Should I buy gold or silver?

Should I buy gold or silver? This is a question that is best answered by looking at the present gold and silver markets. What you need to remember when investing your money, is that the reason for an investment is to obtain the best return on investment as possible.

The Gold Prices Today is currently at $1,539.10 at the close on May 30, 2011. In the past 60 days the price of gold has risen from just under $1440 to its current level which is nearly a $100 increase. That sounds wonderful but there is a catch. To earn that $100, you must have invested $1440 to begin with. That is about a 14% return on your investment.

Now on to silver, at the close on May 30, 2011 the price per ounce of silver was at $38.07. In the past 60 days the price of silver has risen from $35.00 an ounce. That is a net gain of only $3.00. That is only a 7.8% return on investment.

A clearer picture is made when comparing the amount of your investment and its return on investment. The main difference between the two is not really clear when comparing the return on investment per ounce of precious metals. If $1400 was invested in gold 60 days ago you made $100 and owned one ounce of gold.

If that same $1440 was invested in silver you would own 37.83 ounces of silver. You would also have a return on your investment of $113.48.

It is true that gold is more valuable than silver on the market, but you can make more money investing in silver in the current market conditions.

This makes the answer to the question should I buy gold or silver rather clear. Silver will make you a better return on your investment and that is the real reason you invest, it is to make money.

Record High Gold Prices

Again there is another Record High Gold Prices. This was the headlines at the beginning of March 2011 and now again not even 2 months later. The high of $1519.30 on Monday April 25, 2011 was expected since the announcement from the S&P credit agencies downgraded the US government from stable to negative.

The current Gold Prices Today went from the high of $1519.30 to a low of $1498.80 yesterday. This turbulent market has investors scrabbling. With the gold market pegged to the USD which is starting to loss its stability due to the lack of a sound fiscal policy by the US government, no wonder people are buy real  investment, Gold.

The current speculation by investors and those in the gold industry is that Gold will continue to rise throughout the year. It is now expected to breach the $1600 mark before the end of the year. This is a clear indication by the markets that no one is believing what the governments around the world are trying to push on the public that the recession is over.

Since the Obama administration decided to bail out the financial industry and not force them to help the general public, the US economy is not going to recover for some time. Since the massive debt was built up helping the rich, the poor will suffer even longer and there are no more funds to help them.

Gold always has and always will be an indicator on how well the economic policies of the US government and the other major economies are doing. As long as record high gold prices continue to occur, the people of the world know their governments are not deploying a sound fiscal policy. It really is time for a change and not the change Obama did, which was for the worse.

Gold Prices 2011

The direction that Gold Prices 2011 are heading still point up. Every time the so called experts predict the worlds’ economy is mending, there seems to be another disaster that negatively influences the markets. As we all know, when the markets are unsettled, the price of gold rises.

The Gold Prices Today at the close of March 31, 2011 in New York was at $1431.88. This price has been fairly stable for the past month with the fluctuation only being about $40 in that time period. This is dramatically different than what the 30 days preceding it showed. This was nearly a $100 increase in the price of gold. This all follows a year that saw the gold process rise nearly $300.

The reason for this stalling in the price of gold could be due to speculation that the FED is finally going to do their job and help the economy with their monetary policy. Once again the FED is pointing to the US economy as recovering with the data that is expected to come in shortly and they will react by tightening their monetary policy and reduce their buyback program.

Unfortunately we have been listening to this same rhetoric for over 2 years now. The private sector is doing what it can to help the economy, but the federal government has done nothing but sink the country deeper in debt.

The Financial Forecast Center has made the prediction that gold prices will continue to rise until July of this year when it is expected to start falling. This prediction hinges on the economy and the monetary policy of the US Government.

This policy is driven by what is good for big business like no taxes for large corporations like GE. This is one American that does not expect the markets to stabilize and gold prices to drop any time soon. It’s not in the interest of big business. This is how the Obama administration works and gold prices 2011 will continue their upward trend until we get a new president that represents the people once again.

Gold Prices Back Above $1325

The gold prices back above $1325 are the result from unrest in the Middle East, especially Egypt. Gold has always been the safe sanctuary for investors during recessions and troubled time, like the world is now facing. You can always tell how comfortable or uneasy the market place is with the price of gold and its activity on its market.

The current spot Gold Prices at the close of January 31, 2011 was at $1,333.00. This is a decline from a high of $1,426 less than 2 months ago, but investors are not leaving the safety and security of this precious metals market for any riskier investment at this time because of all the uncertainty.

First it was Tunisia, now Egypt with revolutions toppling governments. There is talk of other regime changes that are very unsettling for all the markets. This instability will see gold prices maintain their current level or increase until the political situation settles down and investors know what to expect.

Gold did see its first monthly decline in the last six months due to positive economic news from the US along with the Euro financial situation stabilizing, but by maintaining its price near records level still send the message of uncertainty in the market place.

The main concern to the world markets when it is related to Egypt is not oil but the Suez Canal. With instability in Egypt the daily operations of this busy sea-lane is uncertain. The reason for concern is that 7.5% of all the worlds’ goods are transported thru this vital waterway. If there was a disruption in vessel travel thru this waterway, it would have a negative effect on the world’s market place.

Until stability returns to the region, expect gold prices back above $1325 and to stay there.

Invest in Gold by Investing in Gold ETFs

To invest in gold by investing in gold ETFs is a viable option to the investment mechanism of physically purchasing gold by investors. This type of investment is also referred to as paper gold, since all the investor owns is a piece of paper that has the value and no physical gold at all.

With gold prices closing in New York at $1334.50 on January 24, 2011, this is a very lucrative type of investment. What an investor must keep in mind is that the value of their ETF is not solely supported by the spot gold price in most cases, but some do exist.

The ETFS Physical Swiss Gold Shares (SGOL) is an ETF that has 100% of its assets in physical gold. This ETF’s value will fluctuate with the spot price of gold. The iShares Gold Trust (IAU) is another ETF that has all of its assets in physical gold. If you wish to own a share of physical gold, these two are a perfect choice.

For the investor that wishes to diversify their risk a little more, there are other options with gold ETFs. This is the ETF that not only hold a portion of the assets in physical gold, but also in the mines that produce the gold and the refineries that purify the gold, that is then placed on the market. The value of these ETFs is then judged by the known and unknown reserves of the mines and the process capacities of the facilities where the investments are made.  A good example of this is the Market Vectors Gold Miners ETF (GDX).

The reason the gold ETFs are so attractive is the fact that you are not holding gold physically. This paper gold is more easily traded on the open market like any other stock or mutual funds. The downside is that the investment firms gets a cut of the profits for making the transaction, just like any other broker.

To invest in gold by investing in gold ETFs is an attractive way to make an investment that is more liquid than investing in physical gold itself.

Gold Prices 2011

The gold prices 2011 that closed in New York on the 14^th of January was at a spot price of $1361.80. While this price is not the predicted $1650 price that Jim Sinclair thought it would be with his $1,000,000 bet, but it is approaching that point.

The current gold prices today are fueled by the economic recession, inflation worries, and political unrest that have hampered America for the past couple of years. As in the past during other uncertain economic times, gold has been the safe haven for investors like it is today. The result is higher gold prices the nation and the world have seen in the last couple of years.

Some of the forecasts for the price of gold to rise to over $5,000 might seem farfetched, but their reasoning is sound. If inflation rises to double digits and local currencies are then dramatically reduced in value, the only way to save the values of what has been saved is in a physical object like gold and platinum.

A few of the more reasonable sounding predictions keep the rise in gold prices to between 12.4% and 19%. The main deciding factor will be how fast the American and world economies recover from the greed recession that the banking industry caused in 2008.

What is going to be fueling the rise in gold prices in 2011 will be how much of a currency war between China and America reaches, and the insolvency of the European Union member states with their debt problems.

Many are betting on China sustaining their dominance on the world stage as an economic power, but this same situation of China being the number two economy of the world has existed in the past. They then falter and are replaced by another budding economy and never have reached the number one statues.

What is an almost certainty is that gold prices 2011 will remain high while the world deals with the new global economy and all the infighting amongst nations on their search for a better life at the expense of another country.

American Eagle Gold Bullion Coin Value

Today on Gold Prices Today, we are going to look at the venerable American Eagle Gold Coin and how it’s selling.  These coins are the most popular gold rounds sold in the U.S. and are sold by gold weight, giving them one of the most trusted American Eagle value mints available.

The coins themselves come with American Eagle value on their faces of $50, $25, $10, and $5.  These marks have nothing to do with anything and are really just for show.  The true value in the American Eagle Gold Coin is in its gold content.

The $50 coin is the one ounce coin, which currently sells at around $1,347 per coin, containing a full ounce of gold at .9167 purity.

The $25 coin is a 1/2 ounce American Eagle Gold Bullion coin at the same purity and selling for about $681.  These are probably the most popular of the American Eagle value coins because of their cheaper price and smaller size.

The 1/4 ounce $10 coin has the same purity and is much smaller, selling for about $355 right now.  These are also very popular due to their cheaper price, but are very small.

Of course, the $5 face of the 1/10 American Eagle Gold Coin belies its $158 price (roughly) right now.  These coins are popular as gifts or in small pieces of jewelry such as watches, bracelets, and even earrings, since they’re only about 16.5mm in diameter and very thin.

Of all of the rounds sold, however, the American Eagle Gold Bullion Coin tends to hold its value amongst traders and sellers simply because the mint is trusted.

Gold Investing Strategy

We here at Gold Prices Today realize that many are looking to get into gold investing as a way to protect assets and retain wealth.  It seemed important that we outline the basics of gold investing and give a simple strategy that can be used as a beginning point for investing in gold.

Gold is a commodity, but unlike other commodities such as grain or beef, it is much more volatile when compared to the stock market as a whole.  This is because of gold’s primary difference when compared to other commodities: it is sought after not because of supply-and-demand requirements, but as an investment purely for both luxury and peace of mind.

Gold has the unique ability to be static in worth.  When adjusting for inflation of the U.S. Dollar, for example, an ounce of gold is worth the same today as it was in 1950 or 1900.  The dollar figure associated with gold has changed, but the actual value has remained static.

Thus gold is usually used as a sound investment to retain wealth and value.  Gold investing does not “make money” in the same way that stocks do, but it retains its value no matter what the money around it is doing.  For this reason, it is considered a conservative and proven way to retain wealth and give a solid foundation to an investment strategy as a whole.

The simplest and most effective gold investing strategy for newcomers is to use gold as a base point upon which all other investments are made.  Gold investing is a measure against inflation, fluctuation, and uncertainty.  Everyone’s portfolio is different, but most financial advisers recommend at least 25% of a person’s portfolio be in conservative (”safe”) investments such as precious metals, certificates of deposits, bonds, etc.

Gold ETF Guide

Probably the thing we get asked about most here at Gold Prices Today Live is what, exactly these gold ETF investments are.  So we thought that a smart guide to gold ETFs might be in order.

Gold is always a sound investment, no matter the economic climate, and in times of uncertainty, it’s the go-to for most wise investors.  An ETF is an Exchange Traded Fund which works in a way similar to money market funds, but allows multiple trades during the day, rather than just one or two.  Many ETFs are based on commodities like bullion.

A gold ETF is essentially a certificate based on a specific amount of gold.  So one certificate in an ETF might represent half an ounce of gold at current value.  As gold’s value versus the US Dollar increases, so does the value (in dollars) of the certificate.  These can be traded throughout the day like most other stocks, but are exchanged as part of an ETF, so you are always guaranteed a sale or purchase – which is based on the current market value of gold, or gold’s “spot price.”

Different types of funds give different types of ETF investing in gold as well.  The SPDR Gold Trust, for instance, is a gold ETF based on gold bullion, located in the U.S., and with a relatively high expense ratio of 0.4%.  The PowerShares DB Gold Fund, on the other hand, is based on gold futures (rather than physical gold) and has an even higher expense ratio of 0.5%.

If you have small holdings, then going with one ETF and aiming for lower costs is probably most important to you.  If you have a very large amount of holdings, diversifying between custodians rather than minimizing costs may be your goal.

In either case, gold ETFs change daily and even hourly and are a good way to get into gold investing if you don’t want to hold a lot of physical gold yourself.

Top 5 Mistakes Investors Make When Buying Gold

We here at Gold Prices Today Live know that gold investing is serious business for a lot of our readers.  We’ve also learned that many gold investors, especially those relatively new to the game, are making some very common and deadly mistakes.  Here are those most common mistakes and how you can avoid them.

Mistake 1 – Unrealistic Short-Term Expectations

Probably the most common gold buying mistakes that we see from new investors center around their expectations for their investments.  Gold is a long term investment, not a short-term gainer.  Sure, your investment today might gain $50 tomorrow as gold jumps for some reason, but most gains are slow and even over time.  At the very least, gold will always gain at inflation’s pace, even if the economy is otherwise perfect.  At best, it can skyrocket in a relatively short amount of time.  Those jumps, however, are rarely overnight and take time.

Mistake 2 – Overpaying Premiums

Gold’s spot price is not the same as what you’ll pay to purchase bullion.  Most people who purchase physical gold buy coins – usually from a well-known mint.   The premium you pay will depend upon the mint as well as the handler (seller’s) markup.  If you’re investing as part of a financial portfolio and not as a collector, then don’t overpay the premium just to get a “good mint.”  Standard “rounds” like the American Eagle and Canadian Leaf are lower-cost and just as accepted amongst gold investors as the Credit Suisse.

Mistake 3 – Discounting Ownership of Physical Commodity

Many investors only invest in one kind of gold, often ETFs or futures.  That is only one type of gold and is not guaranteed against market crashes.  Physical gold (whether stored by yourself or someone else) is one of the best ways to solidify a portfolio.

Mistake 4 – Numismatics as Your Only Choice

Numismatic coins are nice and can be nostalgic for many investors, but they are not the same as .999 fine rounds.  Most of their value is in their collectability – something that fluctuates wildly and is more market-dependent than simple gold value.  IF collectors can’t afford to keep collecting, the market dries up.   New finds in the same series or type of coin may also drive down values unexpectedly.

Mistake 5 – Nuggets and Jewelry

The largest problem with owning pure gold nuggets or gold jewelry is that its value is a matter of opinion.  They can be a great part of an investment portfolio, but by themselves they are some of the least portable options for gold investing.  The value of jewelry is dependent on what someone is willing to pay for it and whether it can be tested for its actual gold content.  Nuggets are similar, though not as difficult.

Avoiding these five mistakes and keeping a diverse, rounded, and thoughtful portfolio of gold to fit with the rest of your investment goals is the key to maximizing both the returns you can expect over time and the security of your finances.