Gold Price

Will Gold Prices Rise in 2015?

Experts are predicting that gold prices will increase in 2015, with volatility in the global market prompting investors to turn to gold.

Gold prices haven’t really been doing very well in the past years. In 2011, they reached a record high of $1921.50 per once but have not risen since then. In fact, in 2014, gold was only traded for around 1,230 an ounce.

In an interview with British publication The Telegraph, fund manager Evy Hambro of Blackrock Gold and General, stated that, gold has “bottomed out” and is due for a price recovery.
Mr. Hambro argues that, with the European Central Bank expected to print billions of new euros to boost growth and stave of deflation, not only will European equity markets receive a boost but gold as well.

“In periods of uncertainty people reach out for gold as a safe asset. With this loose monetary policy around the world and fears around deflation, people will want to reach out for safe assets and gold is the natural place that people will move to as a store of wealth,” Mr Hambro said.

Mr. Hambro isn’t the only one optimistic for gold in 2015, HSBC has also raised its average gold price forecast for the year. The reason given was that, due to the growing strength of the dollar and global geopolitical fears, gold’s reputation as a “safe-haven” investment will make it even more attractive to investors.

An increase in gold prices has already been seen for this year, following the news on January 15 that the Swiss National Bank had abandoned their three-year-old cap against the euro.

Following the news, spot gold rose to $1,252.06 an ounce by end of the day (1226 GMT).
“Gold is gaining from a risk-off situation because nobody expected the Swiss central bank not to keep that cap, and this has created potential big losses in many places and is obviously triggering some flight to safety,” Saxo Bank senior manager Ole Hansen said in Reuters.

Commerzbank is also predicting a rise in gold prices for the second half of this year, spurred by plans from the U.S. Federal Reserve to raise interest rates in 2015.

According to Commerzbank, there will be two distinct phases for the gold price in 2015. The first phase would be a decrease in price for the first six months of 2015, due to increased speculations about interest hikes. However, once interest rate hikes are in place, the pressure on gold is likely to abate and a rise in price will be seen in the second half of the year.

The Commerzbank forecast sets the gold price at $1,125 for the first half of 2015 and $1,250 for the second half of 2015.

Volatility in global markets has often prompted investors to channel their investments in gold which is considered a “safe haven” investment.

Gold Spot Price

The gold spot price is the set price of gold for a particular time and date and is used for the trading of gold. The price is referred to when buying or selling gold or any gold related items such as ETFs in order to get a standard rate with which the metal can be traded. The process is usually done with different banks and other corporations involved in the trading of gold participating in the setting and setting a price at two specific periods of the day – one in the morning and one in the afternoon. The set price is used for the trading of gold at least about two days before the actual buying or selling of the gold commodity. The gold spot price helps traders around the world agree on what should be the trading price of gold for a particular period. It helps provide a veritable standard on how the commodity should be valued for a given period which anyone, anywhere in the world can use for their trading purposes.

There are a variety of factors which affect the price of gold for the day. Of course there is the supply and demand factor but there are also other factors. The spot price is usually used for transactions that call for immediate physical delivery of gold and not for other types of contracts such as those that are involved in gold futures contracts. They use a different method of coming into the actual value of gold for a specific future date and which adds more factors into play such as gains and other interests that may affect the future interests of the buyer or seller. There is also the expectations of the future performance of gold in the future which will determine the value for gold at that particular date.

The spot price is affected by the supply and demand for the metal such as the worldwide hoarding of the gold due to their ever-increasing value and also as a security for any future economic condition which may diminish the value of their currency. Gold has always had a value with which it can purchase large commodities unlike the paper currencies which suffer whenever there are changes in economic conditions or wars and other factors.

The spot price of gold is expressed in either the United States dollar, the Euro or the British pound, in which it is usually settled. The fixing of the spot price for gold is usually done in London with various entities participating. They meet for an agreement on what the price of gold should be for that particular day and time depending on the performance of gold in the market at that time. Today, however, the process is usually done through the phone and does not need the physical meetings by these entities.

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The spot price of gold has risen greatly for the past few months only which can be a good signal for buyers or sellers to do their trade. Gold has not had this particular performance since the 90’s and will definitely be a good indicator for people to start trading this metal. You can view the historical statistics for gold and other precious metal commodities in the United States at this interesting precious metal commodity spreadsheet.

You can watch a video that explains what the spot price of gold means below:

How to Test Gold

Do you want to find out how to test your gold to ensure you know its quality? Gold buying can be a very risky business as you may be fooled into buying lower karats of gold at a price for a higher karat, or into buying plated or fake pieces of jewelry so you need to know how to test items for their karat or purity. Although this happens to some people who are not that informed or well-versed about the prices of gold or the karat of gold, this should not be a common event to those who are into gold buying. There are ways in which you could know if a piece is real gold or not or is a fake or a lower karat of gold.

Oftentimes, gold jewelries or gold bars contain an imprint or engraving of what the gold purity is such as 12k, 14k, 18k, 22k, and 24k or simply “pg.” This method however, can be easily copied by forgers as the engravings are very simple and do not contain much detail or any other symbol. Hence, a gold ring can be marked to be 24k when it is actually only 14 or 18k and be priced for the higher karat. This is one way in which you can be scammed when you buy gold items. Another, is when they place an engraving on a fake or gold plated metal in order to make it look like pure gold.

So how do you avoid being scammed when buying gold? There are some simple steps which you can do which can really show if what you are about to buy is what it presents itself to be. The most simple would be scratching the item on a piece of glass. Gold is much less harder than glass so it should not be making any scratch or marking on the glass. If it does, then it is a fake. Another is to try to get a magnet to stick to it or for it to stick to a magnet. Gold is never attracted by magnets so if it is attracted to it, then it might only be gold plated. Another way to see if an item is pure gold is by pouring some hydrochloric acid on it. As you know, it is a very strong acid and will usually dissolve weaker types of metals but not gold. So if you see any foam forming or any change in the color of the item, then it is a fake. One more common method to test the purity of your valuables is to purchase a gold testing kit.

For the more serious examiners of the precious metal, you may need to buy some specialized equipments such as a gold testing stone, some acids for the different karats or gold, testing needles and also some electronic devices for testing. The testing stone is black stone in which the item is scratched against. After that, an acid for a particular karat or purity of gold is poured into the scratch and is observed for any change in color or if it fades after the acid is poured. Weaker karats do not stand acids for higher karats and so you would know if the item is really what the sellers tells it to be.

Videos about how to testing precious metals:

How to test gold, silver, & platinum using a kit

How to test gold using an acid kit

How to test for real silver

Using the RS Mizar Electronic Gold Tester

Gold Price Index

If you want to have a better perspective about investing in gold, it would be good if you can get a gold price index in your particular area and the specific type of investment that you would like to make. A gold price index will give you the average price for gold for a particular span of time and also at a particular location. This will give you a much better view of how gold is being sold in your area and also how various companies are performing in the gold business. A gold price index will allow you to compare the different companies which are involved in the buying and selling of gold.

Gold price indices are used by financial planners and also analysts when trying to figure out how the different companies would do in the future and also to provide a preview on which companies it would be best to put one’s investment on. It would be better of course if you know how these indices are created and how reliable are those who create them. You should know the types of corporations that are included in the index and also the amount of capital that is involved for each of these companies. Knowing every single bit of information that would be crucial to your decisions will be a must as one cannot really tell by just a simple browsing through them. There are different things that needs to be considered such as the market capitalization of each company that is included in the index and also the components that are contained on each. Some have found the judging of things with such a shallow perspective to be a detrimental move on their part.

Investments should be done with a careful consideration of the particular market that you will be involved in and the different factors that come into play for the companies that are involved in it before you make a choice. Gold price indices should be carefully studied for their components, their reliability, and also the inclusion of the market capitalization in their data as a basis for any decision that you will make regarding the price of gold. These indices are usually used for the computation of gold price for a particular period of time. Now you cannot make them quite accurately if you base your choices on a different index than your particular market would need.

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There are various companies who have issued gold price indices such as the Philadelphia Gold and Silver Sector Index, the Amex Gold Index, the NYSE Arca Gold Index, and the Market Vectors Gold Miners ETF. They have different classifications and groups of corporations that they cater to so looking for the right group would be essential. Being well-informed about these price indices will provide you with a better edge in your decision-making and also for your future investments. Having a good idea about the gold price for a particular period will also help you with the pricing of your gold for future contracts that you may have for gold.

Gold Bar Price

The prices you will pay for gold bars vary depending on the current price of gold and can be one of the best investments you can make in your lifetime. The value of gold traditionally never fails to lessen with the passage of time and aside from that it has been used as a form of currency in order to buy products through the ages. These characteristics of this precious metal are one of the reasons why a lot of people and countries have turned their assets into gold and that is in gold bars. Gold bars also have a lower premium over their price which is why it is one of the best ways to buy gold in this form. The lack of additional expenditures for the design of gold bars makes it cheaper than buying them in forms of jewelries or coins. If storing wealth is what is in your mind, then a gold bar is the one that you should invest in.

Gold bars come in a variety of available weights systems depending on the country on which it is being used. Some are expressed in grams, for those countries which have adopted the metric system as their units; ounces, for countries using English units such as the British and the American; taels, for countries using Chinese units; the tola, for those in the Arab countries and the Baht, Chi, and Don for Southeast Asian countries.

The weight of these bars also comes in various forms. There is a one-kilogram bar, a one ounce bar, a ten-ounce bar, a quarter of an ounce, half an ounce, and also a tenth of an ounce bar which is considered to be the smallest gold bar of all. They are measured in troy ounces which has an equivalent weight of 31.1 grams in the metric system.

The price of a gold bar is determined by the spot price of gold for the day. This price, which is changing almost every hour, is affected by the performance of gold in the market. Up to the time of the writing of this article, the bar price has been $1, 741.38 for a one-ounce bar, $17, 496.36 for a 10-ounce bar, and $55, 454.8 for one kilogram of gold bar.

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Some of the factors which determines the price of a gold bar are government taxes, insurance, shipping, manufacturing costs, the premium cost of gold, and of course the profit margin for the seller. Some of the known manufacturers of these bars are the subsidiaries of the Union Bank of Switzerland and Credit Suisse and the PAMP SA. These have all been manufacturers of gold bars for years now.

If you are trying to make an investment in gold, it is better if you can buy the larger types of gold bars as you get to pay only smaller amounts of other expenses for them such as shipping and handling. The price of gold bars has seen some significant increase during the past few months which is a good indication that it is one of the better investments for those who would like to secure their hard-earned cash.