There is an almost frenzy buying and selling of gold coins in the States nowadays as exemplified by the many new gold business companies. This is a good indication of the growing number of Americans who are interested in gold coins. The spokesperson for the World Gold Council mentioned that although gold recycling is very common in the Middle East and India, it is a relatively new practice in the West. The third quarter report of WCG on gold for 2010 mentioned an increase in the West’s recycled gold supply in recent years accounting for about 41% global supply in 2009.
An economics professor commented that the gold price is driven by its exhaustible supply. It is widely accepted that gold is commonly used as an inflation hedge. Hence, gold prices rose as much as 22% in the year 2010 with a new record at $1,424.30 an ounce near the end of 2010. This happens in the midst of the decreased value of the greenback.
Developing Nations’ Growing Demand
Third world countries are demanding gold coins today; two of the main participants in this venture are China and India as there is a deep cultural significance that is related to gold, as well as the use of gold in electronic gadgets. Gold price reached the significant 20,000 Rs per 10 gram in India but this rise does not discourage bulk purchases of gold for weddings and during festive occasions. Many make gold investments as some form of defense mechanism against the fluctuating market.
A WGC report mentioned India’s gold demand to touch $19 billion in the year 2009; this is 15% of all gold markets in the world. There is an obvious 13% increase in the demand of gold in the Indian economy in the past decade. This makes India on of the biggest gold market today in the world; there are implications to the position of gold in the gold market.
Tips to purchasing gold
Some tips in purchasing gold coins include an accurate research of the trend of gold prices. Gold prices move unpredictably; sometimes the trend can be steady while other times can showcase big jumps over a short period. Hence, a keen investor should wait for the right opportunity to purchase gold by watching the gold price trends over a period of time to determine its patterns.
It is always the gold trader’s desire to buy low to sell at a high price for any gold purchased. However, many may hold on to get more returns thinking that the gold price may continue to rise further instead of selling off when the price has risen. Gold buyers should purchase different types of gold coins instead of just one type.
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