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Precious Metals made easy - Investment guide
for Gold & Silver
Published: 07-08-2012 16:16
Gold and Silver Bullion As Investment
Up till now, when you tell family and friends about buying gold and silver as protection from central bank inflation, they look at you as though you’re a loonie. And even when they hear from mainstream news sources about gold and silver bullion as a safe haven, it is not enough for them to act based on what knowledge they’re given.
Imagine how they would’ve reacted back in 2003, when ‘buy gold’ was not mentioned at all in the news and it seemed more practical then to put your money in real estate or stocks. The gold price in 2003 was S$633/oz., and silver’s was S$8.5/oz., and it seemed then that it would linger for decades more at these levels. Without an understanding of economics, specifically monetary theory, who could’ve predicted the turnaround for gold and silver?
But is it too late to invest in gold and silver bullion and coins now? After all, their prices are up 300%. The key, however, is to compare the rise in the gold and silver price to the increase in paper money. And it’s not just gold and silver prices that we can expect to jump up, but prices of goods and services, both essentials and luxuries. Clearly, precious metals have not run their course.
Perhaps you are already sold to the idea of buying gold and silver, but don’t think it’s as easy as rushing off to buy, and expect returns immediately, at a regular pace. Purchasing precious metals still involves patience. After all, if you think about it, before 2003, you had to wait quite a long time to see significant returns on your investment. Even now, corrections in the price of gold and silver are to be expected, as in the wake of the September 2008 stock market crash. In early 2008, gold had breached S$1,400/oz. and silver S$25/oz., yet these levels were only to be regained in late 2009. This past year, we have seen gold hovering at S$2,000/oz., and silver in the lower S$30s/oz., down from their highs achieved in 2011.
The trend is still upwards, over an extended period of time, which is what matters for investors. Make sure you invest with money that you can afford to keep illiquid, i.e. not in fiat currency. You have to have enough to be liquid for several months in case you lose your present source of income, whatever this may be.
It is suggested for you to try staggered buying, to buy in regular intervals, taking into account the constant ups and downs in precious metals’ prices. With this strategy, it’s possible to miss out on sudden huge gains, but this is balanced out by saving you from potential losses. Once you arrange your strategy, stick with it.
Singapore, the place to be
Singapore is an especially good country for investing in gold and silver bullion now. You can wait for the October 1, 2012 lifting of the Goods and Services Tax (GST), which has as of yet added a 7% premium to prices. As early as now, you should make for plans for gaining access to the precious metals that will become more affordable once the GST is abolished. Through BullionStar, you can get the real deal, and have the choice to store your gold and silver yourself, or to have it in our special vault storage facility. Either way, you can rest your head, assured that you have made a good investment in gold and silver bullion.
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