Don’t Buy Gold at Retail, Invest in Gold at Wholesale Prices

Buying Gold at Wholesale
Wholesale gold prices are determined by how much it costs to mine and refine it.  Only through investment in the mining itself can gold ever be bought at wholesale prices.  There is only one way to profit, while limiting risk.  It is through mining where gold has already been found, in proven gold reserves, that gold mining becomes just an extraction business.  Extracting gold with conventional mining now costs about $300 per ounce.  Gold extracted from a mine is then sold to gold brokers at just below retail price, who mark up the price.  Investment in a proven gold mine, is not just “prospecting”, it is an investment in gold at about $300 per ounce, which is sold at the current price, about $1,600 per ounce. That is a 500% gain, which is definitely a “for profit” investment.  Now let’s say that gold does drop in price, to say to $800 per ounce, wholesale investors never worry, because they still more than double their investment.  That’s a nice safety net.

Buying Gold at Retail
Currently, in January 2013, the retail market or “spot” price of gold is around $1,600 per ounce.  A retail gold buyer will usually pay a broker’s commission on top of the spot price, which means that the price of gold has to go up by this amount for the investor to just break even.  Increases in the price of gold translate to a relatively small profit margin, compared to buying the same amount of gold at wholesale prices (i.e., gold in the ground).  Buying Retail gold is therefore more of a purely asset protection strategy, rather than an investment strategy.   We offer you the option of buying gold at wholesale.

Protect Your Assets With Gold
In turbulent economic times like these, converting wealth to gold has historically provided a good hedge against inflation, or the loss of actual value.  Gold is a tangible commodity with real world uses, and it has always kept its value, especially during periods of economic uncertainty. since there is a finite amount of it, limited by how much of it has at any time been mined from the ground.   Gold has been outperforming the dollar, real estate and most other investments.  The price of gold has steadily ratcheted upward.  No one has a crystal ball, but most financial experts believe that the price of gold will continue to rise.

Recommendations
It is our recommendation that US investors invest in gold mines located within the USA. (It is easy to put your money into mines located in another country, but sometimes VERY DIFFICULT to get it out!).  Only through a complete geological study, including properly assayed core samples can a mining project accurately estimate the rate of return on investment.  A mining project that has complete core samples and knows the rate of return may limit returns on investment to as low as a 3-1 or 5-1.  The limited risk of proven reserves outweighs any potentially empty promises of astronomical returns usually offered by exploration projects.

Proven Versus Probable Reserves

When investing in gold mining stocks, some jargon that is extremely useful is “proven” and “probable” reserves. Proven means the gold in the ground is proven for sure. Probable means they think the gold is in the ground but it has not been proven. Gold mining companies traditionally trade based on their proven reserves with probable reserves factoring in at a discount. The 40 percent number above is most likely based on proven reserves. What does this mean? If you find gold mining companies that have a high amount of probable reserves that actually materialize into real proven reserves, you could have a huge winner on your hands. Put another way, the more risk you take on the more reward if things go in your favor. This is a high stakes game, but one that may be worth playing with a certain portion of your portfolio.
Smart investors have already jumped on the bandwagon when it comes to investing in gold. However, it is not too late for the rest of us because there are many avenues for investment available, such as gold coins and gold jewelry. Those who are much more brave and ready to take their gold investing to the next level should consider investing in gold mines.
Investing in gold mining companies involves purchasing gold stocks. The investor will be buying ownership in the gold mining company as well as the gold itself. As is quite apparent to most Americans, the stock market can be quite volatile. Therefore, there is a bit more risk involved in this type of investment than is present when investing in gold via other methods.
Gold mining stocks are performing very well due to the popularity of gold as an investment. The price of gold has increased drastically over the past decade and this trend is expected to continue.  Hundreds of gold mining companies offer their stocks to the public and their level of market capital ranges. The largest represent over ten billion dollars of market cap and the smallest are under 50 million dollars. There is a gold mining stock well-suited to the volume and risk tolerance of any investor.
Investing in gold mines is a great alternative for individuals who are no longer dazzled by the option to buy gold coins or jewelry.  Gold mining stock does carry some inherent risk, but in the current market, it is a pretty safe bet that the price of gold will continue to increase. Take a chance and purchase some gold mining stocks today because the decision is bound to pay off in the end.

Reasons to Invest through USA Mining Companies
  1. USA provides stability of investment climate, which protects you from many forms of fraud and other forms of risks, especially those you might experience in the countries with political and economical instability. Business law exists in USA for hundreds of years, and it’s a common sense law. Experienced lawyers will be able to protect your interests starting from the preparing of necessary JV, loan or other documents. Title agencies in USA perform a title search, if real estate is involved, and insure the title. Public companies in USA report to SEC, and this protects you as a potential investor.
  2. If you invest in mining, you do not have to worry about visas to visit your business; it’s much easier than investing in real estate.
  3. American mining companies operate in an exploration sphere and precious and non-ferrous metals mining all around the world, so you will be able to choose a project you like and located in the geographical area of your preference.
  4. USA has a lot of natural resources, and especially minerals. Mining has been practically stopped during the Second World War. People switched to other areas of activity. Mines remained closed. (Over 90% of mining even now is being done outside of USA.) Later low prices of gold prevented extensive mining of precious metals. This industry started to rebound only in the end of the last century, and now it’s quickly growing. Despite the quick growth, we are pretty sure that the precious metals and non-ferrous metals mining industry is substantially under-valued in USA.
  5. Prices of gold, silver, platinum and many non-ferrous metals are skyrocketing, and it looks like a great upward movement is developing.
  6. Many placer gold mines which earlier could not be developed with economically viable results due to relatively low grade of gold or due to the fact that fine gold (micron particles), constituting the major fraction of gold had to be extracted with chemical methods. Nowadays, micron particles of gold may be extracted effectively (over 95%) by modern gravitation separation technologies and machines using water and power only, and prices of precious metals stimulate developing of mines with relatively low grade of precious metals. Sometimes, the ore from hard rock mines demands chemical processing. Newly developed closed-circuit chemical methods of ore treatment consume less water, making it easier to get necessary permits and keep mining environmentally friendly.
  7. Mineral mining law in USA makes it easy to claim and hold land for mining purposes. Some mining land can be sold and inherited as a real estate. There are three types of land which could be used for mining in USA.
  8. Some small gold mining companies in USA currently do not have sufficient funding sources to finance development of many very well explored precious metals mining projects, based on small and medium size mines.
  9. Amounts of funding required for every particular gold mining project could be relatively low because many mines are turnkey ones and ready to go, often even with equipment installed. There are some mining claims available where geological reports are impressive, reserves are well proven and permitting is done already.
  10. Gold bullion or nuggets as well as the ore or concentrate could be kept after produced by the mining company without paying taxes until it is sold in the open market. This fact allows gold mining companies to sell precious metals on the peak of their prices or just borrow against the bullion.
  11. Climate in the USA (except Alaska) and Central America mostly calls for 12 month operations, making it easier to achieve high return on the investment than if you mine precious metals in Canada, Siberia or Alaska having a operational season of 5-7 months in the best case scenario.
  12. Reserves of precious metals may be placed on the balance of your enterprise according to certain rules, so the book value of the company may grow even before you start gold mining.
  13. Taxes and accounting are very easy tasks in USA when you use professional companies for this purpose.
  14. It’s a myth that only in Africa or Russia you may do as good as 50%-100% return per year. Stocks of some small USA mining companies made much over that this year already.
We are running out of gold

According to Galmarley, all gold ever mined is worth $1.8 trillion dollars. All gold that has not been mined is worth about 40 percent of the mined gold or $0.7 trillion dollars. Adding these two numbers together we get $2.5 trillion dollars worth of gold bullion, both mined and underground. This number may sound high but it is actually really low compared to the current US national debt of $9 trillion dollars. Now, let’s factor in the national debt of all other countries and the supply of gold looks even lower. Put simply, the supply of gold is extremely low. Since we are running out of gold very quickly, all gold left in the ground is extremely valuable. Who owns the gold that is left in the ground? Gold mining companies. The very fact that there is not much gold left is a very strong reason in favor of investing in gold mining companies.

Smart investors have already jumped on the bandwagon when it comes to investing in gold. However, it is not too late for the rest of us because there are many avenues for investment available, such as gold coins and gold jewelry. Those who are much more brave and ready to take their gold investing to the next level should consider investing in gold mines.

Investing in gold mining companies involves purchasing gold stocks. The investor will be buying ownership in the gold mining company as well as the gold itself. As is quite apparent to most Americans, the stock market can be quite volatile. Therefore, there is a bit more risk involved in this type of investment than is present when investing in gold via other methods.

Gold mining stocks are performing very well due to the popularity of gold as an investment. The price of gold has increased drastically over the past decade, and this trend is expected to continue.  Gold mining stocks can be found online or by consulting a stockbroker.

Investing in gold mines is a great alternative for individuals who are no longer dazzled by the option to buy gold coins or jewelry.  Gold mining stock does carry some inherent risk, but in the current market, it is a good bet that the price of gold will continue to increase. Take a chance and purchase some gold mining stocks today because the decision is bound to pay off in the end.

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