The best type of gold for short term investors is usually gold bullion. As the price of gold bullion moves up, it is possible to buy gold bullion coins or gold bullion bars, selling at a later date for a profit. Depending on the economy, interest rates, the national debt and the strength of the US dollar gold prices may rise or fall. However, gold bullion prices today are four times what they were ten years ago.
Short term gold investors typically hold onto their gold bullion investments for 14 months to 2 years before selling. This gives the gold market time to advance and for the investor to buy on a pull back and sell at a peak. It also allows the short term investor to take a long term capital gain on his or her profit which is usually better than paying the regular tax rate of capital gains on assets held less than a year.
A reputable gold exchange will normally sell ten ounce and larger lots of gold bullion coins or bar at between 5.5% and 7% above the spot price of gold. Even this small markup on the spot price of gold will eat into profits if the short term investor buys and sells on small gains over short intervals.
Bullion is the best type of gold for short term investors but there is one potential problem with holding gold bullion for long term investment. The United States and the world are in the worst recession since the Great Depression. In 1933 at the start of the Depression the United States president issued an executive order for all persons to turn in their gold coins and bullion. The only exempted items were rare gold coins where the value of the coin was substantially above its price as gold bullion.
As the United States contemplates increasing its national debt by trillions of dollars a year the possibility of another confiscation of gold bullion arises. This possibility reasonably limits gold bullion to being the best type of gold for short term investors and makes certified rare coins the investment of choice for long term gold investing.
For useful information about bullion products for short investing feel free to call 1-800-300-0715 and talk with one of our gold experts. We would enjoy talking with you.