| In 2004 a man went onto the internet and | | | | gold increases, because the lower the value of a |
| offered to trade a paperclip for a house. Of | | | | dollar, the more of it is needed to buy an ounce |
| course, no one took him up on it, but they did | | | | of gold. This is good news for bullion investors. |
| trade him for something a little larger. This man | | | | Dan diBartolomeo said in 2007: "While the gold |
| kept trading up, the trade rarely had much | | | | price is the single most influential force in |
| monetary value. Sometimes its only value lay in | | | | determining the behavior of gold mining shares, |
| the fact that it was part of the scheme. The man | | | | gold stocks are not nearly as sensitive to gold |
| now lives in his house in western Canada. The | | | | prices as current financial models suggest they |
| house he traded up from a paperclip. There are | | | | should be." "Putting realistic numbers into the |
| many investment strategies for managing a bullion | | | | formula, the remarkable aspect begins to take |
| or precious metals portfolio. It is one of the most | | | | shape. Assuming that the price of gold is $400 |
| secure ways of investing small and building up. | | | | per ounce and direct mining costs are $300 per |
| And, it is easy to trade. You can trade bullion for | | | | ounce. The gross profit is $100 per ounce. Note |
| almost anything - at a profit. The desire to own | | | | that the value is linearly related to this gross |
| gold is so strong that many people will undervalue | | | | profit. If the price of gold changed to $500 per |
| their own services or products in an effort to | | | | ounce (a 25% increase), the gross profit would be |
| obtain gold bullion. If only they knew how easy it | | | | $200 per ounce, and the forecast price of the |
| was to buy on the internet. The trick is to stick | | | | stock would rise 100%. The percentage change in |
| to the large trading houses. While there is a coin, | | | | valuation of the equity position is four times as |
| or bullion trading company in every small city, | | | | great as the percentage change in value in the |
| there are different qualities and grades of gold. | | | | commodity asset." The strategy is to purchase |
| Even the slightest variation in weight can change a | | | | gold, at real value, and trade it for commodities |
| 'good deal' to a con. The important thing to | | | | which are normally purchased with paper money |
| remember is that investing in coins, and investing | | | | and currency. This type of trading gives the bullion |
| in bullion are two different things. A coin has a | | | | investor more leverage when making a purchase. |
| fixed value attached to it. This value increases, or | | | | Another way to invest is by buying futures and |
| decreases, depending on how many people want | | | | speculating on the market. At the moment, |
| to buy that particular coin. The value has | | | | speculators have gold about $700 (summer |
| everything to do with the country that 'minted' | | | | 2007), but you can purchase gold coins for $500. |
| the coin. It has nothing to do with the quality, or | | | | Speculating is a gamble, but when dealing with |
| quantity, of precious metal in the coin. Bullion on | | | | bullion, the 'losses' are predictable. As the world |
| the other hand has no markings. Its value is 100% | | | | becomes more wealthy. As third world countries |
| dependent on the quantity, and purity of the | | | | enter the manufacturing sectors, and as the |
| metal. It is not held by the constraints of the | | | | standard quality of living increases around the |
| dollar. However, as the dollar drops, the value of | | | | world, bullion will become more valuable. |