Investors, who plan to invest in gold and silver keeping in mind the impending international financial crisis due to fiat currency, need to stay alert to some of the modes of investment in gold and silver.
Modes of Investment in Gold & Silver
Pools and Certificates,
Futures & Options
According to some international financial analysts the above stated modes take investors towards false ownership of gold and silver as against the actual physical metal control.
Numismatic Coin versus Bullion Coin Purchase
Some economists are of the opinion that numismatics coin purchases are to be avoided for the premiums charged on them are way beyond their metal content. These coins when flooded into the market along with bullion coins fall behind the latter in the premium rate race. The premiums of bullion coins are seen quadrupling as against the numismatics; the numismatic premiums are seen at astonishing lows when compared with the bullion counterparts. Purchasing numismatics could also have one paying far more for their antique nature instead of the metal content .The bullion coin prices worldwide are fixed based on their actual spot prices, whereas the numismatics are given a value based on their antique status alone.
Pools and Certificates
When one invests in a bullion pool or certificate, one becomes a creditor of the bullion bank storing the precious metals. Legally, a gold pool or certificate program makes the bank become the owner of the investor’s precious metal. If the bullion bank goes under financially, it can sell the investor’s gold to maintain its assets to avoid its own closure. In order to keep a check on one’s precious metal one could save it in vault storage. This would help the investor keep his metal segregated from the rest and also enjoy a name allocation; this way, if the bank went under the investor’s precious metal would remain safe.
Futures & Options
Futures and Options give an investor leverage that can magnify his loss and gain. If the commodities exchange were to default, it can change the rules to allow liquidation orders only. In this eventuality, an investor holding futures with it would be forced to accept cash payments instead of physical gold and silver, as the future designates to him.
Gold ETFs / Silver ETFs
Many metals experts are of the view that silver ETFs and gold ETFs may hold less than the amount of precious metal they supposedly should be owning or none at all.
Economists state that for most precious metals investors, the bottom line for keeping hard-earned wealth in precious metals is to own a physical asset that can tide over any economic instability. However, wealth in ETFs makes the investor an unsecured creditor of a mega-bank which can devour wealth in the face of a financial crisis.
As is the case, in an electronic or paper form of investment , the investor can be denied access to the value of his or her gold ETF or silver ETF shares due to acts of god, war, confiscation, computer glitches, fraud, insolvency, lawsuits, liens & garnishments.
Given these for warnings , coupled with the very real possibility that silver and gold ETFs are not backed by physical gold or silver, investing in real, physical gold or silver should always be the preferred option.
Leverage can dramatically increase an investor’s investment margins and it can be great for those educated in proper techniques and skilled in their use.
But for those in the unaware realms, leverage could also enhance losses to a 100% if not more. It’s as simple as this: leverage and risk go hand in hand.
Online Cheats / Dealers
Last but not the least one has to be vary of cheats doing gold and silver investment deals online.
Jindal Bullion Ltd, are retail/ wholesale traders who specialize in online booking for physical gold and silver all over India. Jindal Bullion is a reputed due to the years invested by them in the precious metal trade. They stand for guaranteed purity of metal which is BIS hallmarked