Tuesday, July 29, 2014

Investing in gold

Gold became a popular investment alternative in the aftermath of the 2008-09 financial crisis, amid worries that excess money creation by central banks would lead to currency debasement.  

The metal rallied 70% from January 2010 to Sept. 6, 2011, when it peaked at $1,921.17 an ounce. It then retreated to as low as $1,183 near the end of 2013. So far in 2014, the metal has rallied 11% year to date, to a recent $1,336 per troy ounce (July 2014).

1 troy ounce = 31.1034768 grams
The troy ounce is about 10% heavier than the "normal" ounce.
 So an ounce of gold would weight ~ 2.8 grams more than an ounce of sugar.

  • All gold currently above ground (~170,000 metric tons) could fit into 2-1/2 Olympic-sized pools
  • Annual gold production globally is roughly 3,000 metric tons.
  • Annual increase in production is about 1.75%, comparable to population increase.
  • A lot of the physical gold that's above ground has migrated to Asia. Imports into China have been at record levels, and India is a big buyer of gold, as well. There is less gold in Western vaults than there was a couple of years ago. But because Asian investors tend to hold their gold—they don't view it so much as a trading vehicle—it may not be available, should there be a rise in investment demand in the West. 

Gold prices 1971 - 2014 in 3 waves

2013 1 oz Gold American Eagle
Coin Highlights:
  • Contains 1 oz actual gold weight.
  • Eligible for Precious Metals IRAs.
  • Obverse: Adapted from Augustus Saint-Gaudens’ famed Gold Double Eagle design, which features Lady Liberty walking confidently against the sun’s rays.
  • Reverse: Designed by Miley Busiek, the reverse shows a male bald eagle in flight carrying an olive branch to his nest, where a female awaits with her young.
  • Minted at West Point, N.Y.
  • Price $1,389.59 (9/13)
Most popular coins http://www.apmex.com/apmextop40

Gold vending machines

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