precious moments price guide by itsmuchfaster


									                       A TIMELESS, AND                                                              GOLD IS THE FOUNDATION OF A PROPERLY
                                                                                                    BALANCED INVESTMENT PORTFOLIO
                                                                                                                                                                   How to buy gold

                         VERY TIMELY INVESTMENT                                                                                                                    Gold is easy to buy, sell and store. It is available at coin
                                                                                                                                                                   and precious metals dealers and selected banks and
                                                                                                                                                                   brokerage firms across the U.S. and around the world.
                      For thousands of years, gold has been prized for its rarity,                                           High risk                             You can make purchases in virtually any amount, ranging
                      its beauty, and above all, for its unique characteristics as
                                                                                                                                                                   from a fraction of an ounce upward. The weight and purity
                      a store of value. Nations may rise and fall, currencies
                                                                                                                                                                   of gold coins and bars are precisely controlled and stan-
                      come and go, but gold endures.                                                                       Moderate risk                           dardized by internationally-recognized refiners and mints,
                      In today’s uncertain climate, many investors turn to gold                                                                                    allowing you to buy with confidence and sell with ease.
                      because it is a “currency without borders” — an important
                                                                                                                                                                   Gold bullion products are based on the underlying price
                      and secure asset that can be tapped at any time, under
                                                                                                                              Low risk                             of gold bullion, plus a small premium. As with any invest-
                      virtually any circumstances.
                                                                                                                                                                   ment, it is always advisable to check the terms of the
                      But there is another side to gold that is equally important,                                            GOLD                                 purchase agreement, procedures and prices offered by
                      and that is its day-to-day performance as a stabilizing                                                                                      the dealer. Prospective investors should consult their
                      influence for investment portfolios. These advantages are                                                                                    financial advisor regarding tax laws or other circumstances.
                      currently attracting considerable attention from financial                    Gold responds when you need it most
       YOUR GUIDE     professionals and sophisticated investors worldwide.                          Recent independent studies have revealed that traditional

                                                                                                    diversifiers often fall during times of market stress or in-   Buying gold bars                                               The bars are
                      Gold is an effective diversifier                                              stability. On these occasions, most asset classes (including   International refiners make it convenient for investors to     generally stamped
THE VALUE AND THE     Diversification helps protect your portfolio against fluctua-                 traditional diversifiers such as bonds and alternative         own bullion by offering gold bars in a variety of weights      .995 (99.5% pure gold) or

                      tions in the value of any one asset class. Gold is an ideal                   assets) all move together in the same direction. There is      and sizes, ranging from one troy ounce to 400 troy ounces,     higher purity, along with the individual bar’s weight. Gold
                      diversifier, because the economic forces that determine the                   no “cushioning” effect of a diversified portfolio — leaving                          the size of an internationally-traded    bullion bars can be purchased from selected commercial
 ACQUIRING GOLD.      price of gold are different from, and in many cases opposed
                      to, the forces that influence most financial assets. As the
                                                                                                    investors disappointed.                                                                     “London good delivery” bar.
                                                                                                                                                                                                    (One troy ounce equals
                                                                                                                                                                                                                                  banks, brokerage houses, and precious metals dealers.

                                                                                                    However, a small allocation of gold has been proven to
                      chart below indicates, gold prices tend to move in the                                                                                                                           1.09714 regular            Buying gold coins
                                                                                                    significantly improve the consistency of portfolio perform-
                      opposite direction of stocks.                                                                                                                                                       or avoirdupois          Gold bullion coins are popular with investors because
                                                                                                    ance, during both stable and unstable financial periods.
                                                                                                                                                                                                           ounces.)               they combine intrinsic value with artistic beauty. The
                      RETURNS OF GOLD AND STOCKS                                                    Greater consistency of performance leads to a desirable
                                                                                                                                                                                                                                  bullion coin represents an investment in pure gold, and
                      20%                                                                           outcome — an investor whose expectations are met.                                                       Broker commis-
                                                                                   1998–2001                                                                                                                                      because it is legal tender, the country of origin guarantees
                                                                                                                                                                                                            sions on buying
                      15%                                                                                                                                                                                                         its authenticity. The bullion coin bears a face value that
                                                                                                    Gold is highly liquid                                                                                   and selling gold
                                                                                                                                                                                                                                  is largely symbolic; its true value depends on its gold
                      10%                                                                           Gold can be readily bought or sold 24 hours a day, in                                                   bars are minimal,
                                                                                                                                                                                                                                  content and the daily price of gold.
                                                                                                    large denominations and at narrow spreads. This cannot                                                 and in most cases,
                                                                                                    be said of most other investments, including stocks of                                                purchasing bars is      Bullion coins are minted in a variety of weights ranging
                        0                                                                           the world’s largest corporations. Gold proved to be the                                             the most cost-efficient   from 1⁄20 of an ounce to 1 kilogram. Bullion coins can be
                                                                                                    most effective means of raising cash during the 1987                                             means of owning gold.        easily bought and sold virtually anywhere in the world.
                       -5%                                                                          stock market crash, and again during the 1997/98 Asian                                      Bars bearing the “hallmark”       Prices for popular one-ounce coins are quoted daily in
                                                                                                    debt crisis. So holding a portion of your portfolio in gold                          (logo) of internationally recognized     most of the world’s newspapers. Prices for bullion coins
                                                     S&P 500                                        can be invaluable in moments when cash is essential,           refiners are the easiest to sell. These refiners “assay” or    are based on the underlying price of gold bullion, plus a
                      -15%                                                                          whether for margin calls or other needs.                       test the metal for its purity or fineness.                     small premium.
                         6/98 9/98 12/98 3/99 6/99 9/99 12/99 3/00 6/00 9/00 12/00 3/01 6/01 9/01
                                                                     GLOSSARY OF GOLD TERMS
BUYING GOLD BULLION:                                                 Assay: To test a metal for purity.     Legal Tender: The coin or
                                                                                                            currency which the national mon-
                                                                                                                                                                               Founded in 1987, and headquartered in London, the

YOUR CHOICES                                                         Bid/Ask: “Bid” or “buy” is the
                                                                     price a dealer is prepared to pay
                                                                                                            etary authority declares to be                                     WORLD GOLD COUNCIL is a not-for-profit organization
                                                                                                            universally acceptable as a medi-                                  funded by the world’s leading gold mining companies
                                                                     for gold bullion. “Ask” or “sell”      um of exchange; acceptable for
 Where to buy gold bullion:                                          is the price offered by the seller.                                                                       to promote the many uses of gold. The Council, which
                                                                                                            instance in the discharge of debts.
 Available at coin and precious metals dealers and selected banks    (See also definition of “Spread”
 and brokerage firms across the U.S. and around the world.           below.)                                Liquidity: The quality possessed                                   operates in 22 countries around the world, is an authori-
                                                                                                            by a financial instrument of being                                 tative source for research on gold and its role as a
                                                                     Bullion: Refined gold that is at       readily convertible into cash with-
 Bullion Coins:                                                      least 99.5% pure, usually in the       out significant loss of value.                                     portfolio diversifier. (Although the Council does not
 American Eagle, Australian Nugget, Austrian Philharmonic,           form of bars, wafers or ingots.
 Canadian Maple Leaf, Mexican Peso, South African Krugerrand.
                                                                                                                                                                               sell gold, it does facilitate informed decision-making by
                                                                                                            London Fix: The twice-daily bid-
                     1   1   1   1
                                                                     Bullion Coin: A legal tender coin      ding session in London of the five                                 disseminating information to investors and portfolio
 Sizes: Available in ⁄20, ⁄10, ⁄4, ⁄2, one ounce and one kilogram.
                                                                     whose market price depends on          major gold traders, at which the
 Price: Based on the price of gold, plus a small premium.            its gold content, rather than its                                                                         managers.) The Council also encourages the use of
                                                                                                            gold price is fixed or set. The
                                                                     rarity or face value.                  London Fix provides the basis for                                  gold in jewelry, explores new industrial applications,
 Bars and Wafers:
 Bars bearing the “hallmark” (logo) of internationally recognized    Face Value: The nominal value          many gold contracts worldwide.
                                                                                                                                                                               and advocates gold as a reserve asset for the world’s
 refiners are the easiest to buy and sell. The bars are generally    given to a legal tender coin or cur-   Numismatic: Coins that are val-
 stamped .995 (99.95% pure gold) or higher purity, along with the    rency (for example a 1-oz. gold                                                                           central banks.
                                                                                                            ued for their rarity, condition and
 individual bar’s weight.                                            American Eagle coin has a face         beauty beyond the intrinsic value
 Sizes: Range from one gram to 400 ounces.                           value of $50).                         of their gold content. Generally,
                                                                                                            premiums for numismatic coins                                      make an investment in gold
 Price: Based on the price of gold, plus                             Fine, Fineness, Fine Gold: The
 a small premium.                                                                                           are higher than for bullion coins.
                                                                     quantity of pure gold contained in
                                                                     1,000 parts of an alloy. A normal      Option: The right, (not the
                                                                     “good delivery bar” of 0.995 fine-     obligation), to buy or sell a com-
                                                                     ness contains 995 parts of gold        modity or a financial security on
                                                                     and 5 parts of another metal.          a specified date in the future.
                                                                     Gold is produced in bars up to a
Gold is the ideal gift                                               purity of 999.9 (often referred to     Pennyweight: An American unit
In many cultures, gold serves as a family treasure or a              as “four nines”).                      of weight for gold. Twenty penny-

                                                                                                                                                                                                                                           THE GOLD GUIDE
                                                                                                            weights equal one ounce.
wealth transfer vehicle that is passed on from generation            Futures Contract: A firm com-
to generation. Gold bullion coins make excellent gifts               mitment to make or accept deliv-       Premium: The amount by which
                                                                     ery of a specified quantity and        the market value of a gold coin
for birthdays, graduations, weddings, holidays and other                                                    exceeds the actual spot value of
                     occasions. They are appreciated as
                                                                     quality of a commodity on a spe-
                                                                     cific date in the future.              its gold content. Part of the pre-
                                                                                                                                                  make an investment in gold
                                                                                                            mium is recovered by the seller
                            much for their intrinsic value           Gold Standard: A monetary sys-         at resale.
                                 as for their mystical appeal        tem based on convertibility into
                                                                     gold; paper money backed and           Restrike: A modern replica
                                     and beauty. And                                                        of previously issued coins.
                                                                     interchangeable with gold.
                                       because gold is                                                      Governments and their mints can
                                                                     Grain: One of the earliest weight      choose to “restrike” a previous
                                         available in a wide         units used for measuring gold.         issue rather than introduce new
                                          range of sizes and         One grain is equivalent to 0.0648      coinage.
                                           denominations,            grams.
                                                                                                            Spot Price: Sometimes referred                                                                
                                            you don’t need           Hallmark: Mark, or marks, which        to as the cash price. The current
                                                                     indicate the producer of a gold bar    price in the physical market for
                                           to be wealthy
                                                                     and its number, fineness, etc.         immediate delivery of gold.
                                           to give the gift
                                                                     Karat: Unit of fineness, scaled        Spread: The difference between
                                          of gold.                   from one to 24. 24 karat gold (or      Bid (the price a buyer is prepared
                                                                     pure gold) has at least 999 parts      to pay for gold) and Ask (the price
                                                                     pure gold per thousand; 18-karat       a seller offers) prices.
                                                                     has 750, parts pure gold and 250
                                                                     parts alloy, etc.                      Troy Ounce: A unit of weight,
                                                                                                            equal to about 1.1 avoirdupois
                                                                     Kilo Bar: A bar weighing one           (ordinary) ounces. The word
                                                                     kilogram – approximately 32.1507       ounce when applied to gold,
                                                                     troy ounces.                           refers to a troy ounce.

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