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1: Gold is not as volatile as they want you to believe.

Fact: Stocks lost 38% of their share value last year. Gold increased +3%

There’s no question how 2008 will go down in history as one of the worst years for stocks, bonds and real estate. Yet this wasn’t the case for gold bullion because it outperformed all other commodities and gained about +3% in 2008.

An spectacular event known as “Backwardation” occurred for the first time in history when gold spot prices shot ahead of future prices. There’s no doubt that this is a very real reflection of the increasing demand for gold. This could even be seen as the beginnings of a much stronger upward move.

The price of gold could even be driven in the short-term through catalysts like above average government spending.

In a time of political distress gold has always been a safe haven for investors non more so than now as the government printing presses are running on overtime making local currencies weaker to become more vulnerable to inflation.

There’s no question about it there’s never been a better time in history than to buy gold now.

Because of the limited supply of gold we have another catalyst that can also drive up the cost of gold.

2,500 tons of Gold are produced by the world’s 400 commercial mines, yet the world uses over 3,500 tons. And despite production slowly shrinking, since 2001 demand for gold continues to increase.

Could Gold go higher than $2,300 an ounce sooner rather than later?

If anything this trend is looking ever more real with the Word Gold Council estimating that retail investment for gold in Europe increased +607% from 9.1 tons in the second quarter of 2008 to nearly 65 tones in the second quarter of
this year.

2: The truth about Gold dealers

In such turbulent economic times it’s really hard for people to find a solid investment platform they can safely place their money in.

The sad fact of the matter is most people still believe that investing in equities such as mutual funds and stocks can still secure their financial future. The point they’re missing is the stock market and all financial vehicles that are dependent on it are extremely vulnerable to the ups and downs of global economies.

Because of gold’s intrinsic value it must be bought from a reputable source. The reputation of the gold dealer is critical and you should always make sure they provide their customers with the best possible service.

When checking out gold dealers the first thing you need to find out is how long they’ve been in business for. You might find that some of the dealers you speak with have been in business for 50 year or more, it’s not unheard of. If you find one that’s been in business for this long you should definitely consider buying from them. With so many new gold dealers springing up overnight on the Internet it makes it so much easier to be ripped off.

Next you need to find out is how much gold inventory that have. As a rule of thumb all reputable dealers hold diverse inventories of precious metals. Be careful of a good sales pitch but limited inventory, they might be looking for people to take advantage of.

Good dealers with long-standing histories never have to use sales pitches to attract new customers. So always be on the look out for testimonials from their satisfied clients.

When you search the Internet it’s extremely easy to find online gold dealers, most of them will provide a list of gold prices and inventories making it easier for you to make a decision.

The best approach to take is to create a list of potential gold dealers then call each one up and speak to them in person before buying anything. It’s critical for you to get a feel for them before you buy any gold. Through this you’ll get to know if they’re the right people for you.

3: Buy physical gold

Having the physical gold in your possession is very important, but not always practical when you consider the size, cost and weight of physical gold bars. For example a 1kg bar could set you back about $35,000.

The alternative approach is to buy gold in much smaller and portable formats like coins and gold chips or mini-bars.

The main reason for having the gold in your possession is it gives you a much greater sense of security simply because you can access your wealth instantly without waiting for the bank to open.

For the first time gold investor buying gold coins, chips and mini-bars are an excellent way to begin with your gold investing. You can start on a small scale with just a single quarter ounce gold Kruggerand coin for example. It won’t break the bank and gives you something easy to grow from.

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