Tuesday, April 20, 2010 at 11:07 AM |  
Adding gold bullion to your investments brings some matchless advantages. A gold bar is a highly liquid investment, the market is transparent, and few other investments can offer such a hedge against the ravages of inflation. When you buy gold bars, you're joining a long tradition of canny financiers who prosper no matter what the state of the economy. But before you enter the gold market, it's a good idea to understand the fine details of what you're buying. Here's all you need to know to buy gold bars.
Firstly, let's look at how the quality of gold is measured and certified. You've probably bought gold jewllery at some point and are familiar with the term 'karat' (sometimes spelt carat) (abbreviation ct or kt). This is a measure of the purity of gold with 24-karat (or 24K) meaning the purest form.

This K system is used in the United States and Canada. It's also known as 'fine' or 999 (also known as three nines fine) in Europe. Any number below 24 indicates that the gold is alloyed or mixed with some other metal. For example, 18-carat gold is 75% gold. Many European countries use what is known as the percentage hallmark stamp rather than the K. Thus 18K would be known as 750. When buying gold bars, you should only go for those with fineness of 0.999 and above (24 karats).Next, let's see how the quantity of gold is measured.
Precious metals such as gold, platinum and silver are measured in troy ounces. This has nothing to do with the ancient city of lore but is derived from the French town of Troyes which was a thriving precious metals centre and where this unit of measurement was first used. One troy ounce is the equivalent of 31.10 grams and so around 10% heavier than the avoirdupois ounce. Banks tend to buy and hold gold in metric tons with one ton equal to 32,150 troy ounces.Next, let's look at the different forms of physical gold you can buy.
Essentially when buying gold, you have the choice of bars, coins and jewellery. Both bullion bars and coins are priced on the basis of their gold content. However, the premiums charged by the dealer are likely to be higher on coins than on bars. This means your transaction costs will be higher.

As for jewellery, you have to factor in charges for design and craftsmanship making this form of gold the least effective for investment purposes. If you buy gold jewellery, it should be for the pleasure the item gives you rather than monetary considerations.
Finally, let's consider the all-important matter of how the price of gold is fixed.
One of the factors that make gold such a fine investment is that the market is transparent. The official gold price is fixed twice daily in London at the offices of N M Rothschild. This price, which is the international benchmark price, is set in US dollars per fine troy ounce of gold. This means that you can always easily find out the exact current gold price via the internet or other news sources. Unlike some investments, you are never in the dark about the value of your gold.
Now that you know all about the product, let's consider the overall method of how to buy gold bars and gold bullion in the UK. It's very straightforward. If you're interested in adding gold bullion to your investments or just want some gold as security for the future, the best way to acquire it is to buy gold bars. You can find reputable gold dealers online who will deliver your purchase via insured Royal Mail. You can browse their websites to find the quantities of your choice and then placing an order is very simple.
Gold has long been a symbol of love, of beauty, and of success and quality, too, and today is the perfect investment to hold its value in difficult times.
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