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When to buy gold?

Gold - when to buy?

The main principle of investing is to buy cheap and sell expensive.  The same is true of gold - it is better not to wait with a purchase for the arrival of the crisis, because then gold will be more expensive than during relatively calm times.

It is best to buy gold when the market sentiment is worst and everyone sells it. Of course, this is not easy to predict, so you can consider systematically buying small quantities, which is the average purchase price.

However, it should be remembered that the main purpose of investing in gold is its insurance function.  Looking at gold as a kind of insurance policy and considering it in the long term, short-term price fluctuations are no longer relevant, and adjustments are not a cause for concern, but rather an opportunity to buy some gold.

Where to buy gold?

We only purchase gold from well-known and recognized banks and dealers.  Their long and extensive range of activities makes it practically impossible to cheat and allows for a better price, since the higher the turnover of the seller, the lower the price he can offer to the customer.

For this reason, we should be sceptical about the unusual pricing opportunities of small players.

When buying gold directly from a dealer, we should be given a better price, but it is important to choose only those dealers who operate in the form of a capital company (with the highest share capital possible), preferably a public limited company operating on the stock exchange (increasing the transparency and security of business operations).

Let's also choose retailers who deliver goods at hand.  Investors should avoid timely delivery, which entails the risk of a contractor (banking a dealer) - a reliable seller always has a certain amount of bullion in stock, cash and carry is a basic rule in this business.

The last important  to be considered when choosing a seller is whether or not it offers a guarantee of repurchase, which is common practice in the West and testifies to the professionalism of the seller.

In addition, purchases by auction portals should be avoided, which entails significant risks. After all, it is worthwhile to pay some extra money, but have guaranteed safety.  After all, the purpose of investing in gold is to protect capital, so it would be extremely reckless to risk losing it as a result of Internet fraud or buying tungsten counterfeit, in order to save a few dollar (hence the need to buy gold only from well-known producers with appropriate certificates of authenticity).

Gold is real money and should also mean the highest level of security. Apart from that, when buying on auction portals, it is not certain that we are saving money because, according to the law, the purchase of gold from an individual who does not conduct business activity is subject to a civil law transaction tax of 2% of the transaction value.

How to store gold?

There are two ways of storing gold: at home at home and in an insured private company's hiding place.  However, if the purpose of gold is to protect the property from uncertain times, then it is best to store gold at home - we have full control over it.

Gold deposited with financial institutions can be nationalised, as happened in the USA in 1933.

How do I resell gold?

The decision how to sell our gold is just as important as the seller's choice.

Also in this case it is best to go to a reputable dealer - preferably the same dealer from whom we bought bullion beforehand.  Professional sellers guarantee the possibility of repurchase, while the bullion purchased from them is bought at slightly better rates.

A separate issue is when to sell bullion. If we are interested only in price movements, it is, of course, as expensive as possible. However, if we treat gold as an insurance of our investment portfolio, we should rather not dispose of it (or even increase it as our assets grow) - unless we are in an emergency situation.

However, we should first use the cash reserve at that point in time, which should be equivalent to three months' expenditure.


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