It doesn’t take a financial analyst to tell you why, either. We’re still smack dab in the middle of the most serious economic crisis we’ve faced as a country in several decades. Whenever we suffer a recession, people want to buy gold bars. The same thing happened in the nineteen seventies. The dollar took a dive, stores were closing across the country, and American investors went scrambling for the metal.

It’s interesting to note the gold crash of the early 1980s. We had simply not seen such a severe drop in the value of the metal before. The problem was a combination of high expectations, an economy that seemed to recover almost overnight, and the impulsive "Buy! Sell!" attitude being practiced by investors at the time. Sadly, if those investors had held onto some of their gold, they’d be seeing a nice profit by now.

While you certainly want to buy gold bars and sell them as is prudent to do so, we urge investors not to simply "cash out" the minute the dollar starts to take an upturn. It is always wise to sell at a peak, but it’s never a good idea to abandon your safety net entirely. This recession is not a one-time occurrence. We’ve had recessions before, and we will have recessions again. This is a very serious recession, but it’s not even the only economic crisis we’ve had in the last twenty years.

The fact is that when you buy gold bars, you’re buying yourself an insurance policy against times like these, therefore, it’s a good idea to have some gold no matter what. You don’t wait until you get into an accident to buy insurance for your car, so why wait until a crisis to buy insurance for your financial assets?

So our advice to anyone who does buy gold bars as their primary means of securing themselves during this recession is simply this: Don’t be suckered into the impulsive market. We’ve seen record shattering demand for gold lately, with more and more investors looking to buy gold bars. This is impulse, but, if you buy gold bars for the right reason, then there’s nothing wrong with that. However, we need to hope that these new gold investors do not all simply cash out as soon as the dollar starts to gain strength.

If they do, yes, the value of the metal will see a decline, however, the real reason they need to hold onto their gold is because you still need gold, even during times of economic ease. As with insurance, it’s better to have it and not need it than need it and not have it. You don’t throw your umbrella away whenever the storm clouds lift, so hold onto some gold not only for this recession, but for the next one as well.

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Kenneth Hansen

Aug 24, 2009

This has served to quiet many of the critics who, late last year, suspected that the gold bullion price has already peaked, and was likely to crash sometime in 2009. These fears are understandable, but as we’ve seen throughout this year, they’re also misplaced. The basic take on the gold bullion price throughout 2009 has been "so far, so good".

You don’t need to be an expert to know that the gold bullion price will most likely continue to remain strong until the end of the recession, and, hopefully, the new gold investors who are running to the metal as a secure alternative in these times will stay sharp and hold onto their gold investments through this and the next recession.

The bottom line is simply that the gold bullion price has not peaked, and is not likely to have peaked any time soon. What we can do until then is simply keep investing in our favorite coins and bars, and keep one eye on the spot price and the other on financial news.

The dollar is still in fairly rough shape, seemingly losing spending power to other major global currencies with each passing day, and of course, this is a major factor in the rising of the gold bullion price. The primary purpose of gold investing is, again, to safeguard yourself against times like these, against inflation and against the dollar seeing a loss of spending power against the pound and the peso.

Our advice to long time gold investors is simple: If you’ve been holding gold savings for several years, then you’ve no doubt made a nice profit by this point, so trade in one of your smaller coins and treat yourself and a loved one to a nice dinner and a movie, and then sit back and watch the gold bullion price continue to rise, as it most likely will in the coming months. The gold bullion price has not peaked, and it probably won’t any time soon, so you certainly don’t want to cash it all in any time soon, but you may as well take the time to reap the benefits of being a gold investor.

Most importantly, though, hold onto your gold investments and wait and see how far these climbs will go. This is a great time to be a gold investor, and it doesn’t take a well paid analyst to predict that the best is yet to come. Hopefully, all of the new gold investors who have jumped onto the investment during the recession will stay smart and hold onto their coins and bars if and when we do recover from this recession, but we will have to wait and see.

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Kenneth Hansen

August 9, 2009

First, the road to a comeback for the economy is a long one. President Barack Obama’s plans to get the US back on its feet may or may not pan out, but it won’t happen in one day, one year, or perhaps even in one term. Things are still rough all over and are likely to be so for some time to come. Therefore, American investors would be wise to protect themselves for this and the next financial crisis.

Second, the gold bullion spot price almost always remains strong in times like these. As the dollar falls and other prospects become a little less alluring, investors always seem to rush for gold, which drives the value up.

The “golden rule” of the gold bullion spot price is that it tends to do the opposite of what the American dollar does, and that’s why the precious metal is perhaps the best insurance policy an investor could possibly have against times like these.

Certainly, we all want the dollar to finally experience a strong rebound. Even if we have enough gold to stay safe in any financial weather and can take comfort in the fact that the gold bullion spot price will be driven up by the sinking dollar, nobody actually likes a recession.

Unfortunately, there’s only so much an individual can do to help the country get back on track. If we can afford it, we can help the local car dealerships out by splurging on that new Lexus we’ve been eyeing, or we can simply take all our friends out to eat and leave a nice big tip, but rectifying the problems that have led us into recession and then slowly coming back into a time of relative comfort takes a lot of patience and some clever folks in Washington.

Until the dollar does rebound, the American automakers are back on top and the credit crunch is officially off, our advice is to simply do what one can to take care of oneself.

Again, this recession won’t be over this month, this year, or possibly even this decade. The upside is that the gold bullion spot price tends to shine in the face of such crises. Or, to put it all shortly; don’t waste your time worrying about the recession. Instead, just make the most of what options you have open to you. Be glad you have the safety net of gold to fall back on, be doubly glad that the gold bullion spot price has been performing well over the last couple years and look forward to your future. And remember that the economy always has its ups and downs, so be sure to use your favorite metal as a safeguard against this recession and the next one.

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Kenneth Hansen

Jul 12, 2009

This may seem unrelated to gold bullion investments, but we bring it up to point out one of the vital truths you should keep in mind when you buy gold: A little here and a little there adds up.

While amassing several million dollars in six years is a bit unrealistic for most of us holding gold bullion investments, the point remains that when you buy gold a little at a time, it usually turns into a lot more money than what you put into it.

For example, if you invested just one thousand dollars into gold bars five years ago, that investment would be about twice what it was worth in 2004. If you invested the same thousand dollars into gold bullion investments back in 2001, that investment would currently be worth between three and four thousand dollars based on the gold price average in 2001 and the current 900+ average.

You might be quick to point out that the gold price has had bad decades, as well, and that is a fair criticism, but let's look at historical averages...

Throughout the nineties, the spot price of gold lost nearly one hundred dollars from a $362 average at the end of 1991 to a $279 average at the end of 2000, after having suffered a similar decade in the eighties, having started at $460 in 1981 and ending at $362 in 1990. Remember that the 1980’s and 1990’s were very strong economic periods. The middle class was booming and those who did have gold bullion investments were under no pressure to dip into those savings.

The reason to hold gold bullion investments is simply to protect yourself against economic crisis, right? Well consider the late seventies, a period that was rougher than the current economic crisis: Gold went from a $40 average at the beginning of the decade to six hundred twelve at the end of the decade.

If nothing else, these numbers prove two things: First, that the metal has proven to be reliable for protection in times of recession, and second, that it's a good idea to invest in bullion even in times of ease, as you never know what the next year holds for the economy.

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Kenneth Hansen

July 1, 2009

In fact, when you think about it, this is why gold investing makes a lot of sense. An investment that takes a bit of time to ultimately pay off in terms of growth is an investment that is relatively safe, secure and which will continue doing strong even while other investments become more and more unpredictable. This is also why it’s such a surprise that so many people waited until an economic crisis to buy gold bullion (and why it's no surprise at all that they eventually did turn to the metal).

To look at the spot price at the end of every day you would see a big up or down once in a blue moon but for the most part, gold tends to rise and fall in small increments, usually only making major rises over the course of several months. This may be what turns many eager young investors off of the metal. The fact is that the option to purchase gold bullion may not be quite as tantalizing as things like stocks and bonds or the housing market, but they are a smarter, safer and ultimately more rewarding investment. Again, you won’t get rich overnight with gold bars but then again you won’t go broke overnight either.

Perhaps this is why so many have chosen to purchase gold bullion for retirement accounts lately, contributing to the surge. With social security set to dry up before many of us reach retirement age and fewer and fewer companies offering solid 401ks to new employees, the young adults currently entering the workplace have fewer reliable options for ensuring that their golden years are truly golden, so of course we’ve seen the gold bullion price go up largely thanks to the people who are choosing to purchase gold bullion for the first time after becoming disillusioned with the usual forms of long term investing.

What it comes down to is just that: Investing for the long term. Ideally you want your financial resources to keep growing as you go through life and there are very few reliable ways to ensure that that happens. We can generally predict the stock market up to a certain degree (even in this market, although our predictions are often for the worse), but where do you think those stocks will be fifty, twenty, even one year from now? Who’s to say you’re not investing in the next Enron or that we won’t see another major crash before your stocks have had considerable growth?

Gold is a whole other story of course. We can’t make a precise prediction about where gold will be in fifty years, as in guessing the exact dollar to ounce amount, but historically gold has always been worth more than it had been a half century ago.

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Kenneth Hansen 

May 16, 2009

This massive storage depot for precious metals, more formerly known as the United States Bullion Depository, is actually the second largest in the US as of the early 'aughts. In fact, it is a little-known fact that more bullion coins, bars and bricks are held in vaults at the Federal Reserve Bank in New York City, though much of it is from foreign depositors.

The Fort Knox site, encompassing many thousands of acres, has been used on and off for over 150 years. Though the site has strategic importance and was used by both Union and Confederate forces during the Civil War, construction of the modern facility didn't begin until after World War I. Construction on the depository didn't begin until 1936 – 3 years after President Roosevelt nationalized the gold supply with Executive Order 6102.

The initial deposits required 500 box cars to move many tonnes of gold bullion. Investment in this ultra-secure location, valued at an almost reasonable 8 million inflation-adjusted dollars, has continued since, though the gold stored there continues to be valued at the 1933-adjusted price of $42.22 per ounce after buying gold bullion from citizens at about half that price.

Fort Knox, as anyone who is even a little interested in gold bullion investing knows well, remains one of the most secure facilities ever constructed. This has been made famous in both television and film media, perhaps most notably by the 1964 James Bond film, Goldfinger. In addition to its history as a repository of gold, holding as much as 650 million ounces in the 1940s, irreplaceable historical objects such as the Magna Carta and the Declaration of Independence have also been stored here.

While tourists are allowed to see the outside of the facility and take pictures, the Depository itself is entirely secure, with no visitors allowed. In addition to the US Mint Police guard that keeps constant watch, the gold vaults themselves are also reinforced with hundreds of tons of steel, concrete and granite. The vaults are separated into several smaller rooms and are on the second floor.

With the exception of the occasional testing of small amounts of gold for purity, the gold in Fort Knox is in long-term storage, with no major deposits or withdrawals in several decades. Like some sort of spy movie, the 20-ton vault door can only be opened with several combinations, with no single person knowing more than one section of the code.

For the average investor buying gold bullion one or two ounces at a time, such security measures aren't necessary, but it is useful to have a good, secure place in mind to keep them before you purchase bullion bars or coins, no matter how trusted your dealer might be. Though not holding nearly as much gold bullion as it once did, the current holdings of over 150 million ounces are still the largest state-owned collection in the world.

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Linda Hess

April 18, 2009

A fun way for collectors to invest in gold bullion, European gold coins have the advantage of being very available and exchangeable while also featuring a large number of countries, designs and denominations to choose from. They are especially popular among type collectors.

The smallest gold coins bearing a Euro designation are the €20 coins issued by similarly tiny nations such as The Vatican, San Marino and Italy. All these coins, issued in the early 'aughts, were proof sets only and generally of interest as numismatic items for collecting.

The tiny island of Malta has recently issued another small gold Euro coins, with €50 proof, 91.6% pure (or 22-karat) bullion coins that feature the Auberge de Castille on the reverse side. They weigh just 6.5g (just short of a quarter-ounce) and were issued first in 2008 to great success. Issued as a collectors proof item, the Maltese €50 is less a strict gold bullion investment as it is an affordable numismatic coin in gold.

Much more popular among those who purchase bullion bars and coins for investment's sake are the more recent issuances of both €100 and €200 coins. These coins, which are much more often found as either 22-karat or 99.99% pure gold and produced by larger nations in larger quantities. Weighing ½-ounce and 1-ounce respectively, they sell at a small percentage among the spot price of gold. As such prices are continually adjusted.

Buying gold bullion from Europe is usually accomplished through an established coin dealer in the US or through European banks that are required to treat gold Euro deposits as real currency. Each country that mints a gold coin is allowed to make whatever type of coin they wish. As such, many of these gold Euro coin designs change every year or so and are commemorative in nature.

Some major players include France and Germany who each have minted a significant number of Euro-coins since the currency transformation was official and final in mid-2002. England, though still using the pound, has also issued gold Euro coins, as have other member states in the 'aughts.

Perhaps one of the most popular investment-grade gold bullion coin was the very first one to be issued in Euros, the Austrian Philharmonic coin valued at €100 featured 99.99% pure gold and has been issued each year since 1999.

While one of the advantages for those who buy gold bullion coins is that each coin has an inherent value that is separate from the face value, Euro-type coins can also make for very collectible type coin sets. For those who are concerned about supply concerns in the US, buying gold bullion from Europe can be one of the only places to reliably obtain guilt-free gold outside the Americas and Oceania.

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Martha Cooke

April 12, 2009

Now here’s a question you don’t hear asked very often: Why are gold bullion investments the most popular type of metals investment?

Platinum tends to be worth much more, right? And isn’t silver more common than 24k gold bars? So why do so many investors choose to protect their assets against economic strife with bullion coins or bars?

In fact, throughout much of civilized history, gold prices weren’t even quoted. Rather, every other commodity was measured by its gold value. Then of course you have the gold standard, which we used to use to keep the value of paper dollars and non-precious metal coins under control

What it comes down to is an answer perhaps less surprising than you may have hoped, unfortunately: Gold can be found all over the world, and has found some use in nearly every documented society.

This is why gold has been used as money in various societies, independent of one another’s influence. No one country or government really “started it all”, rather, various societies started using gold independently of one another, and this carried on.

The very first gold coins were produced back in 700 BC. This came from the fact that gold was scarce. As such, it could be safely used for trading without having to actually swap goods back and forth. This was, of course, a matter of convenience.

Were the first people to buy bullion to use say, quartz rocks, instead, the value of a good or service would drop tremendously thanks to the commonness of the rock. Using a rarer metal like gold allowed the value of an object to be “worth its weight” in something that was rare.

Ironically enough, when the gold standard was put to rest in 1971, the value of the dollar went on to drop significantly shortly thereafter. Why? Well, a dollar is just paper with some ink on it. The government can then print millions upon millions of them, and with every new one printed, the dollar in your pocket becomes less rare and less valuable.

It is the rarity, the scarcity of an item that makes it valuable. When you buy bullion coins or purchase bullion bars, you are getting something of value because there’s only so much gold to go around. We’re still mining it out of the ground, yes, but you cannot simply produce gold, you cannot mint more gold.

We may one day mine every last ounce of gold out of the mountains. Money is printed on paper and minted with not-so-valuable metals. In fact, the pennies in your pocket would be worth more if you melted them down than they are as currency.

At the rate inflation is going, we may eventually come to a point where a dollar bill is worth less at face value than the money it’s printed on. With gold coins, this will never happen.

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Theresa Bohn

April 11, 2009

The reasoning behind these predictions? The Central Bank Gold Agreement. This was basically a pact between banks from a number of countries to work together to stabilize the price of gold, which was hitting a low in 1999, when the agreement was made. The deal was renewed again in 2004, and is set to expire this September.

The people making these speculations are missing out on a very important part of making such predictions, though. If you want to look at the history of gold, you have to look at the economy surrounding the gold value, not just the gold value itself.

Gold was certainly stabilized by the Central Bank Gold Agreement, but why was gold at a low in 1999?

Simply put, very few people felt the need to buy gold, to buy bullion or make any sort of gold bullion investment. Ten years ago, we were not in a recession. The housing bubble hadn’t burst, stocks were still going relatively strong, and we hadn’t hit any record unemployment rates.

Compare that to today.

The Central Bank Gold Agreement helped to stabilize the value of gold, but we didn’t really see any huge jumps in the gold value until this recession was made official. It was really just the last year or so that we saw a record number of people looking to purchase bullion bars and invest in gold bullion for the first time.

Of course the fact remains that it’s very hard to make accurate guesses and predictions about the economy. Sometimes you can read the writing on the wall. You know that, if the CEO of a company is caught up in a scandal and is revealed to be stealing from investors, you’d better put your money on some other stocks. Most of the time, however, it’s a lot more subtle and complex than that.

If you want to predict where gold values will be at the end of this year, you have to look at the whole picture. The economy is still in trouble, and the people holding onto gold investments today are probably not ready to cut and run any time soon.

Some are even predicting a return of stocks as a viable, safe option, even suggesting that the stock market is likely to see a boom comparable to that of the early eighties. That would be nice, but it’s a hard prediction to put much faith into.

All of this is, of course, beside the point. If gold crashed tomorrow, it’s not the same as a stock crash. A stock crash might never recover, whereas gold almost invariably recovers from any drops simply because it is a real asset, a solid commodity that can be bought and sold, and that is exactly why so many investors are turning to gold as a way to stay safe in any economic weather, rain or shine.

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Stewart Lawson

April 5, 2009

But, the question remains: if gold is over twice as dense and steel, why didn't any one notice when they were physically put in the vault? If it was your job to purchase bullion bars, wouldn't you pick a few up to check? And why didn't the thieves bother doing a better job of making forgeries?

Apparently no one did, or the wide-ranging conspiracy involved switching the contents of the vault over the course of a month or two. Nigerian nationals living in Ethiopia were responsible for conducting the transactions when the state decided to invest in buying gold bullion from what turned out to be less than reputable sources. In fact when police raided the home of the ringleader (after he had fled the country, of course), they found tens of millions of Ethiopian Birr in several different currencies.

Among the officials indicted in the incident were several officials of Ministry of Mines and Energy who were supposed to have assured Bank officials that the bars were, in fact real, when settling on buying gold bullion from such an “unusual” source. In what amounts to an act of treason for those arrested, officials from the bank, chemists and geologists were also arrested when the story broke.

In all, there were nearly 595kg (nearly 20,000 ounces) of what was thought to be 24k gold bars until the fraud was discovered. In the end, 26 people were brought to face charges of fraud and treason. The bars in question were the 400-ounce (just over 33 pounds) London Good Delivery Bar – what should be an industry standard allowing gold to be sold anywhere in the world, pretty much anytime.

The development was a result of changes made to the way that the Bank of Ethiopia decided to invest in gold bullion bars in 2005. It went from being the only authority in the country that could export gold bars to appointing official agents to handle the job for them. As such, if there had ever been real gold bars, they were gone, likely to other nations. The officials tasked with checking and buying gold bullion for the bank had clearly been bribed to look the other way and to not test the bars in question.

This story does raise another, perhaps more important question to other banks and mints in the world. When they buy bullion, do they check it? Just because the thieves in this case were sloppy enough to use poor quality fakes, it is possible to make a high-quality fake bar that is indistinguishable by feel. Have the gold reserves of the world, many of which actually back billions of dollars in electronically traded fund (ETF) investments, ever been checked for purity beyond a simple scratch test?

The answer is most likely, “no,” and that's a sobering proposition.

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Arthur McGuire

April 4, 2009

The obverse design of the popular coin features what the renowned wildlife artist Rick Lewis calls “the proud kiwi” in full-length profile. The Kiwi itself is New Zealand's iconic and flightless national bird. On the reverse of gold Kiwi coin is a map of New Zealand with the stars of the Southern Cross constellation superimposed with the traditional Maori name for the islands, Aotearoa, across the top – the phrase loosely translates to mean “land of the long white cloud.”

The New Zealand Mint also produces gold coins in several other denominations in sizes as small as 1/25-ounce allowing even allowing customers of very modest means to get involved with gold bullion investing. They also mint and sell significant numbers of silver bullion Kiwis and Fern coins.

Other 99.99% pure gold bullion coins include commemorative coins from the Chronicles of Narnia, the 80th birthday of Queen Elizabeth II, the HMS Bounty, the 90th anniversary of AnZac Day. In 22-karat gold, a small numismatic release of a Pukaki gold coin has also recently been minted. Unlike the gold Kiwi coins that are meant for those exclusively buying gold bullion as an investment, these coins often are sold at a premium over the spot price of gold in excess of that commonly charged for gold Kiwis.

The New Zealand mint has been producing gold coins from its Auckland location since the 1960s. The Kiwis, like the American Buffalo coins introduced much later, are the standard issue bullion coin offered to investors. In addition to the many gold coins that are produced there in .9999 fine 24-k gold, bars are also produced for the serious investor buying gold bullion.

The Professional Coin Grading Service (PCGS) announced in mid-February of 2009 that it would begin grading coins issued by the New Zealand Mint. This agreement covers both gold Kiwi and other commemorative coins, and the program, very similar to the also very recent and innovative arrangement with the Polish Mint, is designed to encourage interest in the “secondary coin market.”

The PGCS will rate the coins and certify New Zealand mist issue coins according to the same standards of certification and grading that they've applied to tens of thousands of US coins since 1948. However, they will not be issuing population reports as is done with coins of domestic issue. Turnaround times to have an international coin graded by the PGCS may take as long as two months, so collectors who send their coins in to be certified will simply have to be patient.

However, for some of the older, proof versions of the gold Kiwi, this may add extra value to a gold coin that is already worth a lot given the high spot price of gold at the end of February 2009. Investors buying gold bullion sourced from the New Zealand Mint will immediately recognize the value of buying certified gold coins, especially when conducting remote transactions that require something to legitimize them.

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Linda Hess

March 26, 2009

These types of fraud carry massive penalties, with up to 40 years in a federal prison as a possible sentence for the scheme that brought Reed and his partners nearly 13 million dollars in funds thought to be a sound gold bullion investment in both bullion coins and bars. It is ironic that gold bullion investing, thought to be the quintessentially safe investment in times of trouble is now being exposed as potentially shady as investors are complaining about not having access to the physical gold they hold deed to.

However rare this type of fraud may be, the virtual world of gold trading is rife with fraud outside the certified 24k gold bars and 99.99% pure gold coins that are issued by major world mints. While the physical properties of gold make it difficult to practically counterfeit when investors are on hand to actually handle the coins before they actually buy gold. For this reason, many who are concerned about safely buying gold bullion will make their purchases at coin dealer shops or trade fairs.

In the scheme that Reed ran, unreasonably high rates of return were guaranteed by virtue of gains made trading the gold around the world and playing the currency markets. While such trading could legitimately result in some large gains, they would not likely be very consistent. Investors in this particular scheme did not receive any of their money back after the fraud was exposed and Reed fled the country to avoid prosecution.

The current king of Ponzi Schemes, Bernie Madoff, has also been charged with claiming that he was trading in commodity futures, including both silver and gold bullion. Investing on such a scale, again, would have been noticed by regulators, especially as the amount of money in his imaginary investment fund worth about $50 billion.

Of course, investors who are fierce about always staying physical when buying gold bullion have nothing to worry about. Whether you purchase bullion bars or tiny fractional gold coins, the physical nature of these investments makes it certain that they exist, as long as you're capable of keeping them from being stolen.

Those who do keep physical gold have a great many different ways to hide gold in their houses or even on their persons. One elderly woman reported great success storing her gold Eagle coins in jars of peanut butter. As long as you don't forget where you've put them, buying gold bullion and storing it might just allow you to sit back and laugh as scores of gold contracts held in remote places are exposed as fraud while increasing numbers of gold ETF investors begin to demand to see “their” gold.

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Linda Hess

March 24, 2009

With a massive surge in the gold spot price since November of 2008, both small and large producers of gold have ramped up production. This includes not just coins and bars for investors buying gold bullion but also, of the ore itself. However, before investors in the Western world consider buying bullion bars from Indonesia or Thailand, they will want to consider the ultimate cost of their investment.

In North America, for instance, people have become accustomed to at least a certain amount of protection under environmental law. However, ruling military dictatorships and a thieving power elite in countries such as Cambodia (as profiled in a recent UN report) are causing severe environmental and human suffering.

Consider the use of mercury by miners without any protective gear and no concern for where it collects when used. Both miners and their families routinely suffer the effects of mercury poisoning, just as thousands of US miners suffered “black lung” when working coal mines in the early- to mid-20th century.

These are exactly the sort of human-right protections that collective bargaining and democratic processes lead to. When one chooses to invest in gold bullion with products produced in these countries, that money is used to prop-up such governments. Purchasing power is political power, as was the case with the South African Krugerrand in the 1980s, when their importation was banned due to the activities of the Apartheid government.

Some countries ruled by despotic leaders are willing to do anything for “hard” currency, including selling off the entire gold reserves of a nation over the course of a decade or two and selling it off as gold bullion investments.

While the countries of Southeast Asia are relative newcomers to the large-scale mining operations that these tiny and populous countries have exploded with mining activity, many of these nations have a long history of recovering tiny bits of gold for domestic use. There are many ancient treasures of the region made of gold or plated with gold. Bars and coins are a more recent innovation, due to rising stockpiles.

Countries that degrade the natural environmental are being more than un-ethical. Since the Earth is essentially a closed system as far as “things” and gases go, those pollutants eventually reach the waters of the world and the shores of North America. Buying gold bullion from countries that allow such abuses to continue is a poor investment in your personal health and safety.

Indonesia, has been a rising major producer of gold since the early 1990s, when slag-mining was first introduced. This process, banned in several US states after tailings were found in 40% of the Western watershed in the late 1990s. Cyanide leaching into the local water table acidifies water, kills fish and contaminates water supplies.

Because the amount of potential investment is so large in a time of rising gold prices, extra care should be taken to focus buying gold bullion that is produced in a responsible manner.

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Janet Jones

March 19, 2009

The Lure of Russian Gold

Since the 5 and 10 ruble, 90% gold coins of Czar Alexander II abruptly ceased production in 1917, there had not been a Russian gold coin available for those buying gold bullion until the collapse of the Soviet Union in 1991. Since that time, with very little disruption in the ability to mine gold suitable for bullion coins in steady quantities, the Russian Federation continues to release a small number of gold coins that are chiefly available to those in North America from European brokers.

The Soviets released a 10 ruble gold Chervonetz coin for a decade from the 1975, weighing just under ¼-ounce (.2489-ounce) of pure gold, and lasting until 1982. The coins were a reproduction of those issued by the original Russian Soviet Federative Socialist Republic (RSFSR) as it existed from 1917-1923, issued in two separate series.

Very few of the historical coins remain, making them very collectible for those making a gold bullion investment for numismatic value, but a fair number of the post-modern re-issues are still available for those who invest in gold bullion. This Chervonetz design has made a comeback in the form of a 10 ruble gold Chervonetz coin in late 2008, as issued from the Moscow and St. Petersburg mints.

Recent issues from the Russian mint are focused on 99.99% pure gold, more suitable for gold bullion investing and, are typically found in “fractional” denominations. For example the European Beaver series of 2008 features several silver coins and a single ¼-ounce specimen for those who prefer to buy gold. Buying gold bullion from Russia can be complicated, and may be best handled through a bank, but prices near spot can often be found with new coins.

A 250,000 ruble coin, with 3-kg of pure gold, was also released in 2008 to commemorate the 190th anniversary of the Russian Mint, as administered by the Central Russian Bank. Only 50 of the coins were produced, with an image of St. Petersburg on the obverse and an emblem of the Russian Bank on the reverse. It is unknown how many of these coins have made it to the “west,” but like much of the world, Russian gold imports have dropped off dramatically since late 2008.

For several years, the “investment” grade coin issued by the Bank of Russia has been the Victorious Saint George coin, with the canonized Slav shown putting a pike through a small “dragon” while on horseback gracing the obverse. The reverse is a standard double-headed eagle. These coins are also 99.99% pure gold and contain 7.78g (roughly ¼-ounce), crafted by the National Artist of Russia, A.V. Baklanov.

In addition to these investment-grade coins, the Mint of Russia has produced several larger gold coin releases, up to 1-kg, also in 99.99% pure gold. However, just like other mints around the world, demand for current and historical gold has been many times in excess of normal levels since 2008, as concerns about currencies such as the Russian ruble mount as the Moscow stock market continues to plunge, having already last about 70% of its value in less than six-months.

Buying gold bullion from a democratic Russia is certainly much easier than finding gold Soviet coins before the 1990s. While the flood of Imperial and Soviet-era coins that accompanied the transition to a more solid currency after the 1991 revolution has slowed, investment in gold continues strong from both domestic and international sources.

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Joseph Morton

March 17, 2009

Even when processed into another bar form, the gold bar product will acquire a slightly higher sale price over the spot price of gold. In the case of the massive gold bars, this is minimal to non-existent, but the interaction and processing required to make smaller bars does add to your price. However, when compared with coins or jewelery, gold bars are the most economic way to purchase the commodity. Denominations of an ounce or higher usually afford the best “price over spot.”

The most commonly traded gold bar among investors is the kilo-bar. As the name would imply, it is 1kg of pure gold. Kilobars of 99.99% purity (or higher) are sold by dozens of firms around the world. While most are in a wide and flat design that can be stacked in a safe, some larger investors request they be shaped more rectangular, like the 12.5kg “bricks.” The weight and content is stamped on the top of each bar. When buying gold bullion it is good to note that some decorative bars are not pure gold. Many gold bars for sale in Asia, Oceania and the Middle East are from crude, hand-made castings.

Often banks or mints will sell these products with their name or mark. Some companies liven up their bricks into decorative or otherwise value added products, to appeal to a wider consumer audience including non-traditional investors from newly-wealthy regions such as the Middle East, South America, Russia and Asia.

Some designs include hologram-decorated bars, design-stamped reverse bars and “Rainbow Bars” with different alloys fashioned into simple designs. Art bars and those of commemorative interest are also popular, with some even being applied in full color, as has been applied to coins since the early 1990s.

Other variations on buying gold bullion are modifications of the bar shape to be more useful. So-called gold leaf bars, gold stamps, gold fillet and gold cards are meant to be thin enough to be hidden and flexible, usually in smaller denominations. Some bars are cast into design shapes, pendants or miniatures. One Swiss company even manufactures a solid gold Bullion Watch. Other decorative shapes are meant for display as iconic sculpture, such as lucky pigs, turtles and toads.

Cast bars are normally closer to the spot price of good but, are rarely sold in denominations under an ounce. Minted bars can be made in much smaller sizes and are normally the sort used in jewelery applications or decorative items.

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Kenneth Hansen

March 12, 2009

Precious metal investing encompasses both the purchase of physical coins and bars, as well as more speculative investments such as shares in the mines that produce them. Purchasing shares in mining interests has always proven more risky than buying either physical stocks of platinum and palladium or precious metal certificates. Partly this is a result of mines being subject to the politics and pressures of individual nations, rather than being a commodity on the world market.

Both platinum and palladium mines (and their shares) have come down dramatically in price, some of them to the point of bring purchased by extremely large players. Some analysts claim that when platinum, for instance is within 5% of the spot price of gold, that a large investors begin looking towards it as a good buy, carrying the price upward with rising gold. This strategy certainly appears to be true in the case of Chinese commodity investment groups such as Minmetals and Chinalco and their purchase of Australian precious metal mining consortiums Oz Minerals and Rio Tinto.

Over 80% of the platinum mines in the world are found in South Africa, with tiny amounts to be found in the US and Canada. Though somewhat less politically or economically stable, Russia, Zimbabwe and Columbia also are home to platinum alloy deposits. This means that much of the platinum in the world is found in unstable regions, that make these mines somewhat more dependent upon the stability of the local systems to keep operations running smoothly. Nationalization of mines and violence is a real possibility in some countries, if investments are to be held for the long-term.

Platinum is used extensively in catalytic converters in automobiles. When the price is low, mines slow production considerably, waiting for the price to improve. Palladium is used in jewelery and electronics. When these markets are strong, mining operations quickly pick up to fill the need, since the use of both these metals often exceeds production in good years as were seen in the early 'aughts.

Precious metal investing in either bullion or mines is a viable long-term investment during a downturn in these commodities. Investing in mines requires significantly more research on the part of a smart investor to ensure that the companies in question are fundamentally sound. Mines that have a history of finds and well-publicized reserves that can be backed up with a history of production are often a way to hedge some of the risk associated with these investments.

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Dario Bell 

March 10 ,2009

In fact, the demand for Gold Maple Leaf coins has occasionally outstripped the ability of the mint to produce them. Though Canada itself has quite a bit of gold of its own, it is not enough to supply the increasing demand for gold Maple Leafs and still sell excess gold to the Central Banks of Europe. These banks have become desperate to back their own loans with a higher percentage of gold reserves and to put their own finances on something more solid than the fickle stock markets and poorly performing treasury-bills.

Those buying gold bullion are hardly ever made aware of where the gold for their coins or bars comes from. In the case of the Royal Canadian Mint that produces the Maple Leaf coins, only Canadian gold is used in the production of the bullion coins. Bars and other gold cons (such as the occasional commemorative series) may be minted with the foreign-mined gold. It remains to be seen whether these Canadian gold finds will be considered to be the property of Canada when scrutinized more closely.

The Canadians opened up the Kittilä mine, in the extreme north of Finland (Lappland), was constructed and managed by the larger organization of Agnico-Eagle Mines Ltd. in Toronto. After spending over CN$100 million to get the mine up and running in the frozen tundra, it just began puring its first 25-pound ingots in early 2009. With an expected “lifespan” of at least 15 years, this mine hopes to produce as much as 3 million ounces of pure gold by 2025.

Indeed, it is now Europe’s largest currently producing gold mine. Situated on the Suurikuusikko Deposit (once owned entirely by the Finnish company Riddarhyttan Resources) in Northern Finland, this strip mine is currently producing gold for the actual cost of about $300 per ounce – making it a very profitable venture for both the Canadians and investors who are interested to take advantage of the influx of concerned folks buying gold bullion.

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Arthur McGuire

March 5, 2009

With gold reaching up and over $1,000 per ounce in late February 2009 spot price and futures trading, people who had previously held parties where guests bought items, are now all about making money. Specifically, jewelers or numismatic brokers are buying gold bullion from what is lining the bottom of even an average jewelry box.

Sometimes these parties are held in conjunction with some other “recycled” commodity such as jeans or costume jewelry to replace that sent in for melting. The parties are also not limited to women’s jewelry. Buyers will often take old tooth gold, wire, contacts – as long as they are able to discern its purity. This is usually done with a hand-held tester.

Gold buying parties become a hot trend among Americans since the beginning of the 2009, when steadily rising gold prices rose well over $900 per ounce. The idea of selling old gold off for money in a pinch is hardly new. Women in India have been dipping into their considerable gold jewelry reserves during tough time for hundreds (if not thousands) of years. The record price of gold has driven the almost complete collapse of India’s gold imports in 2009, causing a considerable percentage of newly fashioned gold coming from domestic and recycled reserves in the hands of the average Indian consumer’s horde.

American women don’t realize what hoards of precious metals they have. The average piece of jewelry given as a gift (accounting for the majority of gold jewelry held in the US) ranges in purity from the less-expensive 10-karat (-k) pieces that contain less than half (45.8%) pure gold, alloyed with silver or a combination of base metal alloys for strength and durability. 14-k gold is the most common stamp seen on mass-produced consumer pieces, at just over 58% gold. Many chains, broaches and pieces meant for other-than-daily wear are made of 18-k (75%) pure gold. Some antique and very high-end jewelry is made of wholly pure, 24k gold. Bars and coins are most commonly found as either 99.99% or 90% pure.

While this trend is catching on in the US, the market for consumers to invest in gold bullion coins and bars continues to be the dominant force in the US domestic market. In fact, only a fraction of the domestic product made from “recycled” gold. And, even in areas that have been hit very hard by the economic downturn, there are still some people who are buying gold bullion – much of it in melted, purified and sold to satisfy the demand to buy bullion.

The surge in price has been noted while industrial and decorative demand has dropped off significantly. Gold bullion investment opportunities and industries related to the production of gold bullion have surged nearly 70% since the global financial crisis really got going in late 2008.

It is important for anyone arranging such a party that they pay careful attention to the credentials and practices of anyone offering to act as the broker and buyer at a gold buying party. Your buyer should be from a local establishment and provide a certified scale that is calibrated for the party’s inspection.

Guests and hosts alike should be careful that the weight an item is weighed out as corresponds to the amount the broker is buying gold bullion at. A good hostess will have purity conversion tables, calculators and the daily spot price of gold available for her guests to use in their negotiations. There are con artists who pose as jewelers and con party-goers by weighing items in grams and paying in penny-weights (over 1.5g). Other scams involve convincing guests that their items are not as pure as stamped.

While the price paid per ounce of pure gold will certainly be less than the daily spot price, the percentage “off-spot” shouldn’t be more than 15%, ideally less, depending upon whether another party performs the melting. Guests often leave with a few hundred dollars.

Remember, you don’t have to sell, and many people hold on to more valuable pieces for an emergency. It can be a great way to make some money with jewelry that does little more than collect dust or inhabit a dark corner.

Article Archive

Arthur McGuire

March 1, 2009

This does not apply to gold commemorative coins, which tend to have a higher mark-up over the current gold and silver spot prices. Proceeds from the additional monies collected from the commemorative coin program go to fun museums, the US Olympic program and zoos, to name a few. Commemorative coins that are currently available and exempt from the new, flexible pricing structures include:

• Bald Eagle gold proof coins
• Bald Eagle three-coin proof set
• Bald Eagle gold uncirculated coins

It could be said that this move has been made to simply make the mint more responsive to what they believe could be volatile precious metals markets in 2009. It could also be argued that this move has been made to discourage personal investment in gold, in an effort to keep up with demand, as they demonstrated difficulty keeping pace with in 2008.

Of course, such speculation begs the question as to whether or not the US Mint has enough physical gold to meet a strong surge in demand. The inventories are purported to have remained entirely stable for over 2 years, and many find that difficult to believe given the spike in demand.

Other mints have yet to implement such measures. Instead, a price is set for a coin at the beginning of the year it’s issued. The next minting will have a different price. Despite recent rationing measures as seen by several of the big mints in 2008, none are tagging their pricing system to the markets as the US has moved to do.

There are several reasons that gold is expected to become extremely volatile in 2009. For starters, falling prices for other ores such as copper and zinc decrease gold by a fraction of the worldwide yearly gold output that is derived as a by-product of mining those other metals. Demand has certainly soared, especially among first-time precious metal investors. Furthermore, some people believe that there are few (if any) new gold discoveries left to be made.

If the price of gold or platinum does spike, the US Mint will be ready in 2009, keeping a keen eye on gold and silver spot prices.

Article Archive

Arthur McGuire

 February 9, 2009

The overwhelming majority of prognostications from gold commodity forecasters expect that demand for gold from a wider consumer base (including some otherwise untraditional customers) will continue to overwhelm the available gold supply in the first months of 2009. Furthermore, if gold and silver spot prices should increase in the wake of continuing market turbulence and currency fluctuations, the range of people who are even capable of buying gold will shift.

The cost of producing gold was up in 2008, with increases to fuel costs early in the year blamed for a decrease in both mining and shipping of gold, worldwide. This has also contributed to the fall in gold and silver spot prices throughout much of 2008. Curiously, the rise in the gold and silver spot prices was not as steep as one might have expected in late 2008, given the dramatic increase in demand.

In response to past performance and these projections, the Perth Mint has rationed sales of gold bullion. This is actually the second time in less than 6 months that such an announcement has been made. The first one was a complete suspension of sales in late 2008.

Only the 1-ounce “Kangaroo” gold bullion coin is still being sold on- demand. While there are still several other types of gold bullion coins that are being sold from the mint, the sales of bars are presumed to be held back indefinitely. Sources at the mint say they are simply unable to keep up with the demand and want to disseminate the coins to as many people as possible.

This is significant given how much of the world’s gold supply this particular mint is responsible for producing, storing and disseminating. Over 10% of the world’s gold supply has been estimated to reside at the Perth Mint. In addition to suspending sales from the Perth mint in late 2008, sales were also interrupted at the US Mint, the South African Mint and the Royal Canadian Mint.

With their first forecast for 2009, Australia’s Commodities Research professionals predict a continuing demand and corresponding rise in the value of gold in the global marketplace. It remains to be seen whether the Perth Mint and others will be able to keep up with that demand.

Articles Archives

One of the most whimsical and collectible gold coins in the world has been the relatively recent introduction of the Chinese Panda bullion coin. These coins have, since their introduction in 1982, maintained a steady premium value, often well above the spot-price of gold in any given year.

When one-ounce Krugerrand coins were first released in 1967, they took the world of gold bugs by storm. However, the 99.9% pure Chinese Gold Panda coins that were first released in 1982 have arguably had an even bigger impact. Redesigned each year, the gold Chinese Panda coins have continued to increase in value each year since the peak year of production in 1987.

All gold bullion coins are sold at a price slightly higher than the spot-price of gold when they're released, and the Chinese Panda is no exception. While this would seem to indicate that their value to the investment collector would be lower, this has not been the case. In fact, some years of Chinese Pandas have risen significantly in value on the collectors market due to their decorative appeal and relative scarcity.

The coins themselves feature the same obverse design of the Temple of Heaven in Beijing with the obverse panda design changing each year. Produced in sizes from 1/20^th-ounce to one-ounce, they are popular as investment grade bullion and as jewelery charms. Some years have also produced limited runs of much larger coins, too, ranging up to 5- and 12-ounce Giant Gold Pandas in some years such as the famously robust 1987 “hockey pucks.”

One of the most popular incarnations of the Chinese Gold Panda coins is the limited edition proof sets that are issued most years. While the price of these sets has been quite high in years that featured the Giant Panda coins, most years feature five coins in a commemorative lacquered box with one-ounce, half-ounce, quarter-ounce, 1/10^th-ounce and 1/20^th-ounce denominations. The demand for these sets typically outstrips production in any given year, though sets from previous years often turn up at coin collection shows.

In addition to the Chinese Gold Panda proof sets, there are sometimes special commemorative gold bullion coins released in many years. These coins are also highly prized by both numismatists and investment collectors, alike. Indeed, they are so hard to keep in stock that shops carrying them have often reported lines out the door as soon as they arrive. Especially popular recent sets include the three different 2008 Beijing Olympic Games sets.

New developments in minting technology have produced commemorative coins in bi-metal (gold and silver) designs and even holograms, as was seen in the 2004 commemorative set of the 50^th Anniversary of the National People's Congress. Other popular commemorative sets include a full-color commemorative gold coin depicting the classical Chinese tale of the Monkey King.

The future of the Chinese Gold Panda coins appears strong, though production has fallen since the 1990s. In fact, due to increased domestic demand, fewer Gold Pandas make it to the international marketplace each year, with stocks of one-ounce coins running out entirely for most suppliers in late 2008 when gold bullion demand rose dramatically.