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PRECIOUS METALS: A SOLID INVESTMENT

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Gold and silver have always been extremely valuable commodities since the early days of civilization. Precious metals should be an important part of any investment strategy, and being informed is key in knowing how and why you should invest in gold or silver bullion.

Reasons People Invest in Precious Metals

Diversification – Virtually no investment advisor will ever tell you to put all of your savings into one thing, whether it’s one stock or one precious metal. Diversification helps reduce risk by ensuring that if one of your investments were to falter, you’d still have a majority percentage of diversified investments that were unaffected or even increased in value.

Mitigate Systemic Risk – Physical gold or silver will never turn you away at the ATM. There’s no electronic or paper documents or account values that have to change hands in order for you to benefit from it. Many gold investors get a bit of peace of mind knowing that should the electronic banking system ever fail, they’d still have physical assets of value.

Hedge Against Market Trends – If you’ve paid attention to the price of gold and the market for the past several years, you’d notice an inverse relationship between gold and equities. Many believe this is due to the inherent nature of people to shift their investments to hard commodities because they know the commodity is more likely to retain its value regardless of market instability.

Gold

  • Gold is extremely durable because it does not rust or corrode, and is also able to conduct heat and electricity. It also has several practical applications such as for jewelry, electronics and dentistry.
  • Gold is also a highly sought-after commodity, and its value is determined by the market 24 hours a day, although it tends to stay pretty steady over time. The price of gold is influenced by demand as well as perceptions of the overall economy. Typically gold is more valuable when the economy is less stable.
  • Most trading for gold is based out of London, and investors favor it to hedge against currency risks, inflation and geopolitical risks, as well as diversification of portfolio purposes.

Silver

  • Silver is also a valuable commodity, but the silver market is more volatile than gold. Investing in silver can be treated similar to equity trading where the buy low, sell high principle applies.
  • Silver is very tangible as an industrial metal and was formerly used in photographic film, and is currently used in medical products and batteries among other things.
  • Silver bullion bars can actually be bought or sold at major banks in countries such as Switzerland and Liechtenstein.

Bullion

  • By definition, bullion is gold or silver that is at least 99.5% pure and is typically in the form of bars, otherwise known as ingots. Unlike coins, bullion can be somewhat expensive to store and insure.
  • This type of precious metal is traded on the bullion market which is characterized by a high trade volume done electronically or over the phone.
  • The word bullion derives from the French Minister of Finance Claude de Bullion, who served under Louis XIII.
  • The world’s largest gold bar weighs in at 551 pounds and is worth approximately $10.33 million.

Gold and Silver Bullion as an Investment Strategy

Bellevue Rare Coins buys and sells gold bullion and silver bullion as well as other precious metals, coins and jewelry. Whether you would like to raise some cash by selling your precious metals, or invest in your future with gold or silver, the local, trusted experts at Bellevue Rare Coins can assist you.

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