Three Ways of Buying Gold

1. Physical Gold

However, gold traders do not give up their gold trading secrets just for the asking. Read how flecks of gold are taken from some rivers..

One of the main problem of buying gold is storing physical gold. Where do you store gold ingots, for instance?

Buying antique gold jewelry is one way of getting around the problem. I mean, how many people do you know that don't like wearing jewelry? Sure beats trying to work out where to store Five gold bars!

Storing physical gold also involves liabilities and also expenses, such as in storing gold bars in bank deposit boxes, and vaults.

Another big problem here is that many investors who buy gold do so believing that it is the one asset which is no-one else's liability. Wrong! Wrong! Wrong!

There is a nasty legal subtlety which causes some gold buyers to hold onto gold in such a way that achieves the exact opposite, exposing themselves to a hidden risk, exactly the same risk they were trying to avoid in the first place.

Just look at the Gold Facts!

Good old common sense will also tell you that money can't belong to a saver and his bank at the same time. It's a well established law that money deposited in a bank becomes the bank's property and its liability.

Simultaneously it stops being the saver's property and becomes the saver's asset. Meaning, that if a bank fails the saver must stand in-line with the other creditors and maybe accept a few cents on the dollar (although governments in some countries offer depositor protection, which might reduce the loss).

In the current economic global meltdown, it's well worth knowing that there's a critical difference in how gold buyers are perceived and treated as Account Holders.

The two types of account holders are: CUSTODY and ACCOUNT. They have similar sounding names in the gold market. In the gold market these treatments are called ALLOCATED and UNALLOCATED storage.

2. Gold Contracts

3. Gold Shares

For example, some gold mining companies may have excellent gold reserves or gold and mineral reserves but may not be managed very well. Or on the other hand, the gold mining company may be very well managed but not have good gold reserves.

Extra Gold Market Intelligence Tips

1. Gold is held in bullion form by banks. Banks use physical gold as an instrument of currency for covering losses and moving their own currency around. For example, if the currency is weakening, the banks may be selling their gold off.

2. The price of gold is "fixed" daily and can move in unexpected directions.

3. Antique Gold Jewelry is physical gold jewelry you can wear; Antique Jewelry doesn't cost the earth.

Have You Seen the Jewel of the Month Yet?

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