From Kruger Rands and Gold Bars to JSE

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Like all commodities in the world, the value of gold is determined by supply and demand. Because gold is a non-renewable resource, the likelihood of it running out or becoming too difficult to mine is becoming more of a reality. Therefore gold’s value is more likely to increase. Over the past 10 years the value of gold has doubled and is expected to double its current value in another five years.


Gold as an investment commodity is becoming more and more popular. The main reason for this is because gold’s value is a lot more stable than other commodities or investment opportunities (such as buying shares). Gold’s value also doesn’t decrease by much, if it does drop. The probability of gold becoming more and more expensive over the next few years is quite high, especially with South Africa’s economy being close to junk status (South Africa is the world’s leader in gold production). Mining will become more expensive and mines will no longer be able to afford to mine gold, which will push gold’s value and price up tremendously.


There are four main ways in which you can invest in gold.  The first being purchasing Kruger Rands, the world's most widely held and actively traded gold bullion coin. Secondly you can purchase minted gold bars; they are made from gold blanks that have been hand cut to the required dimensions from a flat piece of gold. Cast gold bars are made by pouring molten gold into an ingot mould to shape the gold product. Finally you can use the JSE with Exchange Traded Funds (ETFs). Through ABSA capital you are able to trade in gold on the Johannesburg stock exchange in a safe and secure manner.


Investing in gold can sometimes seem as quite risky and many people are not willing to take a risk. Actually, there are not many risks in investing in gold. Gold is a lot more stable than currencies and has a higher and greater chance of a return on investment. The likelihood of you making a loss when investing in gold is very low. It is also one of the more risk free ways of investing. However, if you intend on investing in gold, your initial investment is going to be expensive, because the price of gold is high. You will also need to take note that gold is valued in US dollars, therefore the rand price is going to be steep.


In conclusion, even though it is an expensive investment to make, the risks in investing in gold are low.  You will be making a greater return from your investment over a shorter period than you would with any other investment (unless you really know how to work the stock market). In other words, when you invest in gold, you do not have to wait for years to see the benefits; you will see them practically immediately. Plus, the longer you invest in gold the greater your benefits are going to be!

 

 

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