Highs in the current gold price of more than 55 euros per gram have triggered a new rush for the precious metal. No wonder, since gold should not be missing in any well-diversified portfolio!
Because with a gold share, value stability is added to one’s own financial investment. This protects against fluctuations that can occur at any time with risky investments such as stocks or cryptocurrencies. Although factors such as the dollar exchange rate, the oil price or the mood on the stock exchanges also play a role in determining the current price of gold – precious metal prices change only comparatively slowly.
If we calculate the current price of gold and compare it with historical values, it quickly becomes apparent that anyone who has invested in gold has even been able to make a solid Achieve profit of about 40 percent! This means that the precious metal cannot keep up with an offensive equity portfolio; investors are nevertheless likely to have been pleased with the inflation compensation.
Unlike many other investment assets, gold is also “tangible”: you can buy it in the form of coins or even purchase it as gold bars. Stored in its own safe, it is worth a look at any time. And in times of real crisis, it simply feels good to know that your assets are safe. But why is gold, of all things, so valuable and what do you have to consider when buying it?
Why is gold so valuable?
Precious metals are only available in limited quantities. Although people have been trying to find gold for thousands of years, only a comparatively small amount has been mined so far. If all the available gold were melted down, it could only fill three and a half 50x25x2 meter swimming pools!
By the way, most of the gold was discovered in China, South Africa and Australia. The continent Down Under has a particularly close relationship with the precious metal. This is also reflected in the many exclusive gold coins: For example, the Lunar I coin with the tiger minting or the buffalo variant from the years 97/98 is highly sought after among collectors today. The newer Winged Victory or Wedge-tailed Eagle minting are also already attracting attention.
Today, the total amount available increases only minimally, because only a few tons are extracted each year. The situation is similar with the value of silver, which is popular as an investment for similar reasons.
Thus, precious metals are in clear contrast to foreign currencies such as the euro or the dollar! After all, our money is constantly “multiplying”. However, as the amount of capital in circulation continues to increase, it also loses purchasing power at the same time. We can indulge in less and less for the same amount year after year – inflation strikes.
Among investors, the desire for an investment that is safe and does not lose value over time is enormous. The current gold price is impressive proof of this, as it also comes from high demand.
How is the current price of gold created?
While we can always look up the current price of gold in euros – how this amount is arrived at is much more difficult to describe. This is because there are two very different factors at work here: On the one hand, gold has unique chemical properties that are important in industry, for example. Its extremely high resistance to acids and very good electrical conductivity are extremely useful attributes.
At the same time, however, the precious metal has an emotional appeal to us humans. It has always been considered a material for wedding rings, due to its resistance, and was already particularly valuable in ancient times, as it resembles the sun with its golden yellow color. Therefore, it is hardly a surprise that the current gold price is also strongly dependent on emotional factors!
Thus, political or economic crises as well as the fear of them are enormously important for the current gold price. Investors buy more gold in difficult times to keep their money safe. If inflation rises, for example, the current price of gold usually increases as well, because the precious metal is an ideal means of combating monetary devaluation. The increased demand is immediately noticeable in the current gold price!
How to calculate the price of gold
Not all gold is the same! Different chemical compositions ensure that there is no “one” current gold price – because there is not just one type of gold. The reason: the special properties of the element are not ideal for all applications. For example, for use as dental gold, an alloy is used in which additional components are added to the gold.
The result is a harder material that still looks like gold. This system is also used for jewelry to reduce the cost of chains, earrings and the like, or to increase their strength.
The best-known standard for gold is undoubtedly the troy ounce with a fineness of 999. This is exactly 31.1034768 grams of gold, which has a particularly high purity: of 1,000 parts are 999 gold – the highest purity grade of the precious metal. Often this quality level is also called 24 carat gold. It is by far the most popular category in the Rarecoin store and the most frequently chosen by our customers.
Besides the 999 fineness, 750, 585 and 333 are also common. These alloys each contain less gold and higher proportions of other metals. Each individual variant also has its own current gold price. What 999 gold is worth therefore differs, for example, depending on the time of day.
Moreover, the troy ounce of gold is perfect for minting coins. Interesting motifs, high-quality workmanship and limited availability have long made such gold coins sought-after collector’s items.
The fact that collectors appreciate such gold coins is also reflected in their value development: The “1812 – A New World Map” and “1626 – A New World Map” coins, for example, are limited to only 750 pieces worldwide. They have long exceeded their material value – one troy ounce of 999 gold at the current gold price – by far and are traded today due to their rarity already for about double!
Collector coins can therefore be interesting for anyone who wants to buy precious metal coins. With them, the investor bets not only on the development of the material value, but also on the value of the respective coinage. And of course, these pieces are a real eye-catcher!
By the way, the choice of motifs today is wide! The “Dragon & Phoenix” coin, for example, is aimed at collectors who prefer the fantastic.
How to recognize the authenticity and fineness of gold
In movies, people simply bite on a piece of gold to determine its authenticity – in reality, this is not recommended! Pure gold can indeed be pressed in with the teeth. However, those who opt for this testing method end up with bite marks on the high-grade gold coin or dental problems if it is a harder alloy. Both results are less than desirable!
To determine value and authenticity, other methods are better suited: With a strong magnet, for example, pure gold can be identified well. This is because the precious metal is repelled by the magnetic field. If the piece of jewelry under test does not move away from the magnet or is even attracted to it, it is not gold or merely an alloy with a low content.
The purity of gold can be determined even better by so-called dip weighing. For this purpose, the gold piece to be tested is first weighed on a very fine digital scale. We then place a glass of water on this scale and tare it to “0”. The gold is now sunk into the liquid on a thin thread and the indicated weight is noted.
If we now divide the value for the “dry gold” by the submerged weight, we obtain a number that provides information about the type of gold! If the result is about 19.32, it is for example pure 999 gold. The exact values of each type of gold are:
|Weight (min – max)||Fineness|
|19,32 g/cm3||999/1000 (24 carat)|
|17.61 g/cm3 – 17.82 g/cm3||916.67/1000 (22 carat)|
|14.96 g/cm3 – 15.45 g/cm3||750/1000 (18 carat)|
|13.02 g/cm3 – 13.64 g/cm3||585/1000 (14 carat)|
|10.87 g/cm3 – 11.58 g/cm3||333/1000 (8 carat)|
Once the fineness has been determined, the current gold price in euros can be looked up. If this is multiplied by the weight, the value of the respective gold piece is obtained. However, somewhat lower amounts are often offered at the time of sale, since slight losses occur during further processing, for example.
Especially with coins, it is not always just the material or gold value that is decisive. Historically valuable pieces or limited mintages often fetch top prices, even though the price of the metal used is low. In the case of interesting attic finds, it is therefore always advisable to have the coins appraised by an expert.
In order to track down professional counterfeits – for example, gold bars – the only way is often to go to a professional. Special laboratories can clearly determine the authenticity of gold. However, depending on the method used, there are also corresponding costs. Considering the current price of gold, it may still be worthwhile to have this security.