6 Questions to Ask Before Investing in Precious Metal
Gold and silver, identified as valuable metals, have been coveted for a long time now. Even today, precious metals make their way to many investors’ portfolios.
There are many ways available through which your investment in silver bullion and gold can be made favourable. But before you start investing in gold and silver, clear your doubts. Experts and bullion investment platforms will be happy to help you.
Questions to ask before you invest
1. Physical, digital or paper?
A reasoning to invest in precious metals is ownership of an asset that is your own, and no one else’s liability. An investment in physical precious metals, physically-backed exchange traded offerings and digital gold often achieves this objective.
On the other hand, the various forms of paper gold such as certificates or future contracts are usually unbacked by physical metal, do not grant any ownership title and thus, making them unable the investors to exchange them for physical metal.
2. Unallocated or allocated bullion?
There are many different factors in the differences between unallocated and allocated precious metals. Allocated metal bullion provides the highest degree of investor safety. Allocated metals are one’s own asset, and cannot be leased or lent to a third party. On the other hand, in case of unallocated metal bullion, the ownership title is not secured by the holder. Thus, in case of bankruptcy or issuer insolvency, investors can be announced as unsecured creditors. Thus, one should always consider trading in fully allocated precious metals.
3. What are the Spot prices?
The Spot prices of gold and silver are the ‘live’ prices that can be transacted and delivered ‘right now’ or on the spot, as price per troy ounce of Gold or Silver. The Spot prices are used to determine the current price of unfabricated forms of gold and silver, before it is sold to be created as bullion bars.
Spot Price is an average net present value of the estimated future prices based on the traded futures contracts. Look for the spot price of the metal before investing in gold bullion or silver.
4. Where are my metals stored? Are they safe?
Platforms like Central Bullion Platform has been built with the user accounts being protected by state-of-art encryption technologies. You are able to view your wallet, portfolio and movement of bullion and funds at any time in your personal dashboard for peace of mind. You can also check if your pool allocated bullion has been correctly assigned, or not.
Your economic assets are stored in secured vaults in different countries. The vault operators do not accept requests directly from Central Bullion Registered Users, or anyone else other than Central Bullion Ltd. Therefore, it is impossible for anyone other than the company itself to arrange collection/withdrawal of any Bullion from, or movement between, any of our dedicated Vaults.
5. Can I get my metals (economic assets) delivered to my home?
You understand and accept that pool allocated bullion is a lower cost to purchase per gram than the cost of bullion bars for delivery. Therefore, when converting pool allocated bullion to physical bars for delivery you will be using a larger quantity (grams) of your assets to convert to the same monetary value of metal bars for delivery. The calculation made for the conversion will be based on the current price of bullion bars for delivery on a particular platform against the current price of pool allocated bullion on the same platform at the time of conversion.
When you convert your assets from the portfolio to bars for delivery, you are ordering a whole bullion bar, or bars, that is/are shipped to your premises for you so that you can store it/those yourself. You will also be required to pay the required shipping fees for the delivery of the bars to you.
6. And finally, which precious metals should I invest in?
As seen by the popular trading trend and expert views, gold and silver are definitely the most popular precious metals. History says how gold was an unparalleled storage of worth. Gold has also served as a safe-haven asset in terms of economic or geopolitical upheavals. It has also been an effective tool for diversification of portfolios.
Silver has great physical properties, which lend it to a wide spectrum of uses. Approximately, 50% of the annual silver supply is used for industrial purposes. Since it is much affordable compared to that of gold, it has a reputation of being the common man’s precious metal. Silver too is a tool to diversify portfolio but has a higher volatility than gold.
A mini gold investment guide from us to you to know what you are investing in, and if you are investing it right. So, without much ado, start investing in gold and silver, and get the maximum benefits from your investments.