Gold Investing: A beginners Guide to the Gold Market
January 16th, 2008
The first part of investing in gold will be understanding the price of gold and what effects the price of gold. The price of gold is set by a benchmark known as the London Gold Fixing, a twice-daily (telephone) meeting of representatives from five bullion-trading firms. Furthermore, there is active gold trading based on the intra-day spot price, derived from gold-trading markets around the world as they open and close throughout the day.
Today, like all investments and commodities, the price of gold is ultimately driven by supply and demand, including hoarding and dis-hoarding. Unlike most other commodities, the hoarding and dis-hoarding play a much bigger role in affecting the price, because almost all the gold ever mined still exists and is potentially able to flood the market at the right price.
Given the huge quantity of above-ground hoarded gold, compared to the annual production, the price of gold is mainly affected by changes in sentiment, rather than changes in annual production.
Investors mainly buy gold as a method of diversification, while others might buy gold for emotional reasons like fearing a depression or supporting a political ideal.
How to Invest in Gold
There are several avenues for investing in gold: gold coins, mining stock, Gold ETFs, certificates, gold accounts, and options or futures.
Related posts:
- Buying Gold Coins for Beginners
- Market Vectors Gold Miners ETF (GDX)
- Why is Gold Going Down in This Stock Market Panic?
Entry Filed under: Investing | Tags: gold investing
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4 Comments Add your own
1. GoldBug’s Blog &raq&hellip | January 21st, 2008 at 7:45 pm
[...] Gold Investing: A beginners Guide to the Gold Market – An article from The Gold Gazette detailing how the price of gold is set, other basic info for gold, and how to begin investing in gold. [...]
2. Bob Tinner | February 29th, 2008 at 2:15 pm
Another great way to invest in gold is through the countries that produce them. The largest producer of gold is Australia. Trade the forex market and make money from the large growth. Learn to trade with free forex tips. Thanks, Bob.
3. Edward H.C Graydon | December 6th, 2008 at 1:51 am
Bob! I would like to know; what are you talking about. You are either a broker; or you just have maybe been misled; there is no way that I know of to make money that way and I am really very connected in the game
Edward H.C Graydon
4. Adam Doolittle | December 6th, 2008 at 4:05 pm
I think “Bob” just had a Forex website to push, but forgot to include, or the admin spammed it out.
Thanks bob,
~Adam
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