An investment in gold can be done through physical purchase or securities trading. The purchase of gold bullion and bullion coins is possible with banks, precious metals and coin dealers. When storing in a locker at a bank rental, insurance costs are charged.
Investors can invest directly in the market or via brokers in certificates, funds or exchange-traded funds (ETFs). This aspect entails physical delivery. Certificates are dependent on the solvency of the issuer and do not affect the demand situation of the material.
The acquisition of shares of gold mining companies offers the prospect of higher returns in the form of price increases and dividends than with the physical precious metal. These investments also include higher risks, such as loss of production as a result of tunnel collapses, management failures, strikes, higher credit costs or capital increases due to political influence.
Shares of gold mining companies offer great value, as they confer an interest in the physical capital of the company, that is, the shareholder owns a share of the gold still in the ground.
The price of gold arises from the interplay of fundamental data such as market supply of and demand for gold, but is also influenced by shorter-term events and speculation as well as long-term expectations. Other factors that influence the gold price are the oil price and the current value of the U.S. dollar, as gold is traded in that currency.
The gold circulation in the framework of state institutions took off in the early Middle Ages. On the other hand, money had developed increasingly into a medium of exchange, which served in trade and market development.
The original gold as a payment lost in importance, and was only hoarded as a store of value. Most empires changed to the silver currency, as gold was rare and more expensive than silver.
In economically quiet times, paper money is exchanged for a real value with the expectation that at an unspecified date in the future a larger amount of paper money for the same amount of gold will be derived.
In times of runaway inflation or hyperinflation, however, paper money is exchanged with gold to accumulate fortune.
The gold plant is particularly lucrative in times of negative rates, since the devaluation (inflation) is greater than the interest yield, which is obtained by a short-term investment in interest rate securities.
The global gold price offers are valid beyond the opportunity to profit by exceeding certain magnitude of the currency depreciation in other currency areas.
The price of gold is used by some investors as an indicator of future expected inflation, since the flood of fresh liquidity is first experienced in the financial markets and only later in the real economy through price increases.
However, the price of gold depends also on many factors, which include non-calculable elements. It is also noted that gold is dependent on the world market and thus cannot always be concluded on the inflation risk of a particular currency.
Investment in the gold standard is designed for the protection of assets otherwise known as gold bugs. Investors often disfavor the monetary standard, which consists only of paper money, and look at gold as money.
Digital Gold Currencies are micro-payment systems that claim to be based on the gold standard. In this regard, current accounts are held in gold and they work in a similar fashion to the PayPal system. But with the difference that deposited assets, are automatically covered by physical gold. Operators of online monetary systems include e-dinar, Gold Exchange, Gold Money and Pecunix.