the Caliph leading a pilgrimage to Mecca. It is a very rare Islamic coin and in April 2011 one was sold at $6.02mn.

13)     Edward III Florin, Great Britain, 1343

The English king, Edward III attempted to establish

a coinage for Europe in the 1300s and coined a gold coin. The continental florin weighed only 3.5g of pure gold and was rejected by merchants and subsequently withdrawn. In 2006, a buyer paid $680,000 for one of the three surviving coins.

14)     Pattern Disme, USA, 1792

The 1792 Half Disme pattern coin is thought to be the first coin struck by the US Mint. Around 200 of these survive to date. In 2014, one of the coins commanded a price of $528,750.

15)     Gold 2000 Yuan, China, 1992

The China mint struck pairs of 1 kg pure gold coins, one with a seismograph design and the other a compass. The coins have been certified by NGC. Only 10 were minted and in 2011 one was sold at a record $1.29mn.

16)     Confederate half dollar, USA, 1861

There are only four Confederate Half Dollars struck at the New Orleans Mint during the civil war. An NGC certified half dollar recently realised a price of $960,000 at an auction in 2017.

17)     Five dollars small eagle, USA, 1795

The small eagle five dollar coin was the first gold coin introduced in 1795. The coin weighs 8.75 grams in pure gold and fetched a price of $586,500 in 2008.

18)     Eagle on globe quarter dollar, USA, 1792

The eagle on globe quarter dollar was struck in copper by the US mint, and not with precious metals. However, the coin, which dates back to 1792, is an important part of American coinage history. In 2015, a job lot of a dozen coins sold for $2.2mn.

19)     Lavriller pattern penny, Great Britain, 1933

By far the most expensive copper coin in the world, only four of these George V pennies were coined in 1933. In 2016, one of these coins sold for £72,000 at an auction by A.H. Baldwin and Sons.

20)   Edward VIII gold proof sovereign, Great Britain, 1937

The Edward VIII gold sovereign is the most expensive coin to be coined by the Royal Mint. Due to the abdication of the King in under a year, the coin was never introduced for circulation. In 2014, the sovereign sold for a record £516,000.

Call us to know more about the best coin investments

At Physical Gold, our numismatics experts can impart valuable advice on investing in coins that are worth more than their weight in gold or silver. Call us on 020 7060 9992 or contact us via email to get in touch and find out more.

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Why invest in gold?

We find “why invest in gold?” is one of the most frequently asked questions we receive. Apart from the fact that investments in gold make perfect sense during financial crises, it’s also a much sought-after asset class for creating a wealth-building portfolio. But how much gold should an investor’s portfolio have? In a report published by the World Gold Council, $7.5 trillion is the total value of all the gold mined on the planet so far.

This is approximately 4% of the total valuation of the international markets, spanning equity, bonds, stocks and precious metals. So, a great starting point is to have 4% gold in your overall portfolio to begin with. Of course, investors tend to step up their gold investments as time goes by if they believe that gold is likely to outperform over a certain length of time. For example, August 2011 was one such time when gold peaked at over $1990 per troy ounce.  At the time, many investors pulled out of the global capital markets and moved their investments into gold.

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5 ways you can benefit from long term gold investments

Apart from the steady rise in gold prices over the years, there are several more reasons why you should build a gold legacy that can benefit your descendants, to whom you can bequeath your estate.

1. Firstly, gold is a hard tangible asset that does not tarnish, diminish and or devalue over the years. Given that gold has continually appreciated in value, buying now can mean that your investments bear fruit in the later years of your life.
2. Many investors do not prefer to hold physical gold and instead invest in gold futures, or gold ETFs. However, we must remember that these investment vehicles carry counterparty risk. Counterparty risk is the risk posed by a counterparty. For example, if you buy gold backed paper ETFs, the company issuing the paper purchases certain amounts of gold to back your paper certificate. However, the company also sells similar investment vehicles to other investors. What is there isn’t enough gold to back the paper in the event of a market crash? Then you run the risk of losing your money. On the other hand, if you hold gold in its physical state, you avoid this risk altogether.
3. Gold is an excellent choice of asset class that can serve as ballast to form a strong and unshakable base for your diversified portfolio. What’s more, they are tax-free.
4. Fiat money, stocks and bonds are all subject to the forces of inflation, while gold is not in the short term. Over the longer term, gold is also subject to inflationary forces. However, we must remember that gold delivers value in the long-term. This is why it’s such a great long term investment.
5. Building a gold portfolio is easy. Why not register for a free account on Physical Gold, select the gold you need and add it to your online shopping cart. You will find three types of gold that are available on the website. You can get a monthly saver account and invest into this through a SIPP. There is a Pension Gold option that you can explore or simply buy gold coins and bars and opt for our secure delivery and storage option.

Buying gold coins as part of your legacy portfolio

Gold coins also make a great investment and they are stylish, sleek and can be stored as bullion over generations. Physical gold has excellent purchase options in the 1oz Gold Britannia coins, 1oz Canadian Maple Leaf coins and the 1oz Gold Krugerrand. Every product carries an authenticity certificate and a buyback guarantee. If you choose to store your wealth in one of our LBMA approved vaults, we will send you a storage agreement along with legal documents that establishes you as the rightful owner of the assets. When you give them away to your children or grandchildren, you simply transfer the rights, without having to take delivery.

Speak to our investment experts to discuss how to build a lasting portfolio

Our team of gold investment experts are always happy to advise you on what products to buy and when to buy them. Call us on 020 7060 9992 or contact us through our website to speak to our gold investment team, who can help you plan for your long-term investment goals.

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The Future for gold

Gold 2048 brings together industry-leading experts from across the globe to analyse how the gold market is set to evolve in the next 30 years.

Download the report

Key insights from authors such as George Magnus, senior economist; Rick Lacaille, Global Chief Investment Officer of State Street Global Advisors; and Michelle Ash, Chief Innovation Officer at Barrick Gold include:

• The expanding middle class in China and India, combined with broader economic growth, will have a significant impact on gold demand.
• Use of gold across energy, healthcare and technology is changing rapidly. Gold’s position as a material of choice is expected to continue and evolve over the coming decades.
• Mobile apps for gold investment, which allow individuals to buy, sell, invest and gift gold will develop rapidly in India and China.
• Environmental, social and governance issues will play an increasing role in re-shaping mining production methods.
• The gold mining industry will have to grapple with the challenge of producing similar levels of gold over the next 30 years to match the volume it has historically delivered.

To read the full 51-page white paper click below

Download the report

Trading gold and silver

The proliferation of the internet has made it possible for all of us to buy and sell precious metals from the comfort of the bedroom without having to step out and go to a high street retailer. Simple as this may sound, it has changed the rules of the game for both buyer and seller. Large volumes of precious metals are now traded everyday online. The phenomenon has reached as far as India. The country is one of the largest consumers of gold in the world, with the World Gold Council estimating Indian gold demand to be as high as 800 tonnes is 2018. Upon entering the digital gold market, one Indian retailer alone reported sales of $18.4mn, which is only a small fraction of the country’s insatiable demand.

How about the UK?

Meanwhile, in the UK, total gold imports in 2017 was 851 tonnes, most of which was headed for specialist bullion bar vaults in London. In fact, it was reported in October 2017 that 7,827 tonnes of gold in the form of gold bars are held in the London vaults in the custody of special custodian companies whose chief expertise is in the handling of bullion.

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A bulk of this gold comes from online traders who store gold in safe custody on behalf of clients who purchased their assets but opted to leave these in storage with the company. Indeed, this is one of the trends that has changed since online trading in gold gained popularity.

Online reputation management

It’s not just the delivery and storage factor that has changed with the rise of online trading. The currency of online trading is reputation. The internet lends anonymity to traders. When it comes to valuable assets like gold, silver, platinum, etc., buyers need to be certain about who they’re dealing with. Simply having a glitzy website, a phone number and a shared office address is not enough to offer customers the confidence they need. In fact, online reputation management is an important game today. Previously, in the days of brick and mortar high street retailers, reputation was built by word of mouth. Satisfied customers simply recommended a business to people they knew.

But things have changed…

Well, it isn’t that simple any longer. As a successful online trader of precious metals, customers come from everywhere and aren’t necessarily connected with each other in any way. Additionally, with visible online ratings for every seller, any customer can view ratings before making a decision to buy. Therefore, it’s important to ensure that every sale leads to a great customer experience. It’s also important to communicate with them after the sale to remind them to leave a good review on the website. This then becomes ammunition for marketing. As more and more reviews pour in, you can rest assured that more customers are going to walk in through the door. Although this kind of online marketing is usually popular among retail stores, it is now prevalent in the world of online trading for precious metals.

Social media marketing

Several online retailers have listed themselves on popular social media pages. Interestingly, Facebook does not allow the sale of bullion. So, online traders use the site to maintain a presence and divert traffic onto their websites. Other popular social media sites where one can buy or sell precious metals include Etsy and Instagram. It is interesting to note that several online players have turned to Instagram as a form of online showcase. The site is great for posting images of precious metal products, be it jewellery, bars, coins, etc. Sure enough, these products are visually attractive and several customers are tempted to get in touch with the online trader to find out more. Facebook also has certain private groups for online traders of precious metals.

Data security

Yet another big change that has entered the world of online trading in precious metals is the security of client data and their financial details. Businesses that deal with items of value like precious metals are more likely to be hit by hackers. Simply having watertight encryption and 3D secure systems when handling customer data is not enough, it is important that customers know that the online trader is using these methods so that they feel safe and secure.

Handling confidential customer data

In keeping with data protection laws, online retailers of precious metals are expected to store customer data safely. Now, additional steps need to be taken by all online traders as the new

General Data Protection Regulation (GDPR), will kick in from 25^th May, 2018 across the EU. Under the new privacy act, EU customers are expected to be able to exercise greater control over how companies process and store their personal details. This covers all personal and financial details, as well as IP addresses of computers they use and log in to. Companies need to put in place extra efforts, systems and processes in order to comply with the new directive.

Advantages of buying precious metals online

The internet has changed the business models for many products and services and the precious metals trade is no exception. Standalone brick and mortar stores had limited inventory and limited options for customers in their stores. This was largely due to space constraints in their stores or warehouses. The internet changed all that. Large online traders like Physical Gold are now connected to big ticket manufacturers across the world. They are able to source products at rock bottom prices, due to economies of scale and pass on these price benefits to customers, making them highly competitive. The choice of products is huge and once customers place an order, the company is able to source them very quickly and deliver.

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Another change is the way these items of value are collected by the customer. In the past, one had to go down to a high street store and take delivery. Needless to say, this places the buyer in a risky situation. These stores are frequently watched and targeted by criminals and one can be followed home, or even robbed on the way back. If the gold or silver is stored at home, this could increase the probability of the house being burgled. As discussed earlier, customers are frequently opting to have their precious purchases stored at a secure location. For example, when you buy gold or silver from Physical Gold, each item comes with a buyback guarantee, certificate of authenticity and a legal agreement of storage to prove ownership of the assets. The company stores precious metals on behalf of their customers in LBMA approved vaults. Of course, if the buyer wants to take delivery at their address, this is despatched via secured and insured delivery. There are also popular accessories available for customers to be able to keep their valuables safely in their own homes.

The authenticity of the trader

It is also important to check whether the online trader is a registered, bona fide company. A quick check on the companies’ house website should quickly reveal the company details. Another source where company credentials can be checked is the British Numismatic Trade Association (BNTA). If the online trader is genuine, the firm will be registered with the BNTA.

Talk to our team of experts to buy gold online

Physical Gold is proud to be a reputed online trader, serving customers over the years. Our team of experts are always keen on helping customers make the right decision when purchasing precious metals online. If you have any queries or concerns about buying gold or silver online, please speak to our team by dialling 020 7060 9992 or get in touch online. Whether you’re new to buying precious metals, or a seasoned investor, our investment team has all the information you require to make a sound decision.

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Gold-backed ETFs had their strongest inflows since early 2017

Global gold-backed ETFs holdings added 72.2 tonnes(t) to 2,481t in April. This is the strongest month of net inflows in more than a year. Growth in global holdings was led by significant North American and European inflows and supported by a small increase in Asia.

Our analysis of gold-backed ETFs and similar products provide detailed information and insights on global trends in gold investment demand.

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Regional flows

• North American and European funds saw solid net inflows in April, growing by 44t (US$1.9bn, 3.4%) and 27t (US$1.2bn, 2.8%), respectively
• Total fund holdings in Asia rose by 2.4t (US$100mn, 3.0%) to 80.2t
• Funds in other regions had a marginal loss of 1t or 3.0% of assets.

 

 

 

 

 

 

 

 

 

 

 

 

Individual flows

• SDPR® Gold Shares and iShares Gold Trust took the lion’s share of North American inflows, increasing 25.1t (US$1.1bn, 3%) and 17.1t (US$700mn, 6.4%) during the month
• Inflows in Europe were led by Xtrackers Physical Gold (7.9t, 34.2%), Invesco Physical Gold (6.2t, 5.5%), Xetra-Gold (6.2t, 3.1%) and ETFS EUR Daily Hedged Physical Gold (5t, 107.4%)
• Huaan Yifu Gold ETF was the only Asian fund to break into the top 15 inflows, as it added (1.7t, 10.5%).

Year-to-date trends

• North American funds continue to account for the overwhelming majority (54%) of gross global inflows, led by iShares Gold Trust (45t, US$1.9bn), SDPR® Gold Shares (33.7t, US$1.5bn). Elsewhere, Xtrackers Physical Gold (15.6t, US$0.7bn) and Bosera Gold (11.7t, US$0.5bn) have also captured significant flows
• Holdings in Asian gold-backed ETFs remained in the red, down 1.4t so far this year – this has been primarily the result of Bosera migrating assets from its non-listed to its listed fund
• Despite seeing little movement in assets during Q1 2018 (-1t, US$0.2bn), European holdings are now comfortably up since the end of December mostly as a result of 26t of inflows in April.

 

23 April 2018

Investors often use the direction of the US dollar as a bellwether for gold’s performance. However, over recent years, short-term movements in gold have been more heavily influenced by US interest rates and expectations of policy normalisation. Our analysis shows that the correlation between gold and US rates is waning and that the US dollar is again a stronger indicator of the direction of price. And, in our view, this will continue over the coming months – even while the dollar won’t explain gold’s movements entirely. Furthermore, the analysis shows that higher real rates have not always resulted in negative gold returns.

Linking gold, the US dollar and interest rates

There is no one single driver of the price of gold. Generally, gold’s price drivers can be grouped into four categories:

1) wealth and economic expansion; 2) market risk and uncertainty; 3) opportunity cost, and 4) momentum and positioning (see page 3).

Table 1: The influence of US rates on gold has fallen behind that of the dollar

Correlations between gold, the US dollar, and various interest rate benchmarks*

 

In the short and medium term, two variables attract investors’ attention most: the US dollar and interest rates. Historically, gold has had a consistently negative correlation to the US dollar (Chart 1). Gold’s relationship with the dollar is determined by US-based gold supply and demand, as well as by the status of the dollar as the reserve currency globally (Gold and currencies, Gold Investor, October 2013). And while the US dollar is often a good bellwether of gold’s price performance, in recent years, gold has seemingly reacted more to the behaviour of US rates.

Yet, gold continues to trend higher – increasing by 8.5% since the Federal Reserve rate hike in December 2017 – despite interest rates rising at an accelerated pace. A key question for investors is, therefore, what matters more – the direction of the US dollar or the direction of interest rates? The answer is, generally, the US dollar. But there are exceptions to this rule.

Chart 1: There is a consistently negative correlation between gold and the US dollar

Correlation between gold (US$/oz) and the US dollar real exchange rate*

As with any investment, there is a certain amount of risk to negotiate when investing in gold or silver. Here at Physical Gold we have many years of industry experience and can help you make an informed decision when purchasing precious metals. Here are some of our top tips for mitigating some of the risks involved in purchasing gold and silver:

Buy from a trusted dealer

When purchasing gold and silver in any form, whether it’s jewellery, bars or coins, it is always important to make sure you do so through a trusted dealer. There’s a huge amount of counterfeit goods out there, particularly online, so it’s always important to go to a recognised dealer and do some research on them beforehand. You also need to be aware of any hidden fees and costs when purchasing gold and silver as a lot of dealers advertise really low prices but then charge extortionate prices for handling, shipping costs etc. We’re members of various trade associations, including the BNTA and British Numismatic Society.

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Understand the pros and cons of investing in different forms of gold & silver

People invest in many different types of gold and silver. Whether it’s coins, bars or jewellery, it is always important to understand your requirements and what the best options are for you. For example, many people like to invest in bullion coins because they are easily stored and have a guaranteed purity. They are also fairly liquid should you need to raise money quickly. Some forms of gold and silver, including legal tender bullion coins such as Britannia’s and Sovereigns, also come with added tax benefits and are capital gains tax-free, making them an ideal purchase for many investors.

Do some background research

If you’re thinking about investing in gold or silver, then you should always make sure you do your research first. Have a look at look at futures tables and forecasts to make sure you get a picture of how the market is shaping up and consult with an expert if you’re unsure about anything. It is also worth checking the current spot price of gold and silver as this will give you a basic idea of what people are paying.

Think about different storage options

Before investing in any form of gold and silver, it is important to think about how you are going to store the goods. If you’re planning to store your goods at home for ease of access, then you will want to think about how this may affect your insurance and whether you have a suitable and safe place to store your gold or silver. You also need to be careful about who you divulge any info to regarding where the goods are secured as you don’t want them to be stolen.

If you’re purchasing gold and silver purely as an investment, then you might want to consider whether it’s worth storing it in an allocated vault. The cost of transporting gold and silver as well as insuring the content is often very expensive. You can save considerable costs by keeping your goods stored in a secure vault and it will also give you complete peace of mind that your items are safe and protected.

Contact Physical Gold for further advice

Physical Gold are expert brokers in gold and silver and will reduce your risks when buying precious metals. If you require any advice or additional information on how to invest in precious metals, then please give us a call on 020 7060 9992.

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Before investing in any physical commodity, whether it’s gold, silver or any other precious metal, it is always worth carrying out your own research beforehand. The internet is a great source of information and can tell you everything you need to know about beating the spread, spot prices and future price forecasts. If you’re looking for further information, iTunes is also a great place to check out. There is a great range of podcasts available giving you expert tips and advice. Best of all they are completely free.  Here are 7 of the best podcasts currently available on iTunes.

Precious Metals Market Update

This Podcast is sadly no longer releasing new episodes however with over 100 episodes already amassed, it can provide you with a comprehensive overview of the gold and silver market. With expert advice from precious metals expert Tom Cloud, the podcast covers everything from global issues affecting the gold and silver price, storage advice and how gold and silver ratios can affect investors. Click here https://podcasts.apple.com/us/podcast/precious-metals-market-update/id903415429.

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Silver Doctors

The doc has been dishing out his expert advice on finance and economics for over a year and has so far released 100 episodes of his popular podcast in which he seeks to educate people on the benefits of investing in gold and silver. The podcast features a number of guests and experts each week who together address many important issues affecting gold and silver investments. Highlights include an interview with David Morgan of “The Morgan Report” who gives his predictions for the gold and silver market in 2018. Click here.

The Morgan Report

The Morgan Report is a vehicle for esteemed precious metals analyst David Morgan’s to talk about his perspectives and opinions on the precious metal market. Each week he gives his weekly perspective on the current state of the economy and how this could affect gold and silver investments. His podcasts are around 20 mins long and are perfect listening material when you’re on your lunch break at work or find yourself with a spare half an hour. Click here.

Money Metals’ Weekly Market Wrap on iTunes

The granddaddy of all precious metals podcasts, Money Metals’ weekly wrap has been running since 2014 and in that time, they’ve released nearly 200 episodes of their popular podcast. Each episode clocks in at around 30 mins and focuses on how current affairs in the US are affecting the precious metal market. Industry experts including renowned precious metals expert Tom Cloud are also regularly invited onto the show. Click here.

“Gold & silver investment jargon explained” – a YouTube video we have published.

SchiffGold Friday Gold Wrap Podcast

A relatively new up and coming podcast released each Friday by US precious metal dealers SchiffGold. This quick and handy 10-minute podcast is a perfect soundbite and summary of the week’s precious metal news including some thoughtful commentary and opinions from the company themselves. Click here.

Precious Metals Investing

A short but informative podcast (some episodes are only 5 min long) that provides tips & advice on investing in the precious metals market. The podcast features Ted Sudol from PreciousMetalsInvesting.org and a weekly guest expert. Highlight episodes include “Gold futures – reading the charts” and “Bitcoin and Gold”.  Click here.

The Daily Gold Podcast

A fascinating podcast hosted by Jordan Roy-Byrne,

editor and publisher of TheDailyGold.com and TheDailyGold Premium. This Podcast features regular guests from the gold industry and expert insight into where the gold industry is headed. Highlight episodes include an interview with Greg Weldon, one of the world’s premier independent macro analysts, who gives his opinions on the current state of the gold market and an update from gold exploration company Novo Resources. Click here.

Visit Physical Gold for more information

Physical Gold is one of the UK’s leading specialists in gold and silver investments. If you’ve been inspired by any of the podcasts mentioned in this article, you can find out more information on how to invest in gold and silver by checking out our website. You can also speak to one of our experts by giving us a call on 020 7060 9992.

Stories about Bitcoin and the future of cryptocurrencies are dominating the news headlines right now. Over the last few years, the concept of digital currency has entered the mainstream and it seems like everyone you meet has a different opinion. Since bitcoin became the first decentralised cryptocurrency in 2009, its market value has gone through the roof. Many banks globally now accept Bitcoin for payments, as do a growing number of retailers.

Will the bitcoin bubble burst eventually?

The question is will the Bitcoin bubble ever burst like people are suggesting? Or will other up and coming cryptocurrencies such as Ethereum become the new norm? We set out to find how digital currencies compare against more tangible physical currency such as gold and silver.

 

Advantages of cryptocurrencies

Cryptocurrencies certainly have a lot going for them. For one, they are currently unregulated by many governments, affording people a certain level of privacy they don’t get from regulated currencies. If you want to keep your finances away from prying eyes, then cryptocurrencies are an ideal solution.

Taking control…

They also provide customers with a greater degree of control over their finances as no financial institution or company can take control of your assets. If you use PayPal or any other electronic cash system, then that company have the power to freeze your assets at any time they want should they decide your account has been misused for any reason. With currencies like Bitcoin, you have complete control of your wallet and any coins you have stored in it.

Another major benefit of Cryptocurrencies is that transactions are generally much harder to hack than other forms of online payment. This is because they use blockchain technology which is designed to discourage fraudulent activity. It is impossible to change or alter the encryption in one block without having to change every block that has been before it or come after.

Doubts and concerns about cryptocurrencies

So why do many people still have doubts about cryptocurrency? Well, the obvious problem is what happens if the user encounters some sort of problem with the technology. Digital currency isn’t tangible in the same way that gold and silver are, making it much harder to insure and if accidentally lost or stolen then it is very hard to recover your coins. There have been many instances where people’s hard-drives have crashed resulting in them losing their coins and having nothing to show for it. Transactions are also currently expensive in Bitcoin as well as the current speed of transactions being relatively slow.

An uncertain future

With technology improving every day, it is impossible to predict where we will be in the next few years and there is nothing to guarantee that cryptocurrencies won’t be replaced by something else. Gold and silver will always have a material value and have proven to be an excellent store of wealth for thousands of years. If there was ever to be a worldwide digital crash, then cryptocurrencies would be essentially worthless.

There are also a lot of people investing in cryptocurrencies that don’t completely understand what they are investing in, which is why many experts believe the market is headed for a crash. Evidence of the markets unpredictability can be seen clearly in the huge rises and drops in the value of Bitcoin over the last few years. Although gold and silver prices fluctuate they generally tend to be a lot more stable than cryptocurrencies.

Gold and silver – ever dependable investments

People have always tended to gravitate towards gold and silver investments as an insurance against market uncertainty and a potential crisis. This is unlikely to change anytime soon. Many people still see gold and silver as the best form of protection against inflation and often purchase it as a hedge. Evidence of this can be seen in investors reaction to recent global events such as Brexit and the announcement of Trump as president when the demand for gold and silver suddenly went up overnight. In the event of a crisis, it will be much harder to get your hands on physical cash and cryptocurrency is still not readily accepted by many vendors. Therefore, it makes sense to invest at least some of your money in physical assets that are fairly liquid such as gold and silver. The fact that gold and silver are considered scarce and finite resources also mean that there will always be plenty of demand for these types of assets.

Invest in physical assets through Physical Gold

Physical Gold are specialist dealers in gold and silver. We offer a wide range of investments including gold or silver bars, bullion coins and collector’s coins. For more information on any of our stock or advice on how to invest in precious metals, why not give us a call on 020 7060 9992 or visit our contact page?

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