One of the most frequent issues I face from newbies is: Is it far too late to trade gold and silver? My answer is always clear: Never! And this is not linked to the cost of gold, you can purchase precious metal at any time irrespective of what the yellow metal price is.
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The most critical rule is putting a fixed percentage of your trading portfolio toward precious metal every month irrespective of the yellow metal rate.
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The most commonly used percentage is 3-10% based on the power of the trend, this percentage may be increased to up to 20% if the trend is much too strong.
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In this article we will provide you with some advice that you should keep in your awareness before taking the first move in precious metal trading.
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Which form of gold to buy: Buy yellow metal in the cheapest form (within reason). Almost all forms of precious metal are more costly than the intrinsic value of precious metal in it by a particular percentage. The lower this percentage, the less costly the yellow metal form is. For instance, if a gold and silver coin contains 30 grams of precious metal, the price of intrinsic yellow metal in the coin can be estimated by:
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Price of gold in the coin = 30 x the price of one gram of precious metal.
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Nevertheless, the price of the coin will be a little higher than this be some percentage. If you buy yellow metal for investment, it is always better to buy gold and silver forms that are the least expensive.
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The most cost effective forms of gold and silver are in this order: gold bars, krugerrands and sovereigns. Other gold and silver forms and coins are more expensive and have to be avoided.
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Gold bars, krugerrands and sovereigns, this the order according to the lower cost, however our advice for you is to purchase in the reverse order i.e. sovereigns, krugerrands, and gold bars due to other reasons that impact our option. For instance, Gold Sovereigns are a smaller sized, more desirable, more historic, and probably better regarded coin than krugerrands, thus it is worth paying a slight added price over krugerrands, to buy sovereigns.
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Krugerrands would be the best 1 ounce precious metal bullion coin. They are on the market in greater amounts, and they can be obtained at lower quotes than any other 1 ounce bullion coins. Nevertheless they are not appealing, and have no historic consideration, they are a very cost effective way for small investors to buy gold.
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When to buy and sell gold and silver: Buy at low prices and sell at high prices
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As a general rule, it is superior to buy gold and silver when its rate is low rather than high and sell gold when its price is high rather than low. However don’t wait around for absolute bottom to buy or absolute top to sell, since most often you will miss these points together with the passive effect of emotions on your choice and the increased risk and pressure associated with this policy. One of the most common methods is to buy gold when its price is within 10% of the bottom and sell precious metal when its rate is within 10% of the top, and I consider this one of the easiest, safest and most effective suggestions in gold and silver investing.
Author Resource:
Wael Mah is a full tme especialized gold investor who helped many beginners to estbalish their job in gold investing. For more information, visit his site at Gold Price , Gold price in india
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