Allocated Gold or Unallocated Gold – That is the Question
What is the difference between allocated and unallocated gold? Why should there BE a difference? And what benefits are there for the gold investor when it comes to the security of allocated and unallocated gold accounts?
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Firstly let us look at how the allocated and unallocated system works.
Allocated Gold Account
An Allocated gold account means that the gold is owned outright by the investor or account holder. Usually this will be in a size comparative to the holding of the investor. It might be small bars and coins for a small investor but large 400 ounce gold bullion bars for a large investor. The account holder pays a storage and sometimes an insurance fee.
Most importantly the holdings are secured against the account holders name and the serial numbers or other identification is registered to that account holder. The account holder can redeem, or take out, the gold he has in their name at any time and have it shipped else where.
It should be noted that gold exchange traded funds do NOT include allocated gold.
Unallocated Gold Account
Unallocated gold accounts are an entirely different story. Here the account holder does not own specific physical gold but only a value 'backed' by gold kept in storage by the bank or company, such as GLD for example, who hold the gold 'in trust'.
This is the exchange traded funds at work. The gold is not secured to any gold account and there is no guarantee of ownership of any gold. In fact the LBMA description of unallocated gold disturbingly points out:
It also states "The client is an unsecured creditor." Which is somewhat contradictory to the previous statement. Whereas the client who has an allocated gold account can point to some gold and say, "This is mine!" The unallocated gold account owner can only say they have lent money, at cost mind you since they have to pay for the privilege, to the institution who promise that those funds are backed by gold and the price is index-linked to gold. But the resemblance to owning gold stops there. You cannot redeem unallocated gold since you do not actually own any of the gold in the first place.
The institution may or may not have sufficient gold to cover the total value of all unallocated gold accounts and even if they do, they are also not bound to NOT use that gold elsewhere for another purpose, neither do they assume any responsibility for the safe deposit or storage done by a third party on their behalf.
This enters into the fractional system of using Paul to pay Peter. A common pastime of banks in general.
Conclusion
Our recommendation, if you want to have or own or hold actual gold, is to buy gold, and not a representation of it. Buy physical gold and have it stored. You can buy small bullion bars or large one depending on your own personal financial situation and one can buy on a regular basis to build up a gold store. But certainly we do not recommend you buy unallocated gold as, really, you are only buying a piece of paper that says your account is worth the same as the futures gold price. Not actually goldhttps://sites.google.com/site/goldandsilver2012/how-to-buy-gold/zz
GO TO https://sites.google.com/site/goldandsilver2012/how-to-buy-gold/zz
Firstly let us look at how the allocated and unallocated system works.
Allocated Gold Account
An Allocated gold account means that the gold is owned outright by the investor or account holder. Usually this will be in a size comparative to the holding of the investor. It might be small bars and coins for a small investor but large 400 ounce gold bullion bars for a large investor. The account holder pays a storage and sometimes an insurance fee.
Most importantly the holdings are secured against the account holders name and the serial numbers or other identification is registered to that account holder. The account holder can redeem, or take out, the gold he has in their name at any time and have it shipped else where.
It should be noted that gold exchange traded funds do NOT include allocated gold.
Unallocated Gold Account
Unallocated gold accounts are an entirely different story. Here the account holder does not own specific physical gold but only a value 'backed' by gold kept in storage by the bank or company, such as GLD for example, who hold the gold 'in trust'.
This is the exchange traded funds at work. The gold is not secured to any gold account and there is no guarantee of ownership of any gold. In fact the LBMA description of unallocated gold disturbingly points out:
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"Unallocated accounts. This is an account where specific bars are not set aside and the customer has a general entitlement to the metal. It is the most convenient, cheapest, and most commonly used method of holding metal. The units of these accounts are one fine ounce of gold and one ounce of silver based upon a .995 LGD (London Good Delivery) gold bar and a .999 fine LGD silver bar respectively."
It also states "The client is an unsecured creditor." Which is somewhat contradictory to the previous statement. Whereas the client who has an allocated gold account can point to some gold and say, "This is mine!" The unallocated gold account owner can only say they have lent money, at cost mind you since they have to pay for the privilege, to the institution who promise that those funds are backed by gold and the price is index-linked to gold. But the resemblance to owning gold stops there. You cannot redeem unallocated gold since you do not actually own any of the gold in the first place.
The institution may or may not have sufficient gold to cover the total value of all unallocated gold accounts and even if they do, they are also not bound to NOT use that gold elsewhere for another purpose, neither do they assume any responsibility for the safe deposit or storage done by a third party on their behalf.
This enters into the fractional system of using Paul to pay Peter. A common pastime of banks in general.
Conclusion
Our recommendation, if you want to have or own or hold actual gold, is to buy gold, and not a representation of it. Buy physical gold and have it stored. You can buy small bullion bars or large one depending on your own personal financial situation and one can buy on a regular basis to build up a gold store. But certainly we do not recommend you buy unallocated gold as, really, you are only buying a piece of paper that says your account is worth the same as the futures gold price. Not actually goldhttps://sites.google.com/site/goldandsilver2012/how-to-buy-gold/zz
A Gold Ponzi of Mass Deception?
A Ponzi scheme one tends to associate with back street traders of dubious reputation and an unprofessional con man out for a quick buck.
But only recently Adrian Douglas from the Gold Anti Trust Association (GATA) confirmed in testimony to the U.S. Commodity Futures Trading Commission (CFTC) that the London Bullion Market Association is operating a massive fractional reserve gold market which he refers to as a Ponzi scheme.
This has also been confirmed by Jeffry Christian of the CPM Group who noted that the London "physical market" is actually trading a hundred times more paper gold than there is physical metal to back those trades.
One might wonder how the LBMA can sell gold bullion that they do not actually have in their vaults.
This is done through the allocated and non allocated account system.
In an allocated account, an investor will have specific bars of gold specifically assigned to him and when the gold bars are purchased the investor will be given the serial numbers. That investor has full title to that gold bullion and the dealer acts as a custodian, holding the gold on behalf of the client. The LMBA describes allocated accounts as"
An allocated account is where the investor has on deposit with a financial institution specific bars of gold or silver that are segregated for him and he is given their serial numbers. This gold and silver can be audited and the customer can have confidence that his investment is safe insofar as it really exists, is being stored on his behalf, and he has title to it.
With an unallocated account, however, the situation is vastly different. The gold or silver is held by the bullion bank but not identified by serial number. So when a client buys unallocated gold they do not get allocated bars of gold. If, for example, two customers each buy 200 ounces of gold they could together be assigned one 400 ounce London Good Delivery (LGD) gold bar. So each client is not assigned a specific gold bar but a real bar is held 'on their behalf.'
The LBMA description of unallocated precious metal accounts states:
One would think, therefore, that if 20,000 unallocated account holders collectively bought 200 tonnes of gold, there would naturally BE 200 tonnes of gold resting in the vaults.
However, The LMBA definition of unallocated also goes on to state:
So, as Adrian Douglas of GATA correctly points out, "The balance on the account is a measure of "indebtedness between the two parties." In other words the account balance is an IOU for bullion. It is NOT really a "method of holding metal" as first described by the LBMA. No, the unallocated account is backed by the general stock of the bullion dealer -- and that may be, as Jeffrey Christian has confirmed, only one
physical ounce for every hundred ounces that have been sold in unallocated accounts."
Importantly, it also states that "The client is an unsecured creditor." If 10 tonnes of gold are bought for 10 clients with allocated accounts, those ten clients are secured, but if the accounts are unallocated, then they are unsecured and there is no guarantee whatsoever that there is gold to cover that clients holding. Otherwise why describe them as unsecured. This opens the door to operating a fractional-reserve basis and, while that might be acceptable for currency, it is certainly not acceptable for gold being held in trust for clients.
Unallocated accounts are not then, "the most convenient, cheapest, and most commonly used method of holding metal." Rather, they are an unsecured way of holding an IOU for gold or silver bullion. Just a paper promise.
Indeed, an unallocated account holder is really just lending money to the bank at a negative interest rate, as the customer is the one that is paying the fees for the privilege of lending the bank money. The only real connection between gold and the 'loan' is that the loans are index-linked to the price of gold bullion.
The message is then, there is nothing so secure as holding actual physical gold and if one has to have gold held for one, ensure it is an allocated account and have the attendant security that goes with that gold. You should also have the serial numbers of the bars you own so you do know you indeed actually own some gold.
But only recently Adrian Douglas from the Gold Anti Trust Association (GATA) confirmed in testimony to the U.S. Commodity Futures Trading Commission (CFTC) that the London Bullion Market Association is operating a massive fractional reserve gold market which he refers to as a Ponzi scheme.
This has also been confirmed by Jeffry Christian of the CPM Group who noted that the London "physical market" is actually trading a hundred times more paper gold than there is physical metal to back those trades.
One might wonder how the LBMA can sell gold bullion that they do not actually have in their vaults.
This is done through the allocated and non allocated account system.
In an allocated account, an investor will have specific bars of gold specifically assigned to him and when the gold bars are purchased the investor will be given the serial numbers. That investor has full title to that gold bullion and the dealer acts as a custodian, holding the gold on behalf of the client. The LMBA describes allocated accounts as"
https://sites.google.com/site/goldandsilver2012/how-to-buy-gold/zz
"These accounts are opened when a customer requires metal to be physically segregated and needs a detailed list of weights and assays. The client has full title to the metal in the account, with the dealer holding it on the client's behalf as a custodian."
An allocated account is where the investor has on deposit with a financial institution specific bars of gold or silver that are segregated for him and he is given their serial numbers. This gold and silver can be audited and the customer can have confidence that his investment is safe insofar as it really exists, is being stored on his behalf, and he has title to it.
With an unallocated account, however, the situation is vastly different. The gold or silver is held by the bullion bank but not identified by serial number. So when a client buys unallocated gold they do not get allocated bars of gold. If, for example, two customers each buy 200 ounces of gold they could together be assigned one 400 ounce London Good Delivery (LGD) gold bar. So each client is not assigned a specific gold bar but a real bar is held 'on their behalf.'
The LBMA description of unallocated precious metal accounts states:
"Unallocated accounts. This is an account where specific bars are not set aside and the customer has a general entitlement to the metal. It is the most convenient, cheapest, and most commonly used method of holding metal. The units of these accounts are one fine ounce of gold and one ounce of silver based upon a .995 LGD (London Good Delivery) gold bar and a .999 fine LGD silver bar respectively."
One would think, therefore, that if 20,000 unallocated account holders collectively bought 200 tonnes of gold, there would naturally BE 200 tonnes of gold resting in the vaults.
However, The LMBA definition of unallocated also goes on to state:
"Transactions may be settled by credits or debits to the account while the balance represents the indebtedness between the two parties."
"Credit balances on the account do not entitle the creditor to specific bars of gold or silver, but are backed by the general stock of the bullion dealer with whom the account is held. The client is an unsecured creditor."
So, as Adrian Douglas of GATA correctly points out, "The balance on the account is a measure of "indebtedness between the two parties." In other words the account balance is an IOU for bullion. It is NOT really a "method of holding metal" as first described by the LBMA. No, the unallocated account is backed by the general stock of the bullion dealer -- and that may be, as Jeffrey Christian has confirmed, only one
physical ounce for every hundred ounces that have been sold in unallocated accounts."
Importantly, it also states that "The client is an unsecured creditor." If 10 tonnes of gold are bought for 10 clients with allocated accounts, those ten clients are secured, but if the accounts are unallocated, then they are unsecured and there is no guarantee whatsoever that there is gold to cover that clients holding. Otherwise why describe them as unsecured. This opens the door to operating a fractional-reserve basis and, while that might be acceptable for currency, it is certainly not acceptable for gold being held in trust for clients.
Unallocated accounts are not then, "the most convenient, cheapest, and most commonly used method of holding metal." Rather, they are an unsecured way of holding an IOU for gold or silver bullion. Just a paper promise.
Indeed, an unallocated account holder is really just lending money to the bank at a negative interest rate, as the customer is the one that is paying the fees for the privilege of lending the bank money. The only real connection between gold and the 'loan' is that the loans are index-linked to the price of gold bullion.
The message is then, there is nothing so secure as holding actual physical gold and if one has to have gold held for one, ensure it is an allocated account and have the attendant security that goes with that gold. You should also have the serial numbers of the bars you own so you do know you indeed actually own some gold.
The Myth of the Declining Gold Price
There seems to be a myth about the demand for gold declining in the media, but in fact, nothing could be further from the truth.
The demand for gold is as high, if not higher, than ever before as witnessed by the high levels of gold price found around the world.
This myth is the result of a reporting flaw where much of the data is omitted and only one aspect of the gold part is being reported. Gold for the jewelery market has fallen recently due to the recession. For example, Saudi Arabia's jewelers have witnessed a major fall of around 30 percent in the first six months of the year. The reason provided for the fall is economic slowdown and high gold prices. However, what is not being reported is bank gold sales activity has dropped and bank buying of gold has increased putting the banks in a position of demand despite misleading media headlines.
In short, there may be a drop in gold demand for jewelery in a recession but the demand for gold as an investment increases dramatically. A recent gold ETF reported its biggest ever one day inflow of gold since its inception. This followed healthy inflows over the week prior and up eighteen percent.
The following graph gives a clear insight into the actual demand for gold.
Using one aspect of a market to make an assessment of an entire market is faulty report and rather like saying the entire meat market is slow because one butcher did not buy as much meat as usual.
The market for gold investment, and gold in industry for that matter, is still high. Gold bullion investment traditionally increases in a recessionary market and ... well try buying gold bullion from a bank in Europe or even from any gold bullion dealer and find out what the waiting time is. Currently 4 to 8 weeks as mints struggle to keep up with the demand.
in addition the myth of the declining gold price has recently been exploded by the rise of gold on a stable and steady trend to now over one thousands US dollars pe
The demand for gold is as high, if not higher, than ever before as witnessed by the high levels of gold price found around the world.
This myth is the result of a reporting flaw where much of the data is omitted and only one aspect of the gold part is being reported. Gold for the jewelery market has fallen recently due to the recession. For example, Saudi Arabia's jewelers have witnessed a major fall of around 30 percent in the first six months of the year. The reason provided for the fall is economic slowdown and high gold prices. However, what is not being reported is bank gold sales activity has dropped and bank buying of gold has increased putting the banks in a position of demand despite misleading media headlines.
In short, there may be a drop in gold demand for jewelery in a recession but the demand for gold as an investment increases dramatically. A recent gold ETF reported its biggest ever one day inflow of gold since its inception. This followed healthy inflows over the week prior and up eighteen percent.
The following graph gives a clear insight into the actual demand for gold.
Using one aspect of a market to make an assessment of an entire market is faulty report and rather like saying the entire meat market is slow because one butcher did not buy as much meat as usual.The market for gold investment, and gold in industry for that matter, is still high. Gold bullion investment traditionally increases in a recessionary market and ... well try buying gold bullion from a bank in Europe or even from any gold bullion dealer and find out what the waiting time is. Currently 4 to 8 weeks as mints struggle to keep up with the demand.
in addition the myth of the declining gold price has recently been exploded by the rise of gold on a stable and steady trend to now over one thousands US dollars pe
Tips on Buying Gold
Here are some tips on buying gold that can help you get the best gold for your money.1. Find out which is the best gold for you to buy. Usually it is gold bullion bars, or gold coins or can even be GoldMoney (more on that later). This can depend on how much money you have to allocate to buying gold and why you are buying gold. If you have sufficient funds then gold bullion bars would be the way to go. These can be as small as one or half ounce bars or as large as one kilo bars or even the 400 ounce bars although buying those sized gold bullion bars would be very rare.
2. Searching around for the best price is important as the prices can vary. The smaller amount of gold you buy, for example, means the higher cost per ounce or gram. Due to fabrication costs and other factors, a one or half ounce bar (or biscuit as it is known) can cost twice as much as the value of the gold. Yet a larger bar will have a more acceptable cost attached to the value of the gold. The price you see in the news is not the actual price of gold. It is the price of gold futures . To see the actual price of gold you have to look at what dealers are charging. You can also get a very good idea from auction sites such as eBay which will show the current value people are placing on gold. Here you would not look at what people are asking but what people are paying.
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3. When you have determined what gold you want to buy then the next question is where to buy it. Dealers tend to be the most expensive. You can get some good deals on eBay but that usually involves a lot of time and effort. Plus you have to verify the seller is selling the genuine article and not some fake of course. Practicing due diligence is very important when buying gold bullion online.
4. An alternative is to buy gold from GoldMoney. Here you can simply open an account rather as you would open a bank account. Deposit funds to GoldMoney who will then assign you gold at the prevailing price to your account. Your gold physically sits in a bank vault either in London or Zurich and you can add to it, cash it or a portion in and even, under certain circumstances redeem the gold in the form of one kilo gold bullion bars. The gold held in the vaults is regularly audited and is fully insured against the usual, theft destruction and so forth.
You can also transfer any quantity of gold to another GoldMoney account and, by the same token, have it transferred from another account to yours. You have to show proof if identity in order to open an account but once that is done you are free to accumulate gold without the issues of transport, insurance and storage as this is all taken care of. There is a small storage fee and some transfer fees but the cost of those is far below buying gold, having it shipped, stored and insured by dealer or mint. There is no minimum, you can buy a gram or an ounce at the same rate as a kilo or more as there are no fabrication and other costs to worry about. You can open an account at GoldMoney and quickly start to accumulate gold.
5. The best way to save gold is to accumulate some at regular intervals. This is regardless of the gold price. Each month or each regular period just buy some gold. The price may be up one month or down the next. It does not matter. It is the consistency that counts. The value of your gold will even out and tend to rise in the long term as the value of gold goes up against the value of currency.
So there you are, a few tips on buying gold that may help you to save and and increase your gold holding.
Buy Gold Bullion Bars
A new service offered by GoldMoney enables you to buy gold bullion bars AND take delivery at any time.What is Gold Money
GoldMoney is a service where you can buy gold, or buy silver, and have it stored on your behalf by GoldMoney in bank vaults in London or Switzerland. Now you can have the gold bullion also delivered to you in most countries a list of which is given below.
GoldMoney are located in Jersey in the British Channel Islands independent to Britain. Jersey is governed by its own laws and regulations and not subject to British Law.
Regulatory services are provided by the Jersey Financial Services Commission (JFSC), who oversee the regulation of all financial services in Jersey.
The vaults are owned and operated by The VIA MAT group who operate under the strict standards of the London Bullion Market Association. The VIA MAT group also provide the insurance and the Andium Trust Company performs the regular audit of gold to ensure that the gold bullion matches the customers accounts.
GoldMoney is registered and regulated by the JFSC as a money service business.
How does GoldMoney Work
GoldMoney currently holds, on behalf of its customers in customer account holdings, almost 700 million dollars of solid gold bullion bars in two bank vaults. One in London and the other in Zurich, Switzerland.
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Account holders simply sign up for and open an account which records their gold bullion holdings with details of when purchased, where the gold is stored and any transactions such as cashing in the gold, selling the gold and taking delivery of any gold.
You can open a free account at GoldMoney by providing your name, contact details and sufficient ID as you do with a new bank account.
Once the account is opened you simply fund the account through a bank transfer of funds and then you can buy gold bullion.
There is no wait period (other than verifying the details needed to open the account) and the account is fully private and confidential.
There is also the facility to change your gold for silver and to 'cash out' your gold if needed.
How to Buy Gold with GoldMoney
There is no minimum or maximum of gold bullion one can buy. It will depend on how much funding there is in your account. Sometimes when you want to buy gold from a dealer or bank or mint, but there is a minimum you can buy.
With GoldMoney this is not the case, making it ideal for those with smaller incomes who would like to buy gold in small amounts and build up. There are some condition relating to large quantities of gold bought at any one time. This relates to the gold spot price and buying gold at a 'locked rate'.
What are GoldMoney Gold Bars
The gold held by GoldMoney on behalf of its customers are gold bullion bars usually of the 400 troy oz. or 12.44 kg of better than 95.5 percent pure refined gold and meet the London Bullion Market Association. They originate from the following refineries:
Rand Refinery Limited (South Africa)Also GoldMoney buy gold in 1000 gram bullion bars. All GoldMoney 100 gram and kilo bars are "4 nines fine", meaning they are 99.99% pure gold. Each of these 1000 gram gold bullion bars is produced in Baird & Co.'s factory in London, UK. You can take delivery of these bars and once ordered, the gold bars can either be shipped to you by insured mail or you can arrange to pick up your bars at Baird & Co. Shipping is currently available to customers resident in the following 16 countries:
Metalor Technologies SA (Switzerland)
Argor-Heraeus SA (Switzerland)
Johnson Matthey Limited (United Kingdom)
AustriaYou can also personally deliver or ship your GoldMoney bars back to Baird & Co. in London and receive goldgrams in your Holding. The bars must be in good condition and show no signs of tampering (i.e., marks or chips that indicate some of the gold content may have been removed).
Belgium
Canada
Denmark
France
Germany
Holland
Italy
Luxembourg
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
USA
GoldMoney will charge a 2 percent fee for each returned bar. Therefore, a kilo bar return will result in a 980gg addition to your Holding. A 100 gram bar return will result in 98gg being added to your Holding.
How Much Does it Cost
Unlike buying gold from gold dealers, mints etc, the cost of buying gold from GoldMoney is appreciably less. The exchange fee to buy gold by the gram ranges from 0.98 to 2.74 percent above the prevailing spot gold price, depending upon the size of the transaction. The more gold you buy at one time the less the transaction fee proportionately.
Selling gold back to GoldMoney does not incur an exchange fee. You simply get the spot price at the moment you transfer back.
How Do You Get Your Gold Bars
Where to Start. Gold Money is the place to start. Here you can open a Gold Money account and then start funding your account to buy gold. You can then keep all the gold or some of the gold in your account and at any time take delivery of all or some of your gold in 1000 gram gold bars.
This is a very simple and easy, not to mention quick, way to buy gold bullion bars.
Indian Gold Bullion
Up until 1990 Indians were not supposed to hold Indian gold bullion privately due to the Gold Control Act. So most gold investment was in gold jewelery up to then although, of course, there was some limited smuggling of ten tola gold bars. These days, gold bullion is the second most preferred investment vehicle for Indians after bank deposits and for traditional families, probably the first.After 1990 the increase of Indian gold bullion in the form of small bars, both imported and local, increased significantly to where India now consumes around 800 tonnes of gold a year. This is around 20 percent of the global demand in gold.
In the 1999/2000 budget the Indian government announced a new initiative to tap some of the private gold being held in India, by allowing the commercial banks to take deposits of gold bars, gold coins and gold jewelery against payment of interest. In India, the interest levels are set by each bank individually and all deposits are for three to seven years. As a further inducement, interest and capital gains on gold are exempt from tax.
However the amount of gold collected through this scheme has not been as much as expected falling short of the estimated 100 tonnes hoped for when it was launched. It seems that Indians prefer to keep their gold and pay their debts with money instead.
But now The National Spot Exchange, controlled by Financial Technologies, the Indian market company, is offering contracts for domestic gold bullion, ranging in size from 8 grams up to 1kilogram.
"Though India has a huge household stock of around 20,000 to 25,000 tonnes of gold, there was no single market available where this could be sold." managing director and chief executive of the National Spot Exchange, Anjani Sinha, stated.
He went on. "You don't know what is the purity, you don't know what the jeweller is going to pay to you ... and the price realisation is not good because there is no electronic or nationalised market for selling gold." said Mr Sinha. He pointed out that the total commission paid under the new system would be about 50 basis points, or 0.5 per cent.
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Sellers now take their gold to approved refineries who then turn it into international standard gold bars of "995" purity.
Whether this will be inducement enough for private families and individuals, traditionally preferring to keep their wealth in Indian Gold Bullion, to relinquish and give up their gold is a moot point. Historically the Indian culture has not found it in its heart to give up gold bullion for cash.
Gold Investment
Gold investment is very much in the news today and to buy gold as an investment is easy to do provided some important factors are taken into account.It might sound obvious but the first rule would be buy the cheapest gold you can. This means shopping around and a lot of browsing and comparing notes to find the best deals. There is a difference between dealers when it comes to coins and small bars and also take into account the shipping and handling charges which can also vary between dealers and mints.
Gold Bars, Krugerrands and sovereigns are perhaps the best buy with gold bars having the lowest percentage premium over the spot gold price. When comparing dealers and mints, compare the percentage over the premium and look at what is the bottom line. What is the total you would have to pay from each dealer for the same coin or bar delivered.
Buying regularly is another little secret to building up a healthy gold investment portfolio. Even if it is only a small amount each month it is surprising how quickly that small amount can become a substantial gold investment.
A good and thorough understanding of rare gold coins can also reap some spectacular rewards. Scouring the auctions and coin clubs can net one a good deal, particular if someone is in a tearing great rush to sell during a time of economic turmoil.
It is often said that one should buy low and sell high. But for the serious investor of gold who does not sell this is not the best way to go about it. In fact to continue to buy on a regular basis is more likely to conserve ones gold assets as the average price one pays for gold will even out over time.
If one wishes to trade in gold, then this is a different matter. It is more likely that one would speculate in stocks in gold companies or exchange traded funds and then different rules would likely apply. Such as, for example, understanding the dynamics of the gold market and its relationship to inflation, a bear or bull market in stocks, financial instability and so forth. Regular, even day to day trading is subject to more variables and market forces and requires a different way of thinking not for the novice or those of a conservative bent.
But for the saver, rather than the speculator, coins and bars are a more conservative way of saving and, when done on a regular basis, can reward the investor with a very nice gold investment.
An even better method that saves on the problems with shipping and storage, insurance and security, is to buy gold in escrow. Here, the gold is already available so there is no waiting period and the premium is much lower than on the purchase of gold coins and bullion bars.
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One simply opens an account at GoldMoney, for example, and funds the account on a regular basis with any amount one can afford. Gold to correspond with your funding is allocated to you and then is legally in your name. You have an account that tells you how much gold you have. There is a nominal storage charge to cover the gold being fully insured by Lloyds of London and an audit is done on a regular basis. This method takes all the heart ache out of handling and shipping gold and reduces the expenses down to an acceptable level.
A new option available is that one can also take delivery, from GoldMoney, of 1000 gram gold bullion bars now. the charges are nominal and it is good to know that one can take out one's gold if the occasion warrants it.
When it comes to gold investment this is surely the best way to go.
Investing in Gold
Investing in gold bullion can be done in a number of different ways. Each have their own particular advantages and which one an individual chooses will depend on a number of factors including is it an actual investment in gold, what are the additional costs such as shipping, insurance and storage going to be?Gold investment can be done in the following ways:
Gold Stocks and SharesGold Exchanged Funds
Gold exchanged funds
Gold Coins and Bars
Gold rounds
Gold held on your behalf
Here the investment is not actually in gold but in a a fund which is apparently backed by gold. One has an account and 'buys' units that reflect the price of gold at any one time. Here the value of your asset is the price of gold rather than gold itself. You might ask what is the difference? Well the price of gold used is the gold futures price. This can be and usually is, very different to the actual value of gold. If you check out the value of gold bullion in the market place, such as from a dealer or even on an auction such as eBay, you will see that there is a marked difference to the value of gold there and the price of gold as reflected in an exchange traded fund. One is subject to potential manipulation of the price with the constant buying and selling of gold futures.
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Gold Stocks & Shares
This covers investing in gold producers such as mineral companies, mints and even gold futures.
The investment here, however, does not mean that one is investing in gold. One is investing, rather, in the performance capabilities of the mining or investment company. Such companies may have other interests, investments in other companies for example, or mining other minerals. The management of these companies also play a part in the value or share price of the stock in such companies.
This means you are not so much investing in gold as in the management and administration of companies that may or may not mine gold exclusively. This also includes investing in gold futures. Here again there is no actual investment in gold, only in the prediction of what the gold price in terms of currency will be at some time in the future. In addition, there are other considerations to take into account. Taxes and fees for example. You also have to manage the shares, when to buy and when to sell.
Gold Coins and Bars
Gold coins are one of the most popular ways of accumulating gold for many people. Here you are actually investing in gold. This is not the cheapest way to invest in gold however and there is a high premium to pay for buying theme gold coins or even popular ones such as American Gold Eagles, Canadian Gold Maples or even the South African Krugerrands.
Gold coins such as these demand some care and attention. They cost money for shipping and sometimes storage. They take up space, especially of you have a lot of them and should be insured in case of theft etc.
Gold bars are a little better but still have the same premium, shipping and storage issues. The premium can be less as there is less work involved in the manufacture of gold bars as distinct to gold coins. You can even buy one ounce gold nuggets. Small blocks of gold which one can hoard and store in a squirrel like fashion. Even so gold is heavy and moving gold between some countries can pose problems with customs and security.
But investing in gold coins and bullion bars means that you are actually investing in real gold and not some representation of it. Gold also, in most countries, is tax free to buy and sell.
Gold Rounds
Gold rounds is a little better than gold coins or gold bullion bars in that the premium is usually lower. Yes you still have the same shipping and storage fees etc, but the overall cost to buy gold rounds is somewhat cheaper.
https://sites.google.com/site/goldandsilver2012/how-to-buy-gold/zz
Gold rounds are like gold coins but are not manufactured as legal tender so have no currency value. They are produced purely and simply as a method of owning gold. They are generally the same size as most gold coins and usually pure .999 gold. They are usually one ounce of gold. They are easy buy, transport, store and sell.
Gold rounds are an excellent way of owning and investing in gold.
Owning Gold through a Custodian
owning gold through a custodian has all the advantages of owning gold and none of the disadvantages provided you have the right custodian.
Here you have a company, such as GoldMoney, that holds the gold for you obviating the need to handle shipping storage, insurance and security issues.
In addition whereas you might have to buy gold in specific amounts, here you can buy anywhere from the tiniest amount up to unlimited quantities. Also instead of waiting weeks for gold to be delivered, you can more or less buy it right away and have it instantly credited to your account.
This works by you opening an account and purchasing the gold which is stored in a bank vault. The ownership of the gold you have purchased is then transferred to you and your hold is represented by your account. The gold remains where it is where it is insured against the usual theft or loss by any other means. Audits are done on a regular basis to ensure that the quantity of gold in storage is fully accounted for.
You can also take delivery of your gold if required although this is hardly necessary. This can be in the form of 1000 gram gold bullion bars and it can be delivered to you in most countries around the world. The charge for this is nominal and the gold bars are 95.5 percent or over pure.
The value of your gold is reflected in the price of gold as it changes. One big advantage here is that you can buy gold on a regular basis simply by funding your account and buying the gold. The amount can be small or large.
You can also transfer any portion of gold from a gram or two up to any amount to another account holder through the system.
Opening an account is free at GoldMoney and, after the initial paperwork, can be funded right from the word go.
Accumulating and investing in gold this way has some important advantages. It is never moved from its storage facility. Such issues as shipping, storage security, buying and selling are not a problem anymore.
Buying gold on a regular basis means also that the price you pay for gold evens out over time and you retain the value of your investment. Investing on currency or stock and shares is subject to inflation and recessionary issues. Gold has never lost its value in over 50 years. You can still buy exactly the same value of commodity now as you could 50 years ago with an ounce of gold.
https://sites.google.com/site/goldandsilver2012/how-to-buy-gold/zz
Each of these methods of gold investment is different but each has the same purpose. Owning gold.
The trick is to use that method that saves you the most while giving you the best options to investing in gold
Thursday, April 30, 2009
Dental Scrap Gold
Dental scrap gold is fast becoming an additional resource for people wishing to sell gold.Dental scrap gold consists of any gold that has been used in the mouth and is worth more sold than kept.
It can include any failed, damaged or deteriorated gold or silver crowns, any bridges, PFM's (porcelain fused to metal), PFG's (porcelain fused to gold), Inlays, Gold Partials and more. In fact here is a list of the dental scrap including gold, silver and platinum that can be sold.
Dental SweepsThese can be with or without bone or porcelain.
Gold Crowns
Gold Bridges
Silver Crowns
Silver Bridges
Platinum Crowns
Platinum Bridges
Palladium Crowns
Palladium Bridges
Mixed Precious Metal Dental Work
Bridges
PFM's (Porcelain Fused Metal
PFG's (Porcelain Fused Gold
Inlays
Onlays
Caps
Sometimes you will find the gold is fused to porcelain as in PFGs. This can still be recovered and separated and most scrap gold dealers will do this.
Many people these days are making some extra money selling old gold caps, PFGs, bridges and crowns. Old teeth given to one or left to one by deceased family members, gold teeth that have fallen out. Sometimes a gold tooth can sell for around 50 dollars depending on weight and other factors. Gold for dental work is usually around 16 karat and needs to be chemically treated to leach out other metals in the alloy before it's melted down.
https://sites.google.com/site/goldandsilver2012/how-to-buy-gold/zz
While the gold may still be attached to a tooth, jewelers will hammer out the gold or if it is really firm, leave it in cola over night to loosen it and then hammer it out in the morning. The small gold dental nuggets are then refined and melted down into ingots and sold back onto the market.
There are many scrap gold dealers who will buy dental scrap gold and you can browse them. There are some reviews here of scrap gold dealers who will buy dental scrap gold.
Once upon a time one might have said, 'there's gold in them thar hills', but now with dental scrap gold around it is 'there is gold in them thar mouths'.
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