This is becoming relevant today, as little-known indicators such as the “base” and the “cobase” of gold ( gold basis and co-basis ) reveal a much more important message than that of simple price.
And it is that although it indeed collapsed in previous years, especially in 2013, it is also true that the view that this is why the pair of precious metals have lost “shine” is simplistic.
The base and the cobase, which describe in different ways the relationship between the spot price of gold (spot) and that of its futures contracts, has been telling us in recent years with its status of “backwardation” or “setback,” that the real market for physical gold is very tight and in high demand. The cheaper, the more they “shine.”
Base and cobase are thus authentic benchmarks for measuring the value of gold and silver, as the price is no longer.
Hence, more and more people, especially in the Asian continent, are taking advantage of the offer that means acquiring jewelry, coins, and bullion of these fine metals, at a lower price than in their peak moments before 2013.
In this way, they comply with one of the fundamental rules of investing in them: either you have them materially or cannot ensure that they are your property. Promises on paper are just that and can be broken.
This basic common sense rule raises some questions from the public regarding the “best” way to invest in this market.
As with all types of assets, there is no single answer. The ideal way to acquire precious metals depends on the tastes, preferences, and degree of information that the investor is willing to keep.
The profile of this investor does not require much more information. It is enough for you to know that in a pinch, you can dip into your jewelry to get out of a hurry.
Anyone interested in precious metals should know the real content of these in the products they purchase. This is possible thanks to the karats and the “law.”
In gold, the 24 karat represents the pure metal so that a smaller number of these incorporate different proportions of it in an alloy. The 18 carat, therefore, contains 75% fine metal; that of 14, 58.33%; that of 10, only 41.66%.
Take the case of a 14 karat gold coin weighing 5 grams in total. Thanks to the proportions that we comment on, we know that it contains only 2.91 gr. of the yellow metal.
Gold is very soft, so alloys are used with others to harden it, changing its original appearance.
That is why gold that contains a percentage of silver, platinum, or palladium is known as “white gold.” When it is copper, its appearance is reddish, like that of the very famous Krugerrand investment coin from South Africa.
In silver, the most common “grade” is .999 thousandths and .925 thousandths, which also refer to various proportions of fine metal per thousand parts.
On the other hand, it should be clarified that the most used unit of measure to weigh precious metals is not the gram but the “Troy” ounce.
The “troy” ounce is a unit of mass that is equivalent to 31.1 grams and should not be confused with the common ounce of 28.3 grams, an Anglo-Saxon measure of weight.
The spot price that we see in the international markets for gold and silver always refers to the price per troy ounce unless otherwise indicated.
This type of coin is one of the best options for most investors because, unlike jewelry, the additional cost paid on the fine metal content is low, and they are more or less affordable.
Most countries make coins of similar characteristics available to the public, but those with the best international reputation are usually used.
Finally, for those who prefer to buy small or large gold and silver bars, there are various options on the market ranging from 2 grams to 1,000 grams in the case of gold, or if it is in silver from 50 grams to 1,000 grams, to give just a few examples.