What Buyers Need To Know Before Making Their First Gold Bar Purchase

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Adding a precious metals IRA is a wise investment move as it diversifies a traditional asset portfolio. Having precious metals like gold means having an asset that would remain valuable even after an economic crisis unlike stocks, bonds, and cash. Some things must be taken into account before an investor makes his or her first gold bar purchase.

 

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Once the investor acquires these assets, they have to be stored at an IRS-certified depository. Buying gold and other precious metals is a wise choice especially during an unstable economic climate as precious metals qualify as diversified investments. Having diverse assets is a practical move to protect the whole portfolio against investment risks. 

Birch Gold Group is a precious metal IRA specialist headquartered in Burbank, California, that aids clients in protecting their portfolios in the face of current and coming economic instabilities. Precious metals like gold, silver, and platinum have consistently been seen as resistant to economic cycles, and over time have been bedrocks of truly balanced and diversified portfolios. Visit the company’s official website for more information on purchasing precious metals.

The Recycling Project That Lead to a Gold Mine

Apple's recycling program has resulted in an astounding collection of gold from their product. How much did they collect? Read about it here.

Aside from helping the environment, Apple's recycling projects are also making good money for the company: Digital Trends' Lulu Chang reports that Apple recovered a total of 2,204 pounds of gold through its recycling efforts in 2015, amounting to over a ton of the precious metal.

Based on current market prices, the recycled gold is worth around $40 million which is a major yearly profit even for a tech giant like Apple.

While many are familiar with numerous gold-plated Apple products, the bulk of the recovered gold comes from electronic components found in regular products: gold's properties often make it a better choice for consumer electronics than silver (conductive, but corrosive) and copper (inexpensive, but offering poor conductivity). Therefore, bits of gold can be found in most higher-end electronic devices such as iPhones, iPads and Macs.

Over the course of 2015, Apple managed to recover around 90 millions of pounds of e-waste, with two-thirds of it being reusable. Besides gold, Apple also collected 6,600 pounds of silver and millions of pounds of other useful materials.

Apple mentioned the financial and environmental benefits of recycling in a recent official statement: "We work hard to keep electronic devices out of landfills so that the precious resources they contain can be reused. And we want to ensure that these devices are recycled properly so they don’t pose a threat to human health or the environment," said the company.

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Why You Shouldn't Doubt the Shiny Yellow Metal

Gold has been experiencing its best quarter in over 30 years. Should you be doubting the metal and is it wise to keep buying? See what this leading investor is saying here.

With the recent price fluctuations that gold has seen, many have been wondering what's next in store for the wise investor: can gold sustain its rally, or is its current strength a come-and-go hot money affair?

Speaking to CNBC in a recent interview, known gold guru George Milling-Stanley said he's leaning heavily towards the former. Milling-Stanley is a true gold buff, having stuck to the metal for 40 years in spite of naysayers – his faith paid off, as he now manages the $33 billion S&P depository receipts (SPDR) Gold Trust fund that's up 15% year-to-date.

His experience with the yellow metal also lets him refute these naysayers easily, especially since they tend to focus on gold's perceived lack of return. "For 40-something years, since I first got into gold investing in the 1970s, people have been saying it doesn't pay a return. Well, guess what? Not much else does these days, either. People are charging you to store money. [gold] GLD costs less at 40 basis points annually than holding Swiss francs," Milling-Stanley explains.

While recognizing the risks that hot money poses, he doesn't see it as responsible for gold's early-year success: "We think most people were dangerously underweight gold or out of the market altogether," he said. Instead of huge gains ahead, Milling-Stanley would prefer to see a moderate steady increase, predicting such thanks to demand "across the board" – including that from emerging markets – and stagnant mine production. "I would like to see gold go up steadily by about $100 in 2016, so to the $1,350 to $1,375 level by Christmas. That would be sustainable."

Milling-Stanley also mentions his four talked-about factors that have been keeping gold down in recent years. Each of them is now swinging towards the metal's favor: the dollar trade won't be as monolithic as before, the Fed is struggling to reach inflationary goals, equities are no longer posing a significant threat and investor sentiment is shifting. Milling-Stanley explains why the last point is particularly important: "A big factor is the change in the perception of risk, which has done a 180, even if the risks haven't changed. People are looking for risk-off assets. Risk-off trading was enough to give us a $200 rise. The perception of a riskier environment is liable to be what's governing here."

As for investing, the gold expert doesn't think anyone missed the boat: those who wanted to sell gold already did so at its $1,800 level, so there shouldn't be a surge in selling back or recycling until the metal goes a lot higher. And Milling-Stanley believes it can: "This thing could run. I won't say it's going to, but it could. It showed us in 2011 it could go up dramatically," he added.

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Silver is Shining Bright, Sales are Through the Roof

People see the perfect buying opportunities for silver and have been stockpiling the metal. Demand is currently through the roof, so, what will this mean for the future of the metal? Find out here.

Reuters reports that the global silver-coin market found itself under an unprecedented supply squeeze. Both the U.S. and Canadian Mints had to set weekly sales quotas in July because demand was too high. Australia's Perth Mint responded to a record of 2.5 million ounces sold in September by rationing supply of a new line of coins.

When North American and Australian coin producers could no longer keep up, demand spilled over to Asia and Europe, creating a worldwide “domino effect”. Roy Friedman, vice president of sales and trading at a large U.S. coin dealer, says he never witnessed demand spilling over to other markets in his 35 years as a precious metals dealer.

“Silver [coin] demand is absolutely through the roof,” said Perth Mint wholesale manager Neil Vance. “There seems to be a bit of frenzy as people think there is a shortage of silver. But in fact it is a (crunch in) manufacturing capacity.”

While the U.S. Mint in West Point is operating three shifts and paying overtime, the Austrian Mint had to increase production of silver blanks and has begun allocating sales of its Philharmonic coins. But what is really driving the frenzy?

As the article notes, some investors like using these precious metals to protect themselves from volatility, especially in currencies and stocks. Since the Chicago Board Options Exchange (CBOE) Volatility Index briefly jumped to its highest since January 2009 earlier this year, it's easy to see why one would want to seek shelter for their assets.

Regardless of investors' reasoning, the industry will continue feeling the effects of increased demand for the time being. “We can only get a fraction of what we could sell,” said Terry Hanlon, president of Dillon Gage, with dealers adding that this buying binge has lasted longer and been more pronounced than previous ones.

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China Begins to Report Their Gold Reserves Monthly, But Are They Massively Understated?

Beginning in the last month, China has begun to report their gold reserves monthly. But with many questioning the accuracy of the numbers, what could be China’s ultimate goal? Find out here.

Most countries report their gold holdings to the International Monetary Fund (IMF) on a monthly basis. Until recently, China was among the few who elected not to do so, having created no such reports in six years.

But within the past month, that has changed. Now, they seem to have adopted the monthly report system in an effort to get in the IMF's favor and thus increase the chances of the yuan being included in the Special Drawing Rights (SDR) basket.

China hasn't just been criticized about the lack of reserves reports. Their first report after six years was met with widespread disbelief, as most analysts estimated that their holdings were high above the 'official' figure of 1,658 tons. It would be strange for China to have such small reserves considering how they view the metal. While the West recognizes the value of gold, many Asian countries – with China perhaps at the forefront – go a step further and see it as the ultimate money.

At any rate, Lawrence Williams finds the way China reports their gold reserves to be in stark contrast with how the West does it. Whereas Western countries will inflate their reserves by including leased and swapped gold in the figures, China seems to be hugely understating their holdings by using “non-reportable” government-controlled accounts.

Williams writes, “It also seems to be the situation that in China, a very substantial gold holding – far above the currently stated ‘official’ figure – is considered to be a prerequisite for attaining a stronger position for the yuan in global trade.” Despite this, it seems as though China prefers to avoid “rocking the U.S. economic boat” with a report of massive reserves – at least for the time being. But what happens once the yuan finds its way into the SDR basket is anyone's guess. After all, Williams does point out that Chinese gold holdings “magically” increased by 600 tons from 2009 to 2015.

Aside from frequent holdings reports, China is also devaluing the yuan in response to the IMF's recent criticism. Yet should the IMF delay the yuan's inclusion for too long in spite of China's efforts, Williams notes that the Chinese could see this as an unfriendly act and respond accordingly by trying to destabilize the U.S.' global position using their forex holdings.

While the time might not yet be right, Williams warns that “the game could change” should China's plans of joining the SDR be thwarted. “China thinks long term in a way the West mostly does not. It may lose the odd battle but ultimately aims to win the economic war,” he says.

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India’s Hunger for Gold Continues, Shows No Signs of Slowing Down

In India, gold consumption continues to rise. With a holy day further driving demand, their thirst for the yellow metal does not appear to be slowing down any time soon.

The Chinese stock market situation might have caused gold to lose some steam recently, but not all parts of the world are following suit. China and India have long competed for the spot of the world's top consumer, with China usually coming out ahead.

But now, with many Chinese investors being locked in the stock market, Business-Standard.com reports that India finally edged out China for the top spot after 6 months of relative equality.

Retail investment in India remained steady year-on-year at 50 tons. However, the biggest drive for gold demand proved to be the Akshaya Tritiya, a holy day in the country – gold purchases notably surge ahead of most Indian holidays. Overall, gold demand in India rose 2.5 percent year-on-year, bringing India's share in the global gold demand to 24.21 percent.

Indians are also stockpiling gold for this very important reason. Find out here.

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Why Gold Prices Took a Hit Last Week

Gold prices hit their lowest levels in five years last week, trading below $1,100. What was the real driving factor behind the price's decrease?

Without a doubt, many will use recent developments in the global economy as an excuse. The Grexit no longer looks like a certainty thanks to a bailout of questionable sustainability. China's gold cravings seem to be lesser-than-usual. There's also the looming threat of an interest rate hike and a subsequent strengthening of the dollar.

Yet, upon further examination, none of these seem to be the guilty party that sent gold plummeting. China's gold demand is strong despite day-to-day deviations, and the U.S. rate hike isn't nearly as 'around the corner' as many believe. Most importantly, perhaps, gold is fundamentally different from other commodities, having different demand drivers.

Instead, Mining.com's Frik Els points out two recent events that he refers to as a 'one-two punch that floored gold price'; one from the U.S. and one from China.

Els argues that the U.S.'s part in gold's fall came via speculators in the Commodity Futures Trading Commission slashing their net-long positions, with managed-money accounts significantly reducing their exposure to gold futures. Many of these sales came as a result of uncertainty regarding the direction that the gold market is heading in.

Similarly, Els notes that China played its part by performing a massive gold sale worth $2 billion in just a matter of minutes. Due to its size, the Monday Shanghai Gold Exchange sale of 4.7 tons immediately caused gold to drop by 4.3 percent – gold sales usually average no more than 96 kilograms a minute on the SGE.

Els adds that these seemed an "almost concerted cross-continental effort to push price through support levels that the metal has bounced off numerous times before." Yet despite these drawbacks, gold still managed to bounce back to $1,100 almost immediately.

While such falls in the price of gold are universally viewed as negative, many buyers still see them as little more than a buying opportunity. As gold fell by over 3 percent in both India and Turkey, consumer interest in these markets grew – the metal's low correlation with other assets makes it ideal as a safety-net investment to diversify one's portfolio.

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