Tuesday, 27 February 2018

What Does the Gold "Spot" Price Actually Mean?

A spot price is the price that a commodity, such as gold, can be traded and delivered for right on the spot. If you wanted to purchase gold bullion now, then the spot price would be what you’re expected to pay if you bought it online right now. Spot prices are usually measured in single units (often grams or ounces, depending on the country that you are from). For example, if you’re in the United Kingdom, then the “spot price” of gold is referred to in grams. That would be the cost of performing the transaction and having it delivered to you right now. All spot prices are volatile and change depending on many different factors.

Spot prices contrast with futures contracts, which are determined using several factors such as the spot price, expected changes in the supply and demand of a commodity, and also the costs of transportation or storage. Futures contracts are a way for traders and producers to reduce the price risk associated with trading commodities and they can extend several years if needed.

Keep in mind that spot prices refer to the price which one could obtain gold including the transaction of the commodity itself and delivery. The fineness of gold sold by spot price must be at a certain quality.

How Is Spot Price Determined?

The spot price is often determined by a futures contract that extends to the current month. There’s often a lot of guesswork involved when dealing with spot price determination and there are many factors such as the trade volume and past statistics that can go into calculating how much the value of gold can change.

Commodities such as gold and silver are in a constant state of flux due to their markets. It occurs around the clock and the value of these commodities can vary greatly throughout the day. Whether it’s economic data, geopolitical news, events, reserve actions or even the actions of other companies, everything needs to be taken into consideration when it comes to determining the spot price.

If you’re considering investing in a precious metal such as gold, then it’s important to understand just how volatile spot prices can be and how they play a part in prices determined in futures contracts.

Monday, 5 February 2018

What is the forecast for gold in 2018?

Despite a lot of uncertainty around the world, gold had a respectable year in 2017. Up 11.3 percent for the year is not a bad result when you consider the near-chaotic start of politics all over the globe. But what will happen in 2018? Let’s take a closer look.

Gold is shinier in January than it is in December.

Gold almost always hits good prices in January and has done the same this year as it has in 11 of the last 15 years. Whether this is down to positioning for the rest of the year, or just to beat the January blues is anyone’s guess, gold has certainly started 2018 well.

The dollar is weaker.

As any financial analyst will tell you, 2017 may have marked the end of the long period of US Dollar strength. When currencies start to weaken, investors tend to buy gold as protection. So as the dollar is weakening, it could be an exciting year for coin and bar owners. It’s fair to say that gold has faced something of a headwind since 2011 as the dollar has been rising in value but the winds could be changing direction over the next 12 months or so.

Stable supply

The supply of gold hasn’t changed much over the past couple of years, so the next year should be good for owners of gold coins and bars. If the price of gold goes up, gold recycling increases, and then the price goes down again. So, if you have gold, hold it for now, and be ready to buy more, knowing it will go up again.

More potential crises?

2018 is beginning with a reasonable amount of turmoil all over the world. And as history shows, gold is something investors turn to when crises become apparent. So, if there are any world crises - especially in the stock markets of the world - could gold holders benefit? Almost certainly, as in times of trouble, the price of gold goes up.

Gold bull market still intact

According to HSBC’s James Steel, the long-term future for gold is in good shape. While there have been fears of a new recession, a slowdown in the economy of China, and economic chaos in Greece, there has been no slowdown from successful investors buying gold in the past dozen years. So, while the pace may slow, the outlook for gold bar and coin owners is that gold’s investment potential is still very attractive.

The right conditions

Finally, the economic conditions in Europe look suited to price rises in gold. The increase in price last year was helped by the turmoil caused by the Brexit decision. And if there are more threats to withdraw from the EU by other countries, there could be a huge currency collapse. If that happens, only one thing is for sure - investors will almost certainly be looking at increasing their stocks of gold, and the price will rise.

If you are looking for a secure investment for 2018, then gold coins and bars could be just what you are looking for. Visit www.bullionforless.co.uk or pop into our convenient Cardiff location for friendly help and advice from our knowledgeable staff.

Thursday, 18 January 2018

Gold Coins vs. Gold Bars

If you want to make money from precious metals investments, gold is one of the best choices in the world. You have a couple of options on the table when it comes to selecting the best ways to invest. Some people prefer to put their capital in gold coins, whereas others prefer gold bars. In this article, we’re going to draw your attention towards some of the pros of each solution. Hopefully, this information will set the record straight and ensure you make the right investment decisions this year.

The benefits of investing in gold coins

Gold coins are a fantastic option for investors because the items are considered legal tender. That means owners can cash-in their investment at any time in a range of different ways, and as an added benefit British gold coins like sovereigns and Britannia are capital gains tax free! Coins come with a face value, and there is always information about purity and weight printed on the item. Apart from being collectable, gold coins are a brilliant investment for the following reasons:

      Coins come in a plethora of different varieties and designs. That means you can get something that not only holds its value, but that is also aesthetically pleasing. Many coin owners decide to display their collections at home and use them as a focal point.

      Coins tend to contain less gold than bars, and so investors don’t have to spend quite as much money as they would with the alternative solution.

      Coins are often limited edition, and so their value can increase far beyond the rise in base metal prices. Rare coins will always become more valuable than mass-produced items.

The benefits of investing in gold bars

Most gold bars weigh between one and ten ounces, which makes them much larger than the average gold coin. They tend to come from private mints in the slab shape we’ve all come to recognise. While gold bars are not legal tender, they are easy to store, and the items tend to increase in value quickly due to their size. Investing in gold bars is a wise move because:

      Storage never becomes an issue. It’s easy to stack gold bars and store them almost anywhere. However, due to the value of the items, most investors choose to keep their bars in safe deposit boxes.

      Most gold bars are 24-carat, and so investors don’t have to worry about lower purities. Still, if anyone has concerns, there are methods for testing the gold that will show exactly how clean and pure it is.

So, what’s the best investment for you? Well, that all comes down to how much money you can afford to spend, and what your plans for the future involve. For long-term investments, most people would agree that you should opt for gold bars because they weigh more and will provide better returns. However, those investing for the short-term should probably think about getting some gold coins as they’re easy to cash-in, and you have more flexibility with the entire process. For help and friendly advice visit www.bullionforless.co.uk and we can help you make the choice over which type of gold might be best for you. We also have secure storage facilities in Cardiff and Swansea to store your gold if you require it.