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The volatility of gold prices offers a lot of opportunities to buy and sell gold. But, investors must have knowledge of the gold market first before they make an investment. With gold coins continuing to become a famous purchase option, there are some mistakes that starters can make when they enter the gold market. Below are some of the common mistakes:
Buying Scrap Gold
Some investors, being so obsessed about gold, may just buy anything gold. Gold jewellery pieces are not like gold coins. Scrap metals are not dependable investments. Only a few buyers will be interested in them and if you collect a lot of them, you need to melt down and purify them. The reason is that jewelry-grade metal is usually cut with other metals to ensure more durability. If you want gold that you can sell, gain some knowledge of melting, fabricating, and assaying the gold.
Failing to Check Purity
Getting a deal on gold is a no-brainer especially if you just purchase impure gold. But, purchasing alloy metals is not a worthy investment for your future. A number of gold coins are 90% pure while others are 99%. In fact, there are 99.99% pure gold coins. Very pure gold tends to be really soft but with more value.
Purchasing without Comparing Prices
Just like any other purchases, a gold purchase should not be done without comparing many dealer prices. Do not purchase gold coins just after you check out a dealer or two. Visit precious metal exchanges to know spot gold prices that dealers post. Always exercise caution in this regard. You don’t want to overpay for coins that have little value. Check out reasonable prices at city gold bullion.
Thinking that Value is Forever
Investors may think that the value of gold coins would remain the same the time they bought them. But, gold prices tend to fluctuate. Because of this, make sure you only purchase gold coins as a hedge against losses should currency are devalued. You may need more than gold to build wealth.
Purchasing with Leverage
A lot of investors leverage a valuable item to purchase gold coins. But, the volatility of gold means that investors may not get a return from their investment. Investing in gold coins is not the same as cash investments. You buy gold as a protection instead of increasing your wealth. Therefore, purchase coins with what you can afford. Also, ensure you read the contract with your dealer carefully to find possible hidden leverages.
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