Gold Bullion Bars

Gold in its mined state is often rough, but it still offers that golden glimmer that no other metal can match.  Refined gold looks and becomes luxurious, shiny, sparkly, glossy, gleaming, glistening, and polished – pure 24 karat luxury.  Those words just make you want to hold, wear and own this precious metal, just to feel good.  However, gold can be so much more than just a feel good commodity.  Valued for its rarity, this precious metal has been mined, panned, refined and traded since the beginning of recorded history.  It is a valuable asset for diversification in any person’s investment portfolio.

In modern times, gold is traded as a commodity on the futures market and that is how the cost of gold is determined.  The demand for gold has a propensity to increase its trading value.  The higher the demand for gold, translates into a higher the value of gold.  This determines the 24 karat gold price.

Gold is a commodity that is not expended; meaning whatever gold is mined and refined will not go away.  It is always there – somewhere.  It is often stored for investment purposes in a variety of safekeeping environments.  However, it could be hiding in a person’s jewelry box, lost and forgotten, but once brought to light it can be melted and refined back into the common gold market. A steady increase in the 24 carat gold price on the trading market, coupled with modern economic slowdown and personal financial hardships caused many people to look in their jewelry boxes for gold to be and brought back into the marketplace.

Determining 24 Karat Gold

What makes gold precious and how does a person know that it is pure?  The gold standard is 24 Karat (sometimes ‘carat’).  Gold is never one hundred percent pure.  A trace of an alloy will always show up somewhere in its composition when examined, but the purity of 24 carat gold is shown as ninety-nine percent pure.  The highest purity gold on the market was minted into a special edition Canadian Gold Maple Leaf coin with a purity rating of .99999 (99.999%).  The regular edition of that same coin has a purity rating of .9999 or one one-thousands of a percent less.  With those standards of pureness in mind, 99.9% pure may be labeled as fine, 24 karat gold.

Given the standard rating for purity is required to be 24 of 24 parts, you get 99.9% pure – pretty darn close to one hundred.  So, as a comparison, 18 Karat gold would contain 18/24ths, or 18 of 24 parts of gold (with 6 parts alloy metals), 12 Karat gold would contain 12/24ths or 12 parts gold (12 parts other alloys), and so on.  Pure gold is a soft metal, and alloys are added to increase the strength and durability of gold for purposes such as jewelry making.

Determining 24 Karat Gold Price

Gold is traded on the stock exchange market as a commodity. The rate of exchange on the commodities market is the factor determining the daily price of gold.  The daily, actually moment to moment, price of gold (referred to as the ‘spot’ price) is determined by a variety of factors relying on the exchange rate for something called gold ‘futures’ in the stock trade industry.  This post refers to the current spot trade price for the immediate delivery of gold.  In a thirty day span during May and June, 2012 the value of spot gold varied from a low of approximately $1550 Unites States Dollars (USD) to a high of $1630 USD.  Currently gold is at an all time record high price, a tremendous gain over the less than $100 USD amounts of the early 1970s.

24 Karats of Shimmer – Investing

In May of 1973, the gold price rose to $100 USD per ounce.  Later that year, US President Gerald Ford signed into law a provision to legalize gold ownership to American citizens. In the years following that new law, many other countries allowed their citizens to own and trade gold. In 1975 the trading on the New York Commodities Exchange began.  Prior to 1973 the only legal way for a person in America to own gold was by purchasing and holding minted gold coins which were legal for use and tender and carried a monetary value.  This 24k gold price was based on the coin itself, not on the content of gold.  If a person wanted to own gold, other than perhaps in jewelry, that person would contact a coin dealer or broker and purchase the item either at its value stated on the coin, or at a price determined by collectors for its value as a collectible item.

Rolled Coins vs. Minted Coins
Rolled Coins Coins which fall under the category as rolled are those that are prepared to resemble legal tender coins but are actually rolled and stamped with images that would enhance the collectability of the piece.  As an example, a manufacturer or privately held gold “mint” or company would issue a fixed number of rolled coins featuring a famous person (say, John Wayne in a movie role) or event (say, the anniversary of the signing of the Declaration of Independence). Minted Coins Coins that are issued by a government mint and are sold with a stated value as legal tender. They have a fixed value stamped on the coin.  Their value increases depending on the amount of gold they contain and their availability on the secondary market.

Today, the 24k gold coins which are minted or cast are collected by investors for both their gold value and collectable value. The 24 karat gold price as currently determined by the markets does not necessarily determine the price of the coin.  The collectible value is always factored in, as well as the demand for that particular coin as well.