Beginner’s Guide To Valuing Gold


This short informational introduction for interested readers takes the sideswipe towards gold as an investment vehicle rather than gold as a tangible asset or object, say in the form of a heavily weighted gold coin, gold ingot or jewelry. In determining the value of gold beginning investors are called upon to interrogate the gold producer’s inherent value. The investor will be evaluating how much profit the gold-producing company has been able to generate during a set period of time.

Further estimations on the value of gold take into account its company’s ability to pay its shareholders in dividend and the standard measurement of price to earnings ratios. Investors in gold, may regard gold as an inherent commodity. In doing this, they will also be looking at matters related to supply and demand of gold. This will also be looked at against how much the selected gold company is producing or at gold output.

One argument goes that gold is no longer being measured to the same degree it once was for a number of years after its first discoveries during the modern era of capitalism. But fair value is still being attached to gold for both aesthetic and esthetic reasons. It goes without saying that the overriding factor of supply and demand will have an influence in the price. For now, it is hard to see gold’s value diminishing any day soon.

It is still being used to manufacture jewelry. And unless an alternative precious metal or material will be found to replace it, gold is still being used in the parts and components of computerized items.  From an investment point of view, gold will continue to be held in high regard as a must-have precious resource, held as what is known as the safe haven investment. When panic sets in, there is that tendency for conventional or mainstream stocks to be dumped.

the value of goldestimations on the value of gold

Subjectively inclined investors quickly turn to money instruments, unless of course, these have lost its value, and gold, peculiarly of course, its value increases dramatically when all or a majority of other assets collectively decline in value.  Until such time that an alternative source of tangibles or non-tangibles can be found to replace gold, it looks as though gold will continue to enjoy, well, more than its weight in gold.

Bespoke or contrarian investors remain convinced that the crypto-currency explosion remains overrated in favor of gold. The salient argument goes that, still to this day, not enough is known about this (still) relatively new form of trade or barter. It could well be many years before it or any other alternative comes to replace gold as a safe haven currency. Domestic investors could also have a field day.

Like investing in fine art perhaps, domestic or private investors can shop for what are known as the valuable Kruger Rands. But around the time that this article was published, the SA Rand as a real rate of exchange, was heavily weak against the raging US Dollar.