Mankind’s love affair with gold stretches back to ancient civilisations, from the Egyptians to the Romans and on to the Incas and the Aztecs. Wars have been fought over it. But despite our preoccupation with it, gold is incredibly rare. If gathered together, all the gold ever discovered would occupy only a 20-metre cube!
Investing in Gold
Gold bullion is gold that has been made into bars known as ingots. It is mostly used for investment purposes because of the precious metal’s ability to retain or increase its value over time. When buying gold, small time investors are better off purchasing gold coins as they are easily tradeable. Examples include the American Eagle, Canadian Maple Leaf, Austrian Philharmonics or the South African Krugerrand. Investors should avoid sovereign coins from lesser known countries and special edition coins as these are harder to trade.
Bullion bars are really for larger investors, and gold in this form is either purchased as a physical product or in the form of certificates from exchange traded funds (ETFs). Obviously, buying the physical product is the safer option, as with an ETF, you don’t actually own the metal.
The Real McCoy
Gold is one of the least reactive metals. That’s why it is used for fillings in our teeth. So, dropping some nitric acid on it will not cause any reaction. A test you can perform at home, though not as reliable, is to smear your forehead with liquid foundation and then rub the piece of gold across it. If it leaves behind a black mark, it is most likely real gold. Weight is often a tell-tale sign. Gold is very dense and so, quite heavy. It should sink in water. Fake gold will float. To be totally sure though, the piece should be professionally appraised.
Gold bullion can be a great investment but you need to be confident that you are dealing with a reputable dealer. eBay has many certified dealers. Check them out.