Gold has always held a very important position in matters of finance and a nation’s economic well-being. Gold has always been considered an asset. Women from centuries have held on to their jewelry and passed on their asset and the related wisdom to generations. Gold has been used as currency, remains a financial asset for banks and nations and a personal asset for individuals.

Picture this. You have gold bullions worth millions. Wouldn’t you be worried about the safety of your hard-earned fortune? You may spend sleepless nights over the security of your gold. In case you need money, selling them will not be very easy given that you will need to transact in bullions and not in a smaller unit. Wouldn’t it be easier dealing with some papers than enormous bars of the precious metal?

More and more people are being inclined towards investing in gold mining stocks than gold bullions. This article will discuss why you should buy gold mining stocks than gold bullions.

It is important that you consider certain factors before investing. You need thorough knowledge and understanding of mining to invest in gold mining stocks. Mining risks account for more volatility in the prices of stocks as compared to that of its physical counterpart, the gold bullion.

Easy trading: Wise investors usually hold a balanced portfolio of gold mining stocks and gold bullions, thus taking a calculated approach to gold investment. However, when it comes to the ease of gold trading, the stocks hold a much stronger place as against gold bullions. Gold mining stocks enable easy buying and selling in the market.

Reduced costs: Holding gold bullions will require you to spend a considerable sum in insuring the precious metal. Having gold stocks, on the other hand, does away with this high cost factor.

Fewer complications: Investing in gold mining stocks makes life simpler for you in the sense that you do not need to worry about the quality of gold involved. You will no longer have to test the purity of gold you own because your gold will now be in stocks not in bullions.

No storage issues: With gold bullions, you always have to worry about safe and secure storage for your gold. You also need to spend a large amount of money for the safety and storage of your gold. Investing in gold mining stocks does away with your storage concerns.

Easier transactions: While holding gold bullions makes it difficult to transact in any denomination, you can transact in the smallest unit of gold with gold mining stocks.

Easier resale: The resale price of gold bullions is usually less. Gold mining stocks do not suffer from this limitation.

Experts believe that an investment in gold mining stocks will reap higher returns than an equivalent investment in tangible gold. Though risky, gold mining stocks are considered to be worth investing in. It has been observed that the profits of mining companies are increasing at a more rapid pace than the prices of the products they are mining.

Gold mines are present in six continents except Antarctica. This article will familiarize you with the prominent gold-producing nations of the world.

South Africa, the United States, and Australia are the three largest gold-producers countries. For decades,
South Africa has been the largest producer of gold. In 1970, the world owed two-thirds of its gold production to South Africa. In 2006, the gold production of the world was estimated to be 2469 metric tons, with South Africa, the United States, and Australia contributing 11.0%, 10.5%, and 10.2% gold respectively.

South Africa has been the largest producer of gold for more than a century. However, the gold production records last year brought China up to the first place. China has produced 276 metric tons of gold in 2007, thus contributing a significant 11.3% gold to the world’s production. South Africa produced 272 metric tons, followed by the United States with an estimated production of 255 metric tons and Australia with 251 metric tons.

The other gold producing nations apart from these countries are Canada, Peru, Russia, Indonesia, Tanzania, India, and Japan.

South Africa has been considered the country with the largest gold reserves in the world. It is said to have fifty percent of the world’s gold reserves. The gold mines at Boksburg and Carletonville are the biggest mines in the country and the deepest in the world. AngloGold Ashanti Limited and Gold Fields Limited are two of the big mining companies in the country.

Thanks to extensive foreign aid, China has been able to become the largest gold producer even with only seven percent of the world’s gold reserves. China’s CNGGC (China National Gold Group Corporation) is the biggest mining company in the country. The nation’s other mining companies include Zhongji Gold, Fujian Zijin Mining Industry Company, Lingbao Gold Company, and Zhaojin Mining Industry Company.

Most of the United States gold comes from Nevada, a state in the west of the country. The state is known for its open pit mines. The other gold producing states are Colorado, Alaska, Arizona, Michigan, Idaho, Georgia, California, Montana, Virginia, North Carolina, South Carolina, Tennessee, Pennsylvania, and New Mexico. The big mining companies in the country include Newmont Mining Corporation, AngloGold Ashanti, Barrick Goldstrike Mines Inc. Minera, Coeur d’Alene Mines Corporation, Kinross Gold Corporation, and Royal Gold, Inc.

Australia’s share in the world’s gold production started peaking up after the 1980s. The major gold mines in Australia are Super Pit and Sons of Gwalia mines in Western Australia, Cadia and Timbarra mines in New South Wales, Olympic Dam and Challenger mines in South Australia, Lasseter’s mine in central Australia, and Henty Gold Mine in Tasmania. The major gold mining companies in the country are Barrick Gold of Australia Limited and Monarch Gold Mining.

The 2007 gold production statistics estimate that Indonesia contributed 7.0% to the world’s total production of gold, closely followed by Peru with 6.9% and Russia with 6.2%. Canada produced 93 metric tons of gold, contributing 3.8% to the world’s gold. Other countries are estimated to have contributed 32.9% of the world’s gold.

Gold, the most sought after metal in the world is sought not only because of its luster but also for the various other properties it holds.

Properties of Gold

Gold is a good conductor of electricity and heat. An important property of gold is that it is resistant to corrosion: it does not react with air or any reagents.

Gold has the metallic properties of being malleable and ductile. The property of malleability lets gold get hammered into thin sheets without breaking. Its ductility allows gold to be drawn into thin fires. Gold can be melted and stored in different shapes. It also has the ability to mix with different metals and become alloys.

Applications of Gold

Jewelry: Gold has always been thought of as the pure metal. The brilliant yellow and the excellent luster have drawn people towards it for centuries. More than three-quarters of the world’s gold is consumed as jewelry. Gold’s ductile property makes it an excellent choice for casting jewelry. Gold combines excellently with silver, copper, platinum, aluminum, nickel, zinc, palladium, and cadmium to deliver a variety of differently-colored alloys.

Electronics: It may come as a surprise to know that the most precious ornamental metal also finds its use in electronic equipments, thanks to its electrical conductivity and resistance to corrosion. A certain amount of gold has invaded the information technology and electronics industry, and rightly so. Gold can be traced in your daily electronic and digital equipment like cell phones, computers, calculators, televisions, credit cards, and digital equipments. Gold comes to the rescue when handling very small voltages. You would argue why silver and copper cannot be used in such devices. Here, gold scores a brownie point because of its resistance to corrosion.

Engineering: Gold is used in numerous engineering applications as a lubricant. Gold is used in thermocouples and potentiometers. Gold is also used in architecture as glazing material for buildings; it helps in keeping the buildings well heated and ventilated. Gold has also found limited use in industrial brazing.

Medicine: From being present in surgical instruments to providing diagnostic support and cure in certain diseases, gold has gold has found some place in medicine. Certain compounds and isotopes of gold are used in the treatment of rheumatoid arthritis, Lagophthalmos, and some cancers.

Dentistry: Being biocompatible and chemically inert, gold serves as a great solution when the human body’s need for a metal in the mouth! Gold and its aloys are safe for the human body, making them the preferred choice for filling in cavities, inlays, crowns, and bridges.

Miscellaneous: Gold also finds its use in photography as a printing medium. Though tasteless, Gold has now entered the gastronomical zone, being served in food. In countries like Japan, tea, deserts and cocktails are now being served with gold dust and flakes! Apart from being ornamental, gold is being used in the beauty industry to aid beauty. Gold facials have gained popularity across nations. Some cosmetic companies are adding gold in their products. The ductility of gold has founds its use in embroidery as well.

A great way to get into the precious metals craze going on right now is to look towards mining and producing companies dealing with precious metals such as gold. One of those gold mining stocks is Agnico-Eagle Mines Limited (NYSE:AEM) located out of Toronto, ON. At the time of this writing AEM was trading at just over $70 per share with a market capitalization of $10 billion.

AEM produces gold through it’s gold mining operations located in northwestern Quebec as well as mine construction projects in that same location. Agnico-Eagle is also mine construction projects located in Finland and Mexico with exploration operations in all of those countries as well as the United States.

Over the past year the companies stock as increased 86% fueled no doubt by the huge climb in gold prices. The company claims large potential for growth through press releases found on it’s website where Agnico-Eagle boasts that its largest mine is the 100% owned LaRonde mine. LaRonde is Canada’s largest gold deposit in terms of reserves. This has allowed AEM to have low operating costs and provide the company with other previous metals such as silver, zinc, and copper which are byproducts of the mine. Development at LaRonde is expected to keep the mine going through 2020.

Other gold mines the company is constructing hope to add to this growth and include Kittila in Finland and Meadowbank, Lapa, and Goldex in Canada. From 2006 to 2007 Agnico increased it’s gold reserves by 33% and looks to increase those reserves by 5 five over the next 2 years. They also are looking to produce over 350,000 more ounces of gold this year than they did in the previous year.

Their stock, however, appears to show this growth already factored into the price as it trades at a P/E ratio of 69. Is this a case of investors loving the stock because of it’s potential growth, or investors joining the bandwagon of buying gold in a bull precious metals market.

Recently we discussed the iShares ETF IAU which is a gold trust ETF like the silver trust ETF SLV. Now here’s another one that, if you’re into ETFs, you may be interested in. It’s called streetTRACKS Gold Trust (GLD).

Like IAU and SLV, GLD buys and stores gold and allows investors to buy a share of the gold it owns. The price basically tracks the price of gold per ounce at about 1/10th the value of an ounce of gold. Fees are taken off for running the fund, which is the reason for not tracking the price exactly.

Currently, the precious metals market has been taking off as investors try and find a safer place to put their money than the stock market. If you want to buy gold, rather than buy gold bullion, you can purchase gold through the ETF and take advantage of long term capital gains tax benefits. If you buy gold bars or coins you’ll need to pay full capital gains taxes.

These are just some of the advantages that buying gold through ETFs such as IAU and GLD can offer.

If you want to get into gold and you don’t want have gold bullion collecting dust in the corner of your safe deposit box, then an iShares electronically traded fund might be the way to go for you. With iShares IAU ETF you can own a fractional ownership of gold held by the iShares Gold Trust.

Rather than own large sums of gold you own roughly 1/10th an ounce of gold per share you own in the iShares trust. And the best part is, you can trade these easily from your regular stock trading account. This means if you buy and hold you can take advantage of long term capital gains rules rather than taking the sale of a gold bar as a fully taxed gain, as you would do if you owned gold bars.

Some people say they want to be able to hold the gold, but those same people don’t realize that when they buy stock in a company they have nothing to hold, so why not do the same with buying gold. The ETF IAU will allow you to own a piece of a precious metal that has historically held it’s value. And with the spread of wealth around the world increasing, demand for gold can only go up (or so we think).

Buying gold now during this volatile time period may be risky, but if you hold long enough, we imagine that owning an ETF like IAU will prove to be very valuable, and easy to trade.

Gold recently surpassed the $1000 mark but since has had a remarkable fall back from that high. With the markets in America still in turmoil and no one really knowing if the dollar is going to recover, do you think gold is still a buy at it’s current price of just over $910 an ounce?

I guess the better question is, will the worldwide demand for gold continue in growing nations while the dollar and American markets continue to weaken? For the most part, that’s a guessing game and the precious metals market, which was once a safe haven for your money in a weakening economy with a weakening dollar, is now just as volatile as every other market out there. So whether or not it’s a good buy is up to you.

Will it go back above $1000, most likely. But don’t take our word for it, do some research and find out for yourself.

The price of gold per ounce headed higher today after a week long drop in price from it’s high of just over $1000. Gold came out of the weekend under $900 but has since climbed back over the mark and is inching ever so slightly back towards that high.

While the stock market continues to show high volatility and interest rates continue downward, the price of gold hasn’t seen a drastic sell-off as some analysts are saying. We’ve heard the price is too high, there isn’t enough demand and gold isn’t a safe haven for a weak currency or market anymore.

Well, we’re not sure if those words of wisdom are true but we do know that the price of gold continues to increase and the next time it’s down below $900 might be a good time to buy, even if the market does rebound. But we’ll wait to see if it ever gets a chance to get back below that price point?

The markets, US and around the world have been in a very volatile state, no doubt in response to the mortgage fiasco going on in America. Gold and other precious metals have mostly followed this turmoil and seen a large increase in price since these types of investments are considered safer.

But is gold really a safe buy when the price has fluctuated from $1000 down to it’s current day price of $885 per troy ounce? Seems pretty volatile just the same as the rest of the markets. However, you do get to own a piece of tangible goods as an investment when you buy gold directly. So that, I imagine, makes some people happy. Unlike owning a company stock that you don’t know too much about.

Well, with the markets down, and gold well below it’s high of a few weeks ago, this may be a great time to buy. But precious metals are not for the faint of heart right now. Buy gold with caution if you are thinking about it at all.