Best Gold IRA Company

Best Gold IRA Company

Do We Need A Certificate Of Authenticity For Gold Coins?

A popular question among those who want to invest in gold coins is that related to the presence of the certificate of authenticity.

Although there is a general association among the population between the guarantee of quality and the existence of the certificate of authenticity, when we talk about coins the situation is a little different. There are many factors that determine the valuation of an investment product, but the existence of the certificate is not one of them.

The main confusion regarding the connection between the quality guarantee and the certificate of authenticity may come from the fact that some investment gold dealers issue information sheets with product characteristics. These information sheets may be mistakenly perceived by customers as a certificate, but in reality there is no such document.

Who Issues The Certificate Of Authenticity For Gold Goods?

You can only get a certificate of authenticity if the product is provided by the manufacturer, refinery or mint.

Therefore, no investment gold dealer issues a certificate of authenticity. In addition, the certificate is issued based on a serial number, and the coins do not have one . If there is no serial number against which a certificate can be issued, then the certificate in question can have no value simply because it cannot be associated with the specific product.

All investment bars cut from 1 to 100 grams are placed in vacuum packs with a unique certification number, which corresponds to the number of the bar. Molded bars of 250 grams and 1 kilogram also have such a number, but in most cases they are not placed in special packages.

The only coin series that has a certification number is the Canadian Maple Leaf 999.99 . In recent years this series has been marked with images portraying different animals.

How To Verify The Authenticity Of Investment Gold Coins

Investment gold coins are characterized by thickness, diameter and weight. Of course, these features vary from coin to coin. So, if you want to buy or sell the gold good, the verification of authenticity is based on the analysis of thickness, diameter and weight.

Specifically, if you want to sell such a product to an authorized gold investment dealer, he will compare the three parameters to assess the authenticity of the product.

The manufacture of the product is a very important criterion, which also cannot be overlooked in the process of evaluating a specific good. For example, even the best counterfeit, although close in weight (obtained by removing parts of the coin’s edges) to the original, may be distinguished by other characteristics related to fineness.

Moreover, the production of investment products is extremely precise, detailed and refined which makes it extremely difficult to copy. So, the probability of the existence of a counterfeit product identical in all respects to a genuine product tends to zero .

These are the criteria that should also be checked when buying gold coins. Furthermore, it is your right that when purchasing a gold good, you request that it be placed on a precision scale. In this way, the weight of the coin is visualized and, depending on the specifics of the product, the value obtained is compared with that of the catalog.

The complex of these factors guarantees that the chosen product is genuine – when a coin matches the weight, diameter, thickness and quality of the work, you have no reason to worry.

Valuation of Gold Coins When Redeemed

As we have already explained in the lines above, the valuation of gold coins at redemption is based on the weight, diameter, thickness, workmanship and appearance of the product.

Investment gold coins are a minimum of 21.6 carats, corresponding to the 900 sample.

The higher the gold content of the coin, the softer the gold and the better the workmanship. This aspect is of great importance and is one of the factors that determine the authenticity of the coin.

When you want to sell a coin, the valuation process goes through two stages:

  • first, the authenticity of the coin is evaluated according to the weight, thickness, diameter and quality of the work ;
  • then, the commercial condition of the product is checked : if it is damaged, acceptable, or if the coin is in the package in which it should be – depending on the purity of the gold in the selected product (sample), there are different ways of recommended storage, as well as specific ways in which products arrive from different suppliers and are offered to customers for sale.

Note that investment coins are mainly divided into historical coins and modern coins.

The main difference between the two types is that historical coins were in circulation and most often sampled between 21.6 carats and 23.6 carats (or between 90% and 98.6% gold content). Regardless of the category to which a coin belongs, it must always correspond to its weight, diameter and thickness. The main difference is that with historical coins, minor damage is allowed due to the fact that they were already in circulation and therefore subject to wear.

Is Jewelry An Effective And Profitable Way Of Financial Investment Or Not?

In everywhere, jewelry was often seen as the best method of saving, this perception being reinforced by their presence in numerous wealth declarations of some public figures. When did this trend appear? During the communist period, when people did not have access to official offers of precious metal ingots, and buying gold jewelry was the saving option they were allowed. Moreover, the communist regime also had a campaign to confiscate and redirect to the National Bank the gold held by individuals.

What you need to know about the price of jewelry

First of all, if you want to look at jewelry as financial investment tools, you must know that the profit is obtained only if you will buy the respective jewelry at a price much lower than its value. Additionally, to properly value jewelry, you need to convert the alloy weight to the gold weight. This is because pure gold is very soft and different gold alloys are used instead. For example, 24-karat gold contains 100% gold, 18-karat gold contains 75% gold and 14-karat gold – 58.5% gold.

Returning to the price of a piece of jewelry, it is established starting from the price of the precious metal and that of the precious or semi-precious stones in its structure, to which is added the labor of making the jewelry.

And when you sell, you will definitely run into 2 big problems:

  • you will lose between 10 and 20% of the purchase value because the buyer will most likely only pay the price of the gold and the precious stones in the jewelry structure
  • you will lose between 20 and 30% of the purchase value because the buyer will most likely pay a price lower than the spot price of the precious metal at the time of the transaction.

Therefore, experts in the field say that a gold or silver product can be considered an investment only when its purchase or sale price is as close as possible to the spot price of the pure amount of precious metal contained in it.

Jewelry vs. gold coins or bars

Jewels are not liquid assets, they are usually more expensive, calculated per gram of pure gold, than an investment in standard gold products. At the same time, the sale price is much different from the purchase price and VAT is also applied. In contrast, when we talk about physical gold the difference between the purchase price and the selling price is below 5% and VAT is not even applied. Another advantage of gold coins or bars is that they are internationally recognized and professional dealers have transparent prices. Conversely, with jewelry, as mentioned above, the sales process can be cumbersome and less transparent.

Buy back jewelry

On the other hand, if you already have such jewelry in your possession and want to capitalize on it, you can sell it by taking advantage of our buy back services, at prices 5% lower than the spot price of gold. This in the conditions where, on the niche market, old jewelry is bought at prices at least 10% lower than the spot price. Also, if you have a larger quantity of jewelry, our dealers can negotiate a better price. Once bought, these jewels will not be resold, but are melted down and the resulting gold is exported to international refineries.…

Egypt, The “Golden” Land Of The Pharaohs

Thousands of pages could be written about Egypt and there would still be a lot left to tell. The first stop on our trip to the land of the pharaohs was in Hurghada, one of the most famous and popular tourist resorts in Egypt thanks to its 20 kilometers of beaches and temperatures that do not drop below 20 degrees even in winter.

From here, our steps started towards Luxor. With the Nile Valley as my guide, I quickly understood why 96.5% of the 90 million Egyptians live along the famous river. In this context, the words of former Egyptian president Anwar Sadat are telling: “Only the lack of water would bring war back to Egypt.”

Once upon a time, when Homer sang its glory in the Iliad, Thebes stood on both banks of the Nile. With a population of almost one million inhabitants, Thebes was the capital of Egypt for almost 500 years, until the last pharaoh of the Ramses dynasty died. After Memphis took its place, Thebes was slowly forgotten and buried in the sand until it was brought to light during Napoleon’s Egyptian campaign.

Karnak, the largest religious center of Egypt

The locals of Karnak believed that the temples were the earthly homes of the gods, and this belief is reflected at every step in the grandeur of the buildings erected. From the pier set up on a canal fed by the waters of the Nile, tourists cross an alley guarded by sphinxes with ram heads (symbol of fertility) to the monumental portal at the actual entrance to the temple. Gigantic statues, including that of the great pharaoh Ramses II who ruled Egypt for 66 years, stand watch everywhere.

The Temple of Amun, located in the largest area of ​​the three that Karnak is divided into, leaves you breathless due to its huge dimensions. 134 columns of stone blocks, perfectly joined without any glue, of which 12 are no less than 23 meters high. Most tourists stop in front of the sacred lake, where, during the holidays, a boat with the statue of the god Ammon sails or around the stone scarab, which legend says must be circled 7 times if they want to bring them happiness.

More than 30 pharaohs, for almost 2,000 years, took care of this temple and kept alive the sacred rituals related to the cult of the Sun, the Moon and the Earth, which the frescoes on the walls also speak of. But although the ancient hieroglyphs were deciphered thanks to the genius of Champollion, many of the details of these rituals will still remain a mystery. A construction worthy of the Book of Records, the temple of Amon was, however, inaccessible to ordinary Egyptians, and if they had violated the prohibition, they would face the death penalty.

Incidentally, even now access to certain parts of the temple is prohibited, but for different reasons. Throughout history, the city of Karnak has been looted and destroyed many times, sometimes for religious reasons (early Christians destroyed everything they considered to be pagan, including images of Egyptian gods) or out of greed – all the gold objects are long gone. Now, the restoration of the temple continues and in order not to destroy even worse the areas affected by these destructions or the passage of time, the access of tourists has been restricted.

Local crafts elevated to art

Our next visit was to the “Papyrus Museum”, where the museum staff showed us, in a small interactive demonstration, what the manufacturing process is, unchanged for so long.. Pieces of reed are taken and beaten with a special hammer, then they are watered and left like that for 6 days, after which they are put under some kind of press (sometimes a simple boulder was used) for a week. Tourists who want to try their skills also receive a small papyrus to remind them of this experience. Unlike those sold by street vendors, these papyri are more expensive, but this way you have the guarantee that they are local and quality products.

I also visited a small alabaster workshop, from which dozens of souvenirs are made, some of them being sold to tourists under the pompous title of unique archaeological artifacts, accidentally discovered by the family members of the person who bought them. Which, of course, is not true at all.

After these small visits related to local crafts, we crossed the Nile by boat to the Valley of the Kings, where there are 62 tombs of Egyptian pharaohs, including Tutankhamun’s, discovered in 1922 by the British archaeologist Howard Carter. Unfortunately, most tombs are the increase in humidity irreversibly affects the paintings inside.

The Ancient Wonders of Giza

Our journey in Egypt is coming to an end, with the last stop being Giza, considered one of the 7 ancient wonders. The entire necropolis, consisting of the pyramids of Cheops, Kephren and Mykerinos and the famous Sphinx, has been part of the UNESCO Heritage since 1979. The pyramid of Cheops really amazes with its monstrous dimensions – the side of the base is 230 meters long, and its height is 137 meters.

More than 2.3 million stone blocks, weighing between 2.5 and 40 tons, were used for this amazing construction, with the famous historian Herodotus saying that the stone blocks were brought on rafts down the Nile from the quarries of Tura. From the river bank to the construction site, the blocks were moved using levers, rollers and wooden sleds. It is said that the pyramid would have been 10 meters higher, but that at some point the top fell, for an unknown reason. During World War II, the British Army installed an anti-aircraft observatory there. The other two are placed 500 and 1,000 meters away, respectively. About their construction.

Research shows that the complex system of corridors leading to the burial chamber, buried deep in the heart of the pyramid, forms a veritable labyrinth. Recently, state-of-the-art scanning technology has revealed that within this complex system there is an empty space the size of an airliner.

The legend of the curse

Why were they built that way? Because of the cult of the afterlife, which played a crucial role in the religion of the Egyptians. They believed that death meant the passage to another world, but two conditions had to be fulfilled: the body had to be mummified, so as not to rot, and the soul “Ka” had to have at hand everything necessary for the other world. Relatives would take care of this and we would put food, drink, weapons, jewelry, household items and even servants or favorite animals for him. At the same time, there was the belief that the deceased watched over his descendants on this earth from the world beyond.

The last image related to ancient Egypt that still lingers in our minds is the impressive monument of a half-human, half-animal man – the famous Sphinx. Many Egyptologists believe that it depicts the pharaoh Khafre, but just as many refute this hypothesis. By far the most mysterious and fascinating construction of Ancient Egypt, the Sphinx has survived. It is said that in 1989, Japanese scientists discovered, using radar technology, that under the Sphinx’s right paw is a tunnel leading to Khafre’s pyramid. At the same time, they would also have discovered a secret room that could have revealed information about the mythical Atlantis.

We don’t know how true all the legends and myths are about Ancient Egypt, but we know for sure that it is a land of the gods, where amazing constructions have stood the test of time, remembering an Egyptian proverb that says that everyone fears the effects time, and he is afraid of pyramids.…

Why Europe Is Betting On Gold Against Inflation

In April, Hungary accelerated its gold buying policy, tripling its reserves. The situation in Hungary is not an exception, but rather reinforces the rule. In recent years, national banks in Central and Eastern Europe (CEE) have bought gold regularly.

Such behavior seems paradoxical, because for half a century money around the world has been fiat, not backed by gold. So here we will look at why banks buy gold.

The increase in gold reserves in the CEE

In recent years, no country in the CEE region has reduced its gold reserves. Even in the rare cases where temporary sales are seen, they occur because of the current economic situation. The strategy of all countries, including Romania, is to increase gold reserves.

However, there are significant differences between the quantities purchased by CEE countries. And let’s not forget that this graph shows us the situation until the end of 2020, and governments have continued the policy of increasing reserves, with further changes to come at the national level.

Hungary – fastest growing gold reserves

In April 2021, the Central Bank of Hungary (pictured) made a very bold move and bought 63 tons of gold, bringing its reserves to 94.5 tons, a record in the country’s history.

But the policy of increasing gold reserves does not date from today, from yesterday. In the last quarter of 2018, this type of transaction grew at an even faster pace – in just three months it saw a 10-fold increase. In the same year, the central bank repatriated its existing reserves and instead of storing them in a vault in London, they are stored in Hungary itself.

In this context, Hungary has become a leader in terms of the speed with which it increases its gold reserves, not only at the European level, but also globally.

Poland, sudden increase in gold reserves

In 2019, the National Bank of Poland started a similar policy, buying 100 tons of gold in just 6 months. Thus, it almost doubled its reserves, which reached an all-time high of about 240 tons.

Despite the slight drop in the price of gold that preceded this move, Poland will continue this trend. In an interview at the end of March, the governor of the central bank, Adam Glapinski, announced that in the coming years, Poland will buy at least 100 more tons. At current prices, Poland will spend about $5.5 billion.

Serbia – the record holder in the Balkan Peninsula

According to official data from the National Bank of Serbia, in 1999 its reserves were close to zero. Afterwards, Serbia started buying gold, but there were also times (2002 and 2006) when it sold. In general, the neighboring country has maintained its position as a net buyer of gold, regardless of its price. After buying 10.2 tons in 2019 and another 5 tons last year, Serbia now has reserves of more than 32 tons, practically leading the Balkan Peninsula.

Since the beginning of 2021, due to the slight depreciation of the precious metal in monetary terms, Serbia’s gold reserves have depreciated slightly. But according to the World Gold Council and the National Bank, Serbia continues to buy and gained 0.1 tonnes each in the first two months of the year.

Turkey’s uncontrollable inflation

Turkey is the absolute leader when it comes to gold reserves (about 700 tons), with the Central Bank buying gold directly from the profile markets since 2017. With the highest inflation as well, it becomes even clearer why the precious metal plays a such an important role in Turkey’s economy, actually being the savior of the Turkish lira from a total fiasco. In the period from 2017 to 2020, Turkey was always on the top of the list of the biggest buyers of gold in the world, last year being even on the 1st place.

If we analyze the monthly statistics, from November 2020 until now, Turkey is the only gold seller in the region. Has he changed his policy in the long run? The answer is no. The reasons are related to the colossal inflation in Turkey and the gold shortage in 2020 due to the closure of refineries and precious metals markets. To balance the market and stop the Turks’ further gold rush, the central bank started selling. Another reason is related to the collapse of the Central Bank of Turkey’s reserves in convertible currency. At some point these reserves became menacingly thin, and the country simply began selling large amounts of gold.

Despite the diminishing role of gold in 1971, many bankers still see it as a symbol of the security and stability of monetary systems. At the same time, there are many voices, especially in Central and Eastern Europe, talking about how banknotes undermine the policies of institutions such as the European Central Bank and the Federal Reserve.

Therefore, we should not be surprised that in 2018 and 2019 central banks recorded record purchases of gold – 656 tons and 669 tons, respectively.…

What Is The Real Price of Gold?

Usually, in the media, only one value of gold is circulated that goes up or down. But, the precious metal has many values ​​because it is traded in different markets, and knowing their dynamics is important not only for investors, but also for what is happening in the economy as a whole.

Although considered by some to be just an investment asset, gold has a number of other applications and does not have a single price. It is traded by different economic agents in several separate markets, which allows investors not only to profit from fluctuations in different segments, but also from the price discrepancy in different markets, which is called a spread.

The most important gold markets

Keith Winner, a veteran gold trader and president of the Gold Standard Institute, identified the three leading markets as:

  • spot (at the London Metal Exchange);
  • futures (at COMEX in New York);
  • commercial gold – physical coins and bars.

Although influenced by different supply and demand, the difference between spot and futures prices is usually not large. For example, on October 12, 2020, the spot price in London was $1,922.55 per troy ounce, and gold for December delivery on the COMEX traded at $1,927.60 per troy ounce.

Gold spot and futures markets

A market in which futures contracts have a premium over (ie are more expensive than) the spot price is called the market. “A Guide to the London Bullion Market”, published by the London Bullion Market Association, explains why:

“Typically, the interest rate on gold is lower than the interest rate on the dollar. This makes the forward value of the metal positive, meaning it is higher than the spot price. In very rare cases, when there is a shortage of metal that can be used for leasing, the cost of borrowing gold can exceed the value of borrowing dollars. In this scenario, the forward differential becomes negative and the futures price is lower (in other words, there is a discount compared to the spot price), and the situation is called a downgrade.”

Another reason why futures contracts have a premium over the spot price is that of gold storage. When an investor buys the right to purchase an asset at some point in time, the gold has to be held somewhere until maturity. The cost of this service is also included in the futures price, making it more expensive than spot.

But regardless of whether we are dealing with a contango or backwardation market, the difference between the spot and futures price of gold generally remains small. The equilibrium tendency of the two values ​​is not a coincidence or a consequence of the fact that the same commodity is being traded, but the result of the demand for profitability by traders and the economic law of supply and demand.

Arbitrage – corrector of gold price fluctuations

When the difference between the two types of prices increases (for example, the futures price rises significantly above the spot) market participants have an incentive to buy gold at the current value in London and sell it at the futures price in New York, for example. A transaction in which an asset is simultaneously bought in one market and sold in another is called an arbitrage.

But this cannot last forever. When such transactions take place, it increases the demand in a market where the value of the commodity is lower (in our case spot gold), but also the supply in the market where the price is higher (ie gold futures). Thus, the price premium is reduced, and at some point arbitrage will no longer be profitable.

The Covid19 crisis and the increase in the price gap

Arbitrage in both markets requires gold to be melted, as the London Metal Exchange and COMEX allow trading in different quantities, the standard being 400 troy ounces in London and 100 troy ounces in New York. This operation is usually cheap, but with the onset of the pandemic in the spring of 2020, the profile market faced an unexpected challenge. During the quarantine, many refineries shut down, and gold could no longer be smelted to previous standards.

Because of the general uncertainty, fund purchases and exchange-traded futures contracts rose sharply in the first phase, leading to massive appreciation in gold. Later, due to the blocking of arbitrage and the mutual influence of futures prices, the difference between futures and spot prices increased to 15% (about $70 per ounce).

Differences further faded in May 2020, following the resumption of Swiss refineries, which are an important player in the profile market. According to Commerzbank , they have the capacity to refine 1,500 tons of gold per year, an amount that represents approximately one third of the total amount of gold refined globally. Arbitrage was thus able to restore balance between spot and futures prices, directing gold from London to New York.

Thus, when the March and April futures contracts matured in July, increased demand for financial instruments led to the largest supply of gold in COMEX history, amounting to 3.27 million ounces, as the quantities of gold traded in general they are usually significantly smaller.

Futures and leverage

Leverage, also known as leverage, allows traders to enter into high-value trades with little upfront investment, making futures investing even more accessible to ordinary investors. With a leverage ratio of 20:1, for example, an investment of $1,000 can be worth $20,000. That makes the profit, but also the risks, much higher than the initial capital.

Futures leverage is also disproportionately affected by changes in the price of gold. Since the ratio of equity to leased capital is 1:20 per ounce, if it increases even by 1%, the actual effect on the investor will be equivalent to a 20% increase in value to him.

Here’s what leverage trading looks like. If the price of a troy ounce is $500 and the COMEX can trade a minimum of 100 troy ounces, and the leverage is 15:1, then the investor will be able to manage 100 troy ounces with equity worth $3.3K.

Spot price and commercial gold

While spot and futures prices are usually balanced by arbitrage, things are different for commercial gold, which is the only over-the-counter asset. Its value is influenced by the mark-ups charged by the dealers, which include not only their commission, but also the costs of marketing, storing and insuring the products. In the case of coins, the price is also influenced by their rarity. At the same time, the price paid by end customers also depends on the production capacity of the profile market, a value that is variable.

On the other hand, equipment for the production of coins and bullion requires large investments, and not infrequently, until they become fully functional, the price of gold in the respective market can fall. We must also bear in mind that the investment in equipment to produce coins and bullion is high, and by the time a machine is installed and operating, the price of gold may have begun to decline.

In this context, it often happens that there is a lack of commercial gold in a certain market, which leads to an increase in the selling price of physical assets, which ends up being the spot price + a certain percentage. The higher the demand against the supply, the higher this percentage. This allows us to assess the situation of a particular market, not the global gold market.

In short, knowing the different types of gold prices, how they interact, and the factors that influence their changes is essential to profitable gold investing. Moreover, gold price fluctuations can be a good indicator of trends in every market in the world.