The global shortage of gold bullion is caused by the coronavirus. Financial uncertainty has led retail investors to embrace metal that is considered a safe investment. At the same time, the availability of ingots has declined as gold companies have production problems due to the coronavirus.
How to invest in Gold
Even gold and silver can be invested in the market either as a physical product such as coins, ingots, jewelry or by investing in a fund, buying shares in mining companies or derivative products. The electronics industry makes circuit boards from gold, and gold is also used in catalysts and semiconductors. However, if you are buying gold or silver in the long run because of the security it brings and you are not speculating on its value in the short term then the only right way is to buy it as a physical product. Most gold and silver derivatives investment products have no physical product behind them at all or only a very small part and thus in the event of a disaster you will only be left with worthless paper.
Spot Price
The price of both gold and silver is determined by the London, Tokyo and New York Metal Exchanges, this price is called the spot price. The unit of weight is 1 Troy ounce, or about 31.1035g. In addition to this, a fix price is set in London twice a day, AM and PM. That fix price is used by most stone footers and also by many smaller online stores. Many larger Online Stores, on the other hand, use a near real-time spot price. There is one more attribute associated with the pricing of precious metals, because at that stock exchange price you will not be able to buy a physical coin or ingot, but at that price there will still be a premium. That premium is usually relative to the bigger the smaller ingot or coin you buy. It also varies from store to store and if you order from an online store you will need to consider shipping costs as well. In addition, the price of silver in most parts includes VAT, from which investment gold is exempt.
Understand the Purity
Before you buy any precious metal product you should still know how much it contains pure gold or silver. The spot price is set for pure gold or silver i.e. it is usually 99.9% or 99.99% pure. Purity may also be reported as 1000 parts, i.e. 999 or .9999. Ingots are usually .999 or cleaner, but coins vary especially if they are old coins in circulation, their purity is usually .900 or even well below that. For example, silver coins in circulation in the United States had either a silver content of either 90% or 40%. These are called junk silver and are sold a lot to bona fide investors. Avoid buying these coins as there are still a lot of them in circulation, so they have no collectible value and it is illegal to melt them, so they cannot even be processed into a better product.
