The Fear in the Market

The latest measure of fear in the market is the possibility that Greece may default on its debt. It is not just the amount of debt that Greece has that sets the financial world on edge, it is the fact that a sovereign nation would default on their debt and the fear that it might lead to more debt defaults. If Greece defaults, it impacts the value of the Euro and that “fear” is reflected in the current Euro value. The markets react, currencies react and every day brings more news, more projections and more fear.

When the media announced that the 2012 projections on Greek debt made a default very likely, the spot price of gold immediately shot up. Gold is a safe haven investment and when fear is rampant in the marketplace smart investors protect their wealth by purchasing gold. Gold is an insurance policy against a financial meltdown.

Experts estimate that 5-10% of your portfolio should be invested in gold as a hedge against financial disaster or rampant inflation. If you haven’t protected your portfolio it may not be too late. The recent weakness in the spot price of gold is a buying opportunity for your gold investment insurance policy, if you do not already have one. Some experts are also estimating that gold could reach $2500 per troy ounce by end of year so there may be potential for gain as well.

One of the easiest ways to purchase gold is with gold bullion coins. These are coins like the American Gold Eagle, Canadian Maple Leaf, Australian bullion such as the Luna series, Chinese Golden Panda, Swiss Gold Francs, the Krugerrand and the Mexican Gold Pesos to mention a few of the most popular coins.

When you are purchasing gold bullion coins it is important to know what you are buying and to buy at a fair price. You want to make sure you pay a minimum over the spot price of gold and that you know the purity level of the gold in the coin. Gold bullion coins are not all the same. The level of purity is expressed as a percentage and reflects the troy ounce of gold in the coin. Many gold bullion coins are used as currency and it is customary to combine the gold with alloys to make the bullion coins more durable so they can withstand the handling that coins get when they are used as currency.

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