Do you know about gold and silver? If you`re a forex trader, you need to pay attention to them for one good reason: you can use them as investments.
Gold is a chemical element that has been given the symbol of Au. It comes from the Latin word “�aurum,” which means shining dawn. Perhaps it`s because its bright yellow reminds you of the first rays of the sun. In the table of elements, its number is 79. It is considered to be the most valued precious metal in the world, because it can be used for so many things. You can fashion jewelry, coins, and works of art.
This precious metal can also be utilized for monetary exchange. As mentioned, gold was used in the creation of coins. These coins were the ones that were circulated in the trading market. Today, gold can be in the form of gold convertible instruments. This means that you can exchange these paper instruments to their corresponding gold reserves based on gold standards. It`s also possible that you can still receive gold coins.
There are also other investors that literally keep gold bars or bullion coins. They can be used as a form of a hedge or a security just in case there`s inflation or economic recession. In the forex market, gold is known as XAU.
One of the pressing issues regarding gold today is that the amount of the precious metal that is being mined has been declining. This could be because there`s a limit as to how much gold the earth can produce. Moreover, due to unpredictable amount of mined gold, the exchange rate of gold and currencies has become unstable. The shortage also reduces the value of gold in the forex market. It is only but a small fraction. It has also been affected by the growing trading of various foreign currencies.
Then there`s silver. This is also another kind of precious metal. It is also as flexible as gold since you can produce ornaments, pieces of jewelry, silverware, and other crafts out of it. It is also currently used in creating conductors, while the compounds are added to make films for photography and disinfectants. The precious metal can also be fashioned into coins.
Like the major currency pairs, the value of silver will depend on the gold price. A long time ago, a number of countries had opted for a fixed ratio for both these precious metals. The United States had it at 1:15, where every unit was measured in troy ounce. The ratio then meant that if you would buy 1 troy ounce of gold, you would get 15 troy ounces of silver. In 1803, France followed suit, which had the ratio at 1:15.5. The higher the ratio, the more affordable silver is to gold. Lately, though, the value of silver has also become very volatile.
Investing in Gold and Silver
One of the foremost reasons why you should still consider investing in gold and silver is security. It is so unlike currencies where they remain an idea until you will be able to cash them out. Silver and gold are already precious metals. You can touch, see, and sell them. If the economy goes out of whack and you can hardly trust the currencies in the forex market, you can rely on your gold and silver. All you need to do is to look for the demand, and so far, the demand rate has been very high for so many years.
They have also proven their worth for hundreds of years. As mentioned, the earliest forms of metals used in creating coins are gold and silver.
They are also two of the financial assets that you can keep private. You can store them in the most secured place in your home. You are not compelled to use them in the financial system. There`s also no need for you to transfer any title. These are not tied to any kind of document. They are also not tied to any liability. Your cash will have to be dependent on the government, which has to dictate its value in the market. Gold and silver are not under the control of the government.
When you want to invest in gold and silver, the first thing you need to consider will be the kinds of coins you`re going to buy. There are only few choices of gold bars or coins than the silver ones. If you want to buy gold, you should look for American Eagle, Canadian Maple Leaf, and Krug. Silver coins can include Silver American Eagle, Silver Rounds, and Kennedy Half-dollar.