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Posts Tagged ‘sell gold’

Palladium, like many other precious metals, has been enjoying excellent growth in value since the financial crisis as savvy professional investors moved out of stocks and bonds, which were taking a swan dive, and into assets such as gold, silver, platinum and of course, palladium. These metals are used as a hedge against inflation and a weak dollar, especailly in difficult economic times.

At the onset of the recession the value of palladium leapt with double-digit growth, but the summer months of 2009 demonstrated a wavering in the price of many metals - including palladium.

Platinum is bouncing underneath the $1,200 per ounce mark, gold is volatile, silver is hanging and palladium is stuck around $290 per ounce.

More disconcerting for metal speculators is that trading volumes are thin – the market is still and doesn’t seem to know which way to move.

Mixed economic signals create uncertainty, though some pundits feel the economy was saved by Obama's 0 billion stimulus plan. After the hype came the realization the crisis was a lot worse than thought, and maybe, $700 billion was not going to be anywhere near enough –especially when overseas governments were pumping similarly large sums of taxpayer cash into the banking system and still it seemed the financial system still looked to be on the verge of collapse.

The housing sector saw an improvement in August 2009 and September was on target as reported by banks and retailers. Positive signs demonstrating some recovery or at least stabilization, but at the same time the dollar has continued to weaken against foreign currencies signifying a relatively poor performance against overseas markets and especially by those holding America’s debt (China especially).

The fundamental question is whether stock and bond market performance is going to convince investors to return – if they do, those holding precious metals are going to liquidate to get back into those markets in anticipation of enjoying the returns recovery will bring. The metal price will drop like a rock (just look at platinum prices falling from $2,200 to the $1,200 mark in the last quarter of 2008) and those holding palladium, gold, silver or platinum are going to feel very bad indeed that they didn’t take the opportunity to sell when the price was this high.

For those with small holdings of palladium, especially the private individual who may have the metal tied up in family jewelry, now is the time to sell. The risk of a price crash in precious metals, including palladium, outweighs the prospect of a future return. The return of financial stock market performance heralds recovery and that means the end of the precious metals bull market which is why the metals market has stalled now.

With so many outlets for convenient selling of old gold, silver, platinum and palladium it makes a great deal of rational economic sense as well as simple commonsense to take the profit that has been created by the recession and turn useless jewelry gathering dust into cold hard cash to pay off debts or to get ready to invest in the stock markets.

The main purchasers of gold today are investors; while it is true that gold is much in demand to make jewelry this is secondary as high prices and poor economic conditions are deterring consumers from splurging on high-priced jewelry. The question is why are investors buying gold so heavily and especially at a time when investments elsewhere such as real estate and stocks are taking such a beating?

The answer is wrapped up in our financial system and the global economy actually works , so this article will seek to explain in laymen’s terms a very complex financial structure which has underpinned economies worldwide for the entirety of modern society’s existence.

Gold was sought after in early times because of its beauty and rarity; when coins were first minted, the value of a coin was the value of the gold it contained. For instance, the pirate phrase, “Pieces of Eight”, comes from the Spanish gold coins which pirates were in the habit of “acquiring”. As any self-respecting pirate would engage in drinking a bottle of rum or two after time at sea, the value of the Spanish gold coin was far in excess of the average pirate’s bar tab – they would break the coin into eight pieces and use this small change to settle their tab.

As paper money made its way into economies, the value of a monetary note or bill was backed by an equivalent amount of gold buillion. If you hold a dollar bill in your hand, you know that it was backed by a dollar's worth of gold held at Fort Knox or another gold repository. This was known as the Gold Standard and was established shortly before the end of the Second World War in the Bretton Woods Agreement.

As time went on, the amount of gold required to back the currency dwindled, so less gold was stored to back the paper currency in circulation. When a recession occurred, savvy investors would move their investments from stocks and cash deposits into gold investments because gold was and is viewed as a safe haven for the value they have accumulated. This practice is still in use today as the value of paper money has been decoupled from gold reserves; in effect thre is nothing but the promise of the US Government to back the value of the bills issued by the Treasury Department.

Whenever economic times grow hard, more investors fly to gold as an investment which in turn drives the price of gold up. A couple of years ago, you could buy gold for around $330 an ounce but today, at the height of the recession in 2009, you will not find gold for less than $900 an ounce (and for a brief time it was over $1,000 an ounce).

This is why selling your old gold, especially in the form of old jewelry, is such a good move – you are raising cash for your tightened budgets and getting absolutely top dollar for the gold you have. It is a seller’s market but there is a sting in the tail – as soon as the recovery makes its presence felt, investors will dump the gold they have bought onto the market. Supply will outweigh demand and the price of gold will drop dramatically and very fast. This is why pundits are recommending that for the owner of small amounts of gold, now is the very best time to sell it as you are not likely to get a better price in the future unless the economy takes another nose dive.

Gold may be the number one precious metal from centuries past but the fact is that the vast majority of gold you available on he market is not pure gold – pure gold is highly priced and on its own, it’s not very strong. Wedding bands are made with a combination of other metals for durability purposes. Just as gold has held the eye of men and women for thousands of years, so has silver.

Silver is a soft, white, shining metal and it has the highest electrical conductivity of any element; silver also conducts heat far more efficiently than any other metal which makes silver the gold standard for your cooking pan bottoms! Besides the fact, many of use could not afford the price, so it’s beneficial that copper allows for a less expensive alternative.

Silver occurs in natural form as an alloy or as a pure metal; it is commonly found in close proximity with gold and as electrum, a common alloy made of gold and silver along with several other common metals. Gold is rare however, and most silver is produced as a by-product from the extraction of other metals such as zinc, lead and copper.

Silver shares a common set of attraction factors with gold – it is appealing to the eye, it does not rust or discolor because it doesn’t react well with other elements and especially air and water. More than this, because it is soft and malleable, it has always found a place in jewelry making and its relative rarity has served to increase the value of the base metal and the silver decorative pieces made. Silver was also used to create the first coins in exactly the same way that gold was used – the value of the coin being equal to the value of the silver (or gold) which the coin contained, and from this the practice of hallmarking gold and silver jewelry and ingots.

Silver is widely used in industry and in many of the products we use in our daily lives. Silver is particularly useful in making electrical contacts because of its high conductivity. Many of the high-technology devices in your home, especially computers and modern televisions, have silver coated electrical contacts and rely on the excellent conductivity qualities of silver for their performance. Modern photography would not have been possible were it not for silver; silver compounds and solutions are used to “fix” the photographic image on paper. Silver nitrate is used as a disinfectant in medical situations for anti-microbial cleaning. That is probably why it was used to make silverware (eating utensils).  In industrial processes and the chemical industry, silver compounds play a crucial role as catalysts which render commercially viable manufacture of a very large range of chemical based products.

Like gold, silver has many uses far beyond simple adornment; man has treasured silver almost as much as gold through the ages, but the real value silver has rendered to our lives is much greater than many would otherwise believe.

The rare precious metal gold has been sought after by mankind for the last 5000 years. This has led to gold becoming one of the most valuable of metals in the world and the history of mankind. It’s importance has been further underlined by governments around the world using gold bullion to provide the asset-backing for the money they issued – in the times of early coinage, the value of a coin was actually the amount of gold which it contained – the stamp of the treasury or mint which issued it was a quality assurance that the coin really contained that much gold and this spread to the use of gold for other purposes, particularly jewelry and today gold is always stamped with a “hallmark”.

It is this link to the financial worth of currency which creates most of the demand for gold today. Paper money is just that – paper – it is a promise that the bank or treasury department of a nation will pay that “value” which is promised on the paper (a dollar, $5, $10 or whatever). It used to be that for every $1 issued as paper, there would be $1 in gold stored at Fort Knox or the Federal Reserve Bank in New York – everyone had confidence in accepting the dollar bill simply because the US government had the gold to make sure it held its value. In depressed times, the value of “paper” would become suspect or in relative terms, the paper money would lose its value relative to other currencies or assets – investors would therefore look to put their money into other valuable assets which would not be affected by the economic recessions and gold was an obvious choice.

Traditionally, when economic hard times appear, savvy investors will turn to gold to invest in because its value increases dramatically when recession appears. The current recession is a good case in point – three years ago, gold was bought for between $300 and $400 an ounce – this year if broke the $1,000 an ounce limit and is still costing more than $900 an ounce today with recovery looming.

This is why it is a great idea to sell gold at this time – you are highly unlikely to get a better price for the gold you have if you hold onto it. Many people considering selling their old jewelry and selling their old gold coins to raise some extra, much-needed cash to balance their tightening budgets cannot wish for a better time than the present to make the transaction. Gold supplies are low, which drives up the price of your old gold; investors are in dire need of gold. This means when you come to make enquiries about selling it, you are very likely going to be very surprised at the price you will be offered but a word of warning – as soon as the recovery is established, the prices being offered will drop drastically and they will do so very quickly as investors holding gold unload it onto the market in order to use the cash raised to reinvest back into stocks and bonds.  Companies are also buying platinum and palladium, as well as certain gemstones, so go through your jewelry box and see if you can sell your jewelry for a profit.