Learn About The Price Of Gold Bullion From Gold Dealers

Becoming a gold bullion investor can feel intimidating for first-timers and you may have a number of questions. Who sets the price of gold, what is long- and short-term hedging and should you be worried about it, and how do you buy gold online? Below, you should find some explanations, but you should always contact gold dealers directly or talk to a financial advisor about investment decisions.

Who Sets The Gold Price?

On the stock market, stock prices can change up to the minute – it’s why you see real time stock tickers and newscasters announce where a stock or a currency “finished the day.” The price responds in real time to supply and demand, whereas the price of gold is determined twice every business day by the London gold fixing. The members of London Gold Market Fixing Ltd., which sets the spot price of gold, include banks from around the world, including Barclays, Scotiabank, and the Société Générale. The participants essentially determine the price of gold based on how much gold members intend to buy and how much is for sale, raising the price when demand exceeds supply.

Why Gold Dealers Hedge

Gold works best as a long-term investment and as a hedge against inflation, stock market drops, and general economic uncertainty. But how do gold dealers weather the daily fluctuations in the price of gold and silver? They hedge between their long and short-term positions, selling physical gold as well as gold futures contracts, which are agreements to sell and deliver gold at a fixed price at a future date. The gold dealer loses out if the day-of price is above the futures contract price, but the risk buys them security if the price goes down. It’s a position that places security over high-risk, high-reward investment.

What You Need To Know About Buying Gold Online

Many gold bullion investors prefer physical gold over futures or ETFs – they want the real thing because there’s no third-party risk and they want the reassurance of the real deal, not an agreement or a piece of paper. These investors are better off letting gold dealers worry about futures and the day-to-day price fluctuations while they focus on the long-term and diversifying their portfolio with physical gold.

When you buy gold online from a dealer like Silver Gold Bull, one of the largest gold dealers in Canada, you pay the price at which you lock in your purchase. Prices are binding once you have created an order number, and this also applies when you’re selling. If you’re using a credit card or PayPal, you will have to pay the full price over spot (a fee for handling the transaction), but you can get a cash discount by paying with a wire transfer, Bitcoin, cheque or money order, Interac online, or e-transfer. For more information on buying cheap gold and payment methods, stop by Silver Gold Bull and check out their Q&A section. It’s then either shipped to you or you can store it with the gold bullion dealer. You can get allocated and insured storage from Silver Gold Bull, or you can store it yourself in a home safe or a safe deposit box at the bank. Buying gold online is simple and straightforward, even for the first-time investor.