Gold is and has always been a popular investment instrument. It offers balance and security for most investors. Investors often move their money into gold in times of economic crisis. It is interesting to note that the current economic downturn caused by the global COVID pandemic has pushed the price of gold high.
If investors are interested in gold’s meteoric rise, it’s time to look at different types of gold investments. Gold can come in many different physical forms but not all of them are suitable for investment purposes.
The purity and color is the first easy consideration for leading gold buyers Melbourne. The most common types of gold color are yellow (if the gold is the purest 24 karat), white gold is composed of pure gold and silver, nickel or zinc which increase strength and give the finished product its white colour, and rose gold if it contains a higher element of copper. It is also possible to make green, black and purple gold with various alloying elements.
You can buy gold bars as investment or you could invest in paper gold. Gold bars are very attractive to investors, paper gold and paper currency carries counterparty risks. The gold mining sectors are subject to the inherent risks of global capital markets. There are also gold funds that invest primarily in gold mining companies. These currencies spread the risk of buying gold shares by investing in different companies in the market. However, they are also subject to capital market risks and incur ongoing management costs.
So, a small-time gold investor should look at alternative gold investment choices: gold coins and bars. It might be the most satisfying form of investment in gold remains the purchase of gold bars and coins. There is a wide variety of gold coins and bars available in the market. The investments are without counterparty risk and provide investors full control of the assets because they are held in physical form. Of course, the storage of gold and its safety during transport must be guaranteed. When you purchase gold assets from a reputable gold dealer, you are always forced to take personal delivery or have the delivered by an insured courier. Many leading gold buyers Melbourne can also arrange to have your gold separated and stored in a commercial vault.
Investing in gold ornaments
When you buy bars or coins, you get investment grade gold that is 99.9% pure. Since gold is a malleable metal, ornaments must not reduce the purity by adding base metals. Therefore, most gold ornaments are made of 18 carat gold or lower. Also, production and design costs are not refundable upon sale. This is not a good investment. While white, rose, green and even gold look great, it should be noted that the amount of pure gold is very small.
Best Gold Types for Tax Efficiency
All investment grade gold in Australia is VAT free. This is a big advantage when you put your money in gold because it reduces the purchase price by 20%. Gold coins offer a better avenue for investors as the profits made from their sale can be used without having to pay any capital gains tax. Nevertheless, it is important to note the gain.