Whether gold comes in bars, coins or as a gold ring, it is always gold. Although some fluctuations are to be considered, as with every investment, gold has proven itself a stable investment time and time again. The never-ending obsession with gold, as an investment or a wealth and social status indicator, has been going on for centuries. But how is the price of gold actually calculated and why is it such a worthy investment?

  • How is the price of gold calculated?
  • Why is buying gold a smart addition to my portfolio?
  • In which form should I buy gold?

How is the price of gold calculated?

The cost of gold is actually very simple to calculate. It is based on the day’s spot price which is always calculated in US dollars and more importantly, it applies to the entire world with no exception.

When looking for the spot price of gold, it is important to visit official websites such as Nasdaq, which is one of the main global electronic marketplaces for buying and selling securities. Nasdaq was created in 1971, by the National Association of Securities Dealers (NASD) in order to allow investors to trade securities on a computerised and transparent system.

When buying gold, although the price is official and the same for everyone, what varies are the additional brokerage fees of the broker that is facilitating the transaction. Unfortunately, an individual cannot purchase commodities such a gold directly by themselves. These fees can vary considerably from 5% to as high as 50% so it is important that you speak to various brokers before deciding to invest.

Why is buying gold a smart addition to my portfolio?

Over the decades, gold has proven to be one of the world’s favourite investments for various reasons. From the fact that it is mostly risk adverse during recessions and is hardly influenced by stock market fluctuations, to it being a proper hedge against weak global economy. Gold has proven its worth. The fun fact about gold, is that you do not necessarily have to buy a virtual stake in gold that is stored in a bank safe through exchange-traded funds.

You can physically own gold bars, coins, gold rings and more, giving individuals a greater sense of ownership and security.

In which form should I buy gold?

For investment sake, adding easily liquidated gold bars are the best bet. Even when the market fluctuates, gold bars can easily be kept safe until the price rises again. When looking for valuable jewellery, gold adds timeless class and added value to the jewellery as a piece. The piece, however, is best bought as a jewellery piece rather than an investment. Although vintage and antique gold jewellery can become priceless, not every piece experiences the same added value over time since many factors affect the added value. Gold jewellery makes for a very valuable and emotionally rich jewel, while gold bars are the smarter investment.

The same cannot be said for diamonds in jewellery. Diamonds keep their investment value no matter which form they take, whether they are part of valuable jewellery or loose investment diamonds.

BAUNAT is the leading online jewellery brand with a stunning collection of gold rings and more, to make your every gold wish come true. Do not hesitate to browse through our collection and through our inspirational insights for more articles about how investing in gold rings and diamonds would be a very smart move going forward.

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SANDER MICHIELS