Is Gold a Solid Investment?

Investing in gold is an historically viable option for both securing money and earning more of it. Some people question the financial benefits of gold purchases, however, wondering if gold is indeed a solid investment. The gold spot price fluctuates each day and throughout each day depending on the platform reporting it. 

This makes gold investing a potentially interesting challenge despite the precious metal’s generally consistent performance across-the-board. Still, many consumers wonder if gold is truly a solid investment for modern times. Read ahead to learn more about the viability of investing in gold in 2022.

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Gold Spot Price and the Value of Gold 101
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Two aspects about gold are absolutely necessary for you to make the best investing decisions pursuant to this precious metal. You need to understand how to ascertain the immediate market value of gold at any given time. You also need to understand how to calculate the value of your personal gold investments.

Which of these two is most important?

Ultimately, knowledge of both aspects is equally important to maximizing your profits, although one might take precedence over the other depending on if you are buying or selling.

The spot gold price indicates the market price of gold at the current moment in time. This price fluctuates not only daily, but throughout each day and sometimes by the second. The gold price today is therefore not necessarily the gold price tomorrow.

The spot price for gold refers to its value by the ounce, gram or kilo, depending on the source displaying the spot price (and its location globally).

The MetaTrader4 (MT4) platform reveals fluctuations in the spot price of gold every second. Conversely, some markets (such as BullionVault) are closed on weekends and public holidays, only revealing spot prices on weekdays.

Most commonly the spot price of gold is quoted as a price-per-ounce based on U.S. dollars (USD), although quotes in other currencies are also available.

Such quotes, regardless of currency used, are beneficial for recognizing gold market trends and making decisions pursuant to buying vs. selling. If you are a long-term gold investor, you are likely more interested in weekly, monthly and even annual charts.

If you are a short-term hedger, you likely need spot prices in daily, hourly and even minute-by-minute intervals.

Understanding your gold’s fair market value helps you generate the most profits for the sale of your personal gold. The value of your gold is calculated based on its purity, weight and various fluctuating market factors.

Purity is assessed in karats (KT or k), which are measured to a scale ranging between 0 and 24. 24 karats equals pure gold, which is almost never found in common jewelry because of its softness and susceptibility to damage.

Most gold jewelry therefore rates between 22 and 10 karats. The weight of your gold also affects its value. A vital strategy is to separate your karats into applicable weight groups and have each group priced separately.

This helps assure you get as close to the FMV for your gold as possible (see more on this in Slide 3).

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