January 26, 2021 (Investorideas.com Newswire) When the exchange rate fluctuates and the price of real estate does not rise, many people try to invest in gold to not only save, but also to increase their savings. There are several ways to buy gold. Let's look at the most affordable ones.
Many people associate the word 'gold' with jewellery. Buying gold rings or earrings is the easiest way to invest in gold. There's not much to say about how to do it. You can buy jewellery in a shop and then store it either at home or in a safe deposit box. But when you buy gold, you should always think ahead about how to sell it.
When you need money, the gold will probably have to go to a pawnshop, getting maybe half of its value or more. So, before giving up your last bit of money for a pair of gold earrings, in the hope of saving against inflation in this way, you should think twice.
How to buy gold bullion
Who hasn't dreamed of holding a real bar of gold in their hands? It's not only possible in the movies. Gold bars are sold by banks. Buying gold bars is one way of investing money for the long term. In addition to gold, you can also buy silver, platinum and palladium bars from banks.
Such investment in precious metals is considered to be one of the safest ways of saving. Gold, platinum, palladium and silver bars have high liquidity and with growth of the world prices for precious metals such investment can bring additional income.
Precious metal ingots can be stored at home, which of course is dangerous, because they can be stolen. For safer storage, banks offer clients the service of storing bullion in a bank vault or in an individual safe deposit box rented from the bank.
How much is a gold bar worth? Determining a certain price is rather difficult, because the banks purchase or sell the precious metal at their own quotations, which are determined several times a day, proceeding from a number of parameters: the main among them is the price of the precious metal at the international market.
Where to sell the gold bars? The answer to this question is very simple - you may as well give it back to the bank! It is advisable to keep the bullion in perfect condition, and be sure to have the manufacturer's certificate for it. If you sell the bullion in the bank, you will also be required to present proof of identity.
How profitable is it to invest in gold bullion? Banks buy precious metal bars at the respective quotations on the date of the transaction. The benefit depends on the market situation.
How to invest in gold by opening an unallocated metal account
You don't have to buy bars and coins to invest your savings in precious metals. There is another, less bothersome option - opening an unallocated metal account.
An unallocated metal account (UMA) is a bank deposit, which is different in that its valuation is based on the current value of precious metals. The depositor does not become the real owner of the metal in its physical equivalent, but buys the precious metal at the bank's exchange rate at the time of the transaction, which is calculated in grams on the account balance. Funds of the depositor are not accounted for in the currency - roubles, dollars or euros - but in grams of precious metal (gold, silver, platinum, palladium). Transactions with the depersonalised metal are not subject to VAT. This tax will have to be paid if the depositor decides to receive the precious metal in bars.
Is it profitable to open unallocated metal accounts? It's up to the depositors to decide. By playing on the quotations of precious metals, the holder of an UMA may earn income just like when playing on the stock market. If the price of gold or platinum goes up, the depositor's savings in the UMA will increase. However, if the quotation of the precious metal went down, then the depositor's money on the unallocated metal account will melt away in accordance with the exchange rate.
How to earn on gold futures
Buying gold futures may be a profitable way to invest in gold. Anyone who signs a brokerage agreement with any brokerage company may get access to operations on the exchange.
Simply put, a gold futures contract is a contract with an obligation to buy gold at a fixed price after a certain period of time. Let's say an investor buys a gold futures contract with a term of three months. If gold rose in value at the expiration date, the investor makes a profit. The profit is transferred to the account of the future owner, i.e. the difference between the price specified in the contract and the price on the London Stock Exchange upon the expiration of the contract.
Of course, the price of gold may not increase or even decrease during this time. Then the futures holder's account will be debited with the price difference.
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