Investing in gold just got interesting with China’s gold market now open to investment from foreign investors. China has opened its gold market for a couple of reasons. They want to improve the value of their currency and also so that they can have an impact on current global prices on gold. This is happening at a time when elsewhere in the world gold prices are very low, in fact the selling price of gold is at a 5% discount to the actual gold production. At this kind of price mines close around the globe and try to scale back as their costs to extract are more than the market price so there is no profit for them. When that happens it means less gold is being mined and so prices will slowly begin to rise again.
Recently both China and Russia have hoarded gold on quite a large scale because they felt it gave them an alternative when the world’s economic stability was in question. But in fact now many investors and financial experts around the globe are saying your best chance for security in these times is gold. One way to do this would be to turn a traditional IRA into one that is gold backed. This means you will have an IRA that is backed with actual physical gold rather than having it backed by the US currency. The change from IRA to IRA transfer cannot be taxed either.
So let us look at why investing in gold is the best way to protect your wealth. Here are six very good reasons.
- Unlike cash gold is a tangible asset.
- If you look at the performance of gold over the Dow in the last ten years it has outperformed by more than 400 per cent.
- The US dollar is not as strong as it used to be and as a percentage of the world’s supply of currency it is getting smaller.
- Gold has been around long before currency and will most likely outlive it too. Gold is precious commodity much desired and that cannot be doubted.
- Some experts are saying that the time of the American dollar being the premier currency around the world is coming to an end. It is right now at a 15 year low and more businesses are becoming willing to use other currencies to work with.
- Since 1971 when the US abandoned the gold standard, gold prices have risen in value. Since just 2000 they have actually gone up over 500 per cent. Gold will give you a hedge against inflation, stock market problems, currencies losing value. You get liquidity and buying power, a way to protect your hard earned wealth and a harbor in which you can weather any future economical storms.
An IRA is an Individual Retirement Account so a gold one is an account that has gold stored in at rather than any currency or other assets that are paper based. Most gold IRAs are self directed meaning you have more control over the investments made but there are other types too that can be converted to a gold IRA including SEP IRAs, Roth IRAs, 401 (k)s and TSPs (Thrift Savings Plan).
Converting your current IRA into a gold IRA is not difficult at all and you get no penalties and it is tax free. There are some rules or regulations to be aware of but if you work with a good gold dealer they should be able to discuss these with their clients and offer recommendations depending on what you the client’s objectives and financial goals are.