Buy and sell gold in today’s market, and you have every chance of being able to establish a lucrative business. The economic trends are very much in your favor, on both sides of the market. Firstly, when an economy falls into recession, the major financial institutions and wealthy individuals begin switching some of their investments out of the equity markets and into gold. There is such a strong trend, established over centuries, to suggest that gold prices rise as other markets fall, that the wisdom of such a move is scarcely questioned.
At the other end of the market, more people find themselves facing some kind of financial crisis. They either lose the job they were relying on to pay their bills, or the have a business which is simply not bringing in enough money. It takes time to adjust, and often there is a pressing need to raise some money to cover expenses which were incurred before the income was lost. One of the best ways to achieve this is to raise money on things which are of value, but not used. Gold jewelry and other small items are a perfect example.
Your opportunity comes in the buying industry, where you can buy and sell gold and profit from being the middleman. The people who are trying to raise money by selling their gold jewelry and items are often highly motivated and desperate sellers. They need spendable cash as quickly as possible. This has created a situation where they can often be easy prey for unscrupulous operators who set up business as gold buyers, but who either disappear with the items or pay ridiculously small sums of money for the gold they buy. The public are becoming aware of this, so if you want to succeed as a buyer you will need to establish credibility.
Buy gold, and you are taking the traditional step of hedging your investment against the vagaries of the depression economy. Many wealthy people are doing exactly that, and stockpiling a resource which has stood up to price fluctuation better than any other commodity in world history. Gold has been so stable that it was once used as the standard for the entire world monetary system. No matter where you were in the world, nor at what time in history, you could always sell gold for local currency and satisfy your basic needs. Now that the world economy is plunging into crisis, it is easy to see why gold is one again becoming the investment of choice.
The price of gold tends to be counter-cyclical, that is, it moves in the opposite direction to the prevailing economic trend. In times of depression, high unemployment, and turmoil, gold prices rise. Not only that, they gather momentum as the negative trend becomes more pronounced. When the economy is healthy, gold prices tend to be stagnant, yet they never really know the extremely negative movement which afflicts other sectors of the market.
There are fundamentally two kinds of people who are looking to buy gold in the present economic climate. The first type are the hedge investors, who have either sold their stock or property investments, or held them without increasing their exposure. These people are looking to invest their capital in something which is at as small a risk as possible while the economy picks up. They are also looking to make short term profits from rises in price.
The other type of people who are buying gold are the middlemen who deal directly with the public who are looking to sell gold. In an economic depression, it is inevitable that the people who have lost their jobs and are struggling to make ends meet will be looking to liquidate some of their assets which they have no further use for. Gold jewelry and other small items which may never even be looked at are a prime candidate. A gold buyer can often pick up cheap gold from a desperate seller, and then sell it as part of a bulk quantity to the investors.
If you want a riskier way to buy gold, but one with a greater upside potential, you can always look at the market of derivatives. The risks are significantly higher here, and it is not for anyone who does not know what they are doing. Ideally, you will have built up some kind of physical gold reserve first, before you think about trying this. If you are not trading from a solid base, you will make poorer choices because you will be affected by the possibility of serious loss. Unless you are experienced in derivatives, you would do better to simply buy gold.
The best way to overcome this problem is by paying out in ready cash, although this necessarily limits you to a local area. Giving a detailed breakdown of how you have put a value on the item will also help to reassure the seller. Advertising needs to be effective, because you need to allow enough margin between buying and selling price to make a profit. Placing ads in places where there are job ads or financial advice is sure to reach the right people.
When you buy and sell gold in this way, cash for gold is the greatest challenge is going to be spotting forgeries and fake gold. You will not be buying gold bars, so you won’t have to worry about bars which are primarily another metal, but which have been made to look like gold. What you will have to look out for are alleged gold items which are really just fakes with a gold coating. It is essential that you learn how to spot these before you buy and sell gold.