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Investing in precious metals when the price is high

High precious metal prices are definitely not one of the situations where you should be making your move and investing in them. The reason why that is the case is because of the fickle markets which could cause you to not lose money, but just wait for a long time on any kind of positive return on the investment. Majority of us have thought about making investments in precious metals, and if you have been thinking about it, and you maybe even decided to invest your money, the least you could do is make sure that you do it properly.

First let’s make one thing clear, when you are investing in precious metals, do not think that what we’ve said just now means that the precious metals could somehow lose their value completely and that you won’t have any kind of money at all. That’s not what we were saying. What we are saying is that precious metals do have its ups and downs, their value oscillates with the markets and if you’re not careful enough, you could end up with a not so very favorable purchase, which is something that is possible and could happen.

Buying precious metals when their price is high is not a good idea. After you do something like this, you’re gonna end up with an investment that’s very expensive. One of the reasons why you should be interested in precious metals when their prices is low is because if their prices was high and has come down, the chances are good that it has the capacity to go back up again. That’s precisely the reasons why you should be doing this type of investments in precious metals when their prices is low.

A lot of you are now probably wondering how can we know when the price is slow, well one way of doing it would be by checking to see just what kind of history the price of the precious metal that you’re interested in buying has. For example, if you were looking into gold, it quite recently experienced an incline in it’s prices and investing in it now is quite a bit more expensive than it was a few months back. One of the things that you could say about the investment would be that it’s gonna be more expensive now, than in the past.

So should you be investing in gold now, when the price is so high? Well there are some people who say that you should, another thing that you need to take into account would be what’s being said on the market about the behavior of a certain precious metals, for example you need to check to see just what kind of things people are saying about gold, if it’s gold that you’re planning to invest in. The reason why you should be careful, because if you’re not, the money that you’re investing in could be tied up in the investment for a long time if it goes down, so be very careful when investing in precious metals when their price is spiking, it could mean that you’ll wait for a long time before masking a return on the investment.

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Why having a precise weight scale is important when dealing with precious metals

Mass of the precious metals that you are investing in is very important, because with gold, if gold is what you are investing in, is very expensive. I’m sure that this is not something which you haven’t heard before, pretty much all of the precious metals that exist are very expensive, they are so expensive that even the slightest discrepancy in the size of the precious metal that you are investing in will cause you to lose money, so make sure that you have precise weight of the precious metals bullion bars and coins when you are investing.

Majority of professional precious metal investors are gonna be straight up and not try to cheat or scam you in any way. But if you happen to come across some shady dealers, and just because they offer you lower prices for the precious metal that you are interested in investing. In those types of situations you have to be very careful about what kind of weight the coins or the precious metal bars are gonna have.

Best way and pretty much the only way of how you can weigh the precious metals precisely when you’re buying them would be by using a scale, but not just any scale. Best type of scale that you can use would be a digital scale, which can read out the weight of the items without us having to determine where the scale is, which is what we would have done with old “analog” scales. Digital isn’t the only thing that the scale has to be in order to be good.

The second thing that you need to make sure it that your scale has is accurate. Scales which you should be focusing on the most would be the ones that have grams, in other words the ones that can measure as smaller unit of weight as possible. It would be preferable that you find a scale that can measure miligrams, since it can come in handy when you for example need to measure the damage of testing.

Next to the danger of being cheated with lower weight of the precious metal coins or bars that, excessive testing could also cause problems where miligram scale could come in handy. One of the most widespread ways of testing for the authenticity of precious metals like gold, silver, platinum and palladium would be scratch testing. As you may have noticed we did say that these are scratch tests, and in order to test precious metals like these they actually have to be scratched.

Precise scale here is very important because it’s gonna allow you to check just how much of precious metal weight has been lose due to scratch testing. Even though to actually lose a gram it would have to be some very rough tests in order of the precious metal that are being tested to be affected by the entire processes. With a precise digital scale you can check to see just what kind of weight the precious metals which you are interested in buying have. Next to quality testing, making sure that the weight of the precious metals that you own and are interested in owning really is what you and the seller have agreed it will be, only then go through with the sale.

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Investing in precious metals: is it better to do it on your own or to use a broker?

Precious metals are one of the best ways of how you can spend your money, any excess money that you happen to come across after selling something or after inheriting money, which is something that’s a far more possible to happen. The main account of precious metals will be used for gold and pretty much everything else that you can see for all the other precious metals will gonna gonna into this mix. Radios are a great way of how you can keep up with news, and being informed about the precious metals which you have invested in very important, unless you are using a broker.

Most people will use a broker, a third party which is gonna do everything for them, and the just need to get paid the excess caused by the change in the price of the precious metals that was invested. One of the main drawbacks to using a third party broker would be that you don’t have to worry about any of the work from actually finding the bullion or jewelry of the precious metal that you’ve decided to invest in, to actually taking care of the investment, dealing with gold, silver, palladium or platinum gold bar and coin. Storing and so on. If you actually decided to take are of the cube somewhere else.

The drawback of using a third party middle men would be that they are gonna take a cut of course. Given that in the world today there’s no such thing as free, there’s hardly anything that you can come across that’s gonna be free, so if you are interested, a certain fee is gonna have to be paid to the middle man. This free will of course not be something overly expensive, but it does exist, and if your not careful, it could eat up a lot of the profit that you make off of the precious metals.

Managing the precious metals investment on your own also isn’t something that’s very easy, but if we are talking about maximizing the profits, then you need to make sure that you invest on your own. Inform yourself about all the ins and outs of investments and then once that the time actually comes to make an investment, the markets are favorable for investment, precious metals are acceptable, then do it, buy low, sell high and make a profit, it’ll be more than when using a broker, if done properly of course.

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Why you should only invest 10% of your portfolio into precious metals?

One of the most frequently repeated things in the world of investors would definitely be the saying that precious metals are incredibly safe thing to invest in, and that no matter what you do you should always make sure that some of your investments are tied to precious metals. The actual rule goes, and it is a rule according to some, that you should have at least 10% of your money, or your investment portfolio tied to precious metals like gold, silver, palladium and platinum, while the rest should be invested on other commodities that are available out there.

A lot of people are confused with this number, after all, if precious metals really are such a catch and they are a good thing to invest in, why is that when someone wants you to only invest 10% of your money, instead of for example all of it? Well the answer to this question is a bit more complex, and it requires you to know about some basic relations between precious metals, and its relation to the economy, because believe it or not, everything is connected, everything has effect on everything in today’s economy, the same thing is true for precious metals.

We’re gonna be talking about gold but the same thing that we’re gonna be saying about gold is completely the same for pretty much every other precious metals, not that there are that many of them. Gold investments are a very smart thing to do, primarily because of inflation. Many people thing that investing in gold is a good thing because of profits that they are gonna make, and while that is true, as of recently investing in gold has shown to be the most effective ways of how you can preserve the value of your money.

As majority of you on the east coast probably know, investing money in things like the cars, or houses simply does not guarantee any kind of security of your money. Nature can come in every day and take it’s toll. If you had for example taken the same money which you’ve decided to invest in an additional car or in house extension, you would have ended up with owning gold, for example. Now with gold your money would be more secure than if you had become an owner of a car, but there is a such a thing as owning too much gold also, and it could affect the time it takes for you to make a return on your investment.

For example, take note of the fact that the price of gold has halved significantly a few months ago. It has gone down for over 100$ per troy ounce, and if you had tied all of your money with the investment into gold at that higher price, the one that was right before the drop, well then you would either have to leave that investment to sit there and wait for the gold price to recover, or start selling gold at the lower price and actually start selling at a lower price. Same situation is pretty much now.

Currently the price of gold, and pretty much every other precious metal is high. If you used up your entire investment money into a precious metals, and the price of it goes down right after. You can’t count of any kind of quick money off of the investment. And considering in what kind of world we’re living in, making quick money is a must. That’s why it has been suggested that you only invest with 10% of your money, and that if you are going for more, that you prepare for waiting for a return on your investment a bit longer.

Fickle prices that precious metals have, it’s the main reason why you can never rely on precious metals for s quick and stable investment, but then again isn’t the same thing true for everything else? Pretty much every stock bears a certain risk, sure you can minimize that risk, but you can never be entirely sure. Same thing is true with gold and other precious metals, only since it’s such an expensive investment, the markets are warning up to be careful, so be extra careful, and if you know what you’re doing, you don’t have to abide the 10% of the investment portfolio rule.

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Is there Canadian Maple Leafs made from palladium?

Next to platinum, gold and silver another metal which is gaining more and more popularity would definitely be palladium. It has a lot of similarities with platinum, which is no surprise considering that they are parts of the same precious metal group, the platinum group of metals. The difference between platinum and palladium would first be that palladium is a lot lighter metal, it does not have a very large density, and also, there are differences when it comes to prices, which can be noticed if you check the current spot prices of these metals.

Popularity of palladium wasn’t that big, not until recently. The same scenario happened with platinum. When these two metals were found, people even initially thought that they were worthless, because of the fact that they are very similar to silver, they share the same color, because of this platinum wasn’t really regarded as something special, not until the science was developed enough to discover all the different useful uses that both platinum and palladium have. Russians knew that these metals are valuable, they had mines of them which were working and extracting palladium even when people didn’t think that they are worth a lot. Now these supplies are known as the big Russian palladium secret, because it is. In order for the market to develop the prices of palladium to their liking, the Russians have made the amount of palladium a secret. If they say they have millions of tonnes, then the price isn’t exactly gonna be around 700$ per troy ounce like it has been up until now.

Mints have been picking up on the production of coins made from palladium, and if you are interested to know if there are any Canadian Maple leaf coins made from palladium, you’ll be lucky to find out that there is. They were first started being minted back in the 2005. Those of you who are interested in buying them, can look up these types of coins and invest in them just fine. Royal Canadian Mint has made the usual Palladium maple leaf coin and they are now available for purchase by the various different precious coin sellers from around the world. Canada isn’t the only country which is offering these types of coins. Other countries are offering them as well, well at least countries which have some kind of production of these coins.

Investing in palladium now is very good idea, because the future of this precious metal looks very interesting. It’s more than likely that the price of it is gonna increase several times, making itself equal with that of platinum. Take note of that there’s actually less palladium in the world than there is platinum, so there’s a lot of room for the price of it to go up, even higher than what the platinum price was.

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Crisis in the European Union and the future of precious metals

More and more countries from the European Union is starting to have problems, and this is something that more and more people who are interested in dealing with precious metal should take note of. The reason why people should take note of that is because of the fact that a lot of people are not turning away from the usual investments in stocks or gambling on currency, and they are actually switching to investment in precious metals, most notably gold, whose price is expected to rise on the winds of the economic troubles in Europe.

Even though media has been quieter recently when it comes to Greece, Ireland and Portugal, things are not going that great over there either, and the question is how long will there be before the next big crises hits the EU. Prospect of another Greece type situation that is looming over Europe is causing investors to once again start switching their investments away from economy and into precious metals, which are offering a lot more security, they are a lot less risky.

Recently we talked about the prospect of precious metals prices decreasing on the news that the economic situation of the world is improving. Since the Greek crises has been dialed down, the investors found more confidence in the European economy and have started to invest more in stocks, businesses but chances are good that due to the latest developments in previously mentioned countries, things will have a turn for the worse once again and that’s why platinum prices are already on the rise, while that of gold has stopped its downward trend and is not flatlining.

Maybe there’s a chance that crisis in Spain will not be as bad as that in Greece, since the situation is different, economy is stronger, just a few years ago Spain had budget surpluses, but in case that EU will be forced to bail out Spain, or do something similar to it, like it was done with Greece, and if after Spain Portugal starts suffering from the same symptoms, well then that could mean a rise in the prices of precious metals, all of them. For now the things are not bad enough to be causing more significant changes in prices, and our previous predictions of gold hitting the 1000$ low might still come true, but all this depends on how things play out in the EU. Bailing out of countries like Spain and Portugal would be a big strain on economies that are currently on the road to recovery like Germany and France which are responsible in part for the recent reports that the global economy is showing signs of slight recovery.

If those countries were hit with another burden, which will be considerably bigger than that of Greek bailout, then their economies will also experience a turn for the worse, they will show negative figures and once again precious metals will be the safe haven for investors. That means another price hike up. The only question which remains is when will the situation escalate for this to occur, maybe this will be the thing to cause gold to cross over the 2000$ per troy ounce mark, but that is predicted to happen at the end of the year, will by then gold go down? In any case if you are a precious metal investor, don’t make any major decisions for now, and see how things play out.

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Why funding precious metal deposit search is important for investors

Each day we are facing with less and less precious metal which are available for extraction from the Earths crust. For this reason looking for precious metal deposits is of the utmost importance because in case of a situation where no new discoveries are being made of the precious metal bullion, well then the situation is gonna be horrific, horrific for the price of precious metals that is, and if you are an invest, this is something you should take note of, because it’s very important to do so.

The impact of the explorations going bad or not happening at all can be noticed on two different levels. For example when a mining company invests money into exploration of new precious metals deposits and fails to find them, well then there will be an increase of the price of gold, but the stock price of the mining company will not experience the change in the price of gold, in fact it could be that the price of stocks will have a nose dive because they’ve squandered their investments and got nothing.

When the price of gold is low and is decreasing, well then the profits of the mining companies are not that great and they are not in the position of spend some of their profits for exploration, they have to cover costs of current production and everything that’s related to it. As an investor you can use the news about cuts in exploration as a sign that the price of gold will be on the rise, but also as a sign that the current price of gold, the price that has been leading up to the decline in the amount of funds being used in search for new deposits, that that price is low and it’s a good time to be buying gold.

When you look at the mechanisms which are behind these kinds of precious metal price fluctuations you’ll see how tightly everything is connected and how as an investor you have to monitor a lot of different gears, wheel and what not in order to stay afloat and make a profit. Low price of gold can be caused by a lot of different things, sometimes even good things, for example, thriving economy can cause a decline in the price of gold.

Considering how costs of the production are only getting higher when you take into account that it’s necessary to dig deeper in the ground for precious metals and larger amounts of ore have to be processed, it’s not that far fetched for cuts in exploration to become a reality, because mines will probably wanna stick to what little profits that they have. Once the news about this predicament that the mines have reaches markets, there will be an increase in the prices and once again the mining companies will be in the plus, given enough time, and new exploration can start once again.

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Should you use risk capital when investing in precious metals?

Every day there’s more and more people who are deciding to invest money that they’ve saved up for the possibility that they’re gonna make more money, or at least protect the money that they have in their possession against inflationary effects that currencies always endure. Those who are dealing with precious metals on a regular basis are probably familiar with the fact that precious metals are a pretty safe thing to invest in, but there are certain situations where you can find yourself waiting for a decent return on the investment for quite some time, which leaves people wondering should they be using their risk capital money when investing in precious metals?

Those who are not familiar with what exactly high risk capital actually is, it’s basically money that you can afford to loose. In today’s economic situation, majority of us don’t exactly have money that we can lose, but there are some who have saved up and would like to spend some of that cash because they do not depend entirely on it, and gambling with that money on stocks, especially high risk stocks, could mean very large returns on the investments, if they manage to succeed of course. High risk stocks are known to be a gamble, they might go up or down, and every little aspect about the company behind the stocks could influence the prices of the stock, or even their existence, if the company goes south and bankrupts.

Facebook stock for example was a very risky thing to invest in. A lot of people have been warning that the stock was overpriced, and that as soon as the hype over the stock when it was released settles down, the people who invested are gonna lose their money. Now it turns out that everything what was said about the stock was true, price did go down practically immediately after the initial sale, and it’s a huge unknown when or if the it’s gonna go back up to the price that it had when it was released. That was a great example where people should have invested their risk capital, because if by some chance you haven’t, things don’t look good for you, price recovery isn’t going that well, and it doesn’t seem that it’s gonna recover any time soon.

Novice investors often wonder should risk capital be used when investing in precious metals, if they are gonna end up without making a profit or for that matter without getting back their investment, is it possible to lose it all? Well if you are investing solely in the bullion in actual metals that you can hold, then the only danger of losing your money that you can come across would be that you accidentally buy fake precious metals. Something like this doesn’t happen too often, but in some situations like for example when someone buys bullion from shady dealers just to save money, seeing how they usually have very low prices.

There really aren’t any other situations where precious metals like gold could lose their value completely and you to lose your investments. The only other major turn off that gold has for investors, at least those investors that are only interested in making a quick profit would be that they are gonna have to wait for returns on investment in precious metals a bit longer than with stocks. Prices of gold for example have been known to have down periods, and if you invested prior to it, prior to the price decrease, you’re gonna have to wait it out for the price to come back up if you’re interested in making a profit from your investments.

This situation, where the price drops is the only situation that could be causing problems to you as an investor. Precious metals are a scarce commodity, they are not gonna be abundant any time soon, not unless the plans of the alchemists or turning base metals into gold come to a realization, which has slim chances of actually happening. What you should be expecting is that the return on the investment takes a bit longer, if you invested during times when the price was high and after which it went down. So out of fear of losing your money, you don’t have to use risk capital for investing in precious metals, because you won’t lose your money, as long as you follow what we said about buying precious metals from reputed sellers.

If you start gambling and buying bullion bars and coins in places that are not very well known, just because they have lower prices there, well then chances for something going wrong increase dramatically. What you should be doing in buying only from reputed sellers, like OC Cash for Gold. Leave any risk capital, money that’s not vital for your existence, leave that for when you hear a good tip on a stock and invest it there. It’s possible that you make more money than you would investing in precious metals, so it’s worth the gamble.

Precious metals are a rock solid investment, when compared to everything else at least. Note that the precious metals are being placed by people in their retirement funds, which just shows you how secure of an investments they are, so you don’t necessarily have to use risk capital for precious metals, since there’s not much risk involved about investing in them. We are of course talking about investing in tangible precious metals the ones that you can hold in your hand. Other types of precious metal investments that exist out there like for example investing in precious metal stocks is a whole different story and there you should use caution like you do with any other stock, since precious metal stocks being traded on the stock markets can sometimes be stocks of mines, and if they run out of precious metals, if they cannot find new deposits, the stocks will lose value and you might lose money. There you should use risk capital, but in all other situations, you can invest in precious metal with any capital that you might have.

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Protect your savings – invest in precious metals

Money or currency is a mechanism that’s been created by the governments and accepted by the people as means with which it’s possible to transfer the value of goods and services into other types of goods and services, money is the middle man here, basically. This would be the main definition of money, more or less, and in theory this type of system works fine, you create one type of goods or services, you get paid for these goods and service with money, which you then use to purchase different types of goods and services, different from the ones you produce. If someone is producing apples, if they want pears, they’re gonna have to sell apples to get pears, or maybe not if both parties would be willing to participate in direct exchange.

I said in theory this type of system is good, because in reality there are a lot of ways of how things can go wrongs very bad, very bad when it comes to the fact that the government is in the control of printing the money, well more precisely central banks. Before the seventies, money was being backed by gold, which meant that at any given moment, you could have walked up into a bank and asked for your money to be exchanged for gold. Even though you could do the same thing now, in some banks at least, you are not exchanging money for gold, you’re buying it, and if you look at the prices of gold before the seventies when money was still being backed by gold, you’ll notice that the value of gold has gone up, it’s gone up quite a lot actually.

One of the reason why the value of gold has changed so dramatically would be because of the fact that money is no longer backed by gold, which is what changed during the president Nixon’s stay in the White House. Now money is backed by the total amount of goods and services which are being produced in a country. New money is being created basically when someone needs it, they then decide to take out a loan in the bank, and then the money will be created to suite that persons needs for it, because it’s thought that the person is gonna create new goods and services into the economy, or at the very least spend the money and bring profit to other shop and factory owners by buying their products.

In times of crisis and even generally when the economy is good, newly created money doesn’t have any kind of value backing it, because as you know the total number of goods and services not only that it is not increasing, but it’s actually going down. Factories are closing their door, and the service industry is also going under, because people don’t have money to spend like they did before on the count of them not having any jobs. So in essence not only that the total number of goods and service didn’t go up, it actually remained the same, and all that newly created money has no reason why it should exist.

During our last crisis, when the banks and the insurance companies went under, the situation was even worse, it was made worse by the fact that government bailed out the fallen institutions, and it bailed them out, you’ve guessed it, by printing more money which had no coverage. What happened at times like these is that the overall value of existing currency tanked, became there’s a lot more new dollar which are being created, whose value will have to be covered by the existing value of goods and service within the economy. Money will then be worth less, since there’s more of it covering the same or even decreasing values of goods and services. What this means is that the shop owners and those who are producing goods, they they will be forced to increase the prices to cover the dwindling value of the dollar.

Gold is a great choice in situations like these because gold will not be losing its value, the value of gold will change with the, because it has a very high demand as a commodity and also because its scarce. The same thing that applies for merchandise in the convenience store goes for gold, gold dealers will be increasing the prices to protect the value of gold against inflation, so if you own gold, the value of it is gonna change not only because of the laws of supply and demand, the relations between the produced amounts of gold and the amounts which are consumed, but also because of the inflation. This makes gold and all the other precious metals a very wise thing to invest in.

If you are only keeping money in your bank account or in your “stocking” at home, you are actually losing money, because over time, prices of everything are gonna be increasing and you are gonna end up being able to buy less with the money that’s in your possession, less than what you would be able to buy normally if the prices stayed the same, if there were no inflation.

For the same reasons, it’s very important that when you do decide to liquidate your precious metals, when you decide to sell them, you need to make sure that you do that at the right time, do not sell them and then wait for a long time to spend the money. If you wait for too long, a couple of years, inflation is gonna do its bidding and you are not gonna be able to buy the same amounts of the goods and services that you would normally been able to buy. Whatever it is that you decide to do, make sure that you have at least some of your assets entangled into some kind of precious metal, and by entangled we are referring to having it invested in gold, silver, palladium or platinum, because these metals are gonna hold their value through all the economic problems that we have or may face in the future.

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Are precious metals good wealth?

Disclaimer: the following article has been contributed by one of our users. Please treat all blogs on our site as entertainment with the intention of encouraging opinions and feedback from our visitors. DragonCoin™ does not and cannot provide investment advise. Past performance of an asset class is not indication of future returns on investments.

Many people don’t realize this but there are actually differences between wealth, you can have good wealth and you can also have bad wealth, and if you’re wealthy but not careful enough to know about the differences that exist between these two you’re gonna end up losing money, a lot of it actually, depending of course what kind of wealth exactly it is that you have.

As an example of bad wealth, let’s have a look at real estate. Now don’t get the wrong, some real estate is good wealth, but not all of it, and banks learned that just before the real estate bubble that burst back in the 08. What happened then is that the overall value of the housing tanked, millions of homes was foreclosed and the market was overflowed with an influx of new housing to buy, while on the other end the number of people who were interested in buying the newly available housing was lower than ever before.

At the time, a lot of other people who have invested in housing development also lost money, lost their wealth that they had invested in these commodities. When they invested money into housing, they transferred their wealth into this particular investment, and they gambled if this investment is gonna be good or not, hence they had either good or bad wealth.

Precious metals are always a good thing to invest in, they are one of the rare things that in fact are good wealth, because they will not lose their value entirely. Price might go down for a certain period of time, but it’s gonna go up very shortly after it falls, that’s why it’s said that gold is a excellent store of value. A gold bar or a gold coin will not go bankrupt, the government won’t be needing to bail out gold, the only thing that government can do it take your gold, but that’s a whole different story. If you’re interested in persevering your wealth, invest in gold.