As expected in the context of economic recession, accompanied by inflation and distrust in currencies, and in the context of bankruptcies of major banks and distrust in bank assets, hard assets have become more valued and sought after by investors. This accounts for the increase of 30% in the gold price and the increase of 83% in the silver price this last year. But the optimistic prospects of both precious metals are far from being over, in China for one, both witnessing major developments in the context of a frantic demand. As such, lines of people waiting to buy gold jewelry may be seen every day, as well as retail investors rushing to buy gold bars by the kilo. No wonder then that jewelry shops think they will see a 10% increase in gold rates this year, while shopping malls expect to see investors buying even 10 kilos of gold once.

Faced with such an incredible demand, China is not only importing gold from any Western banks or holdings willing to sell, but it asked its banks to sell in turn their gold to interested investors. The most important Chinese bank sold thus 7 tons of physical gold in January (while it sold 15 in 2010) and 13 tons of silver (while it sold 33 in 2010). Besides, it decided to sell gold bars to retail investors, which can be resold later for money through the bank, subject to real-time gold rates. In this way, gold retail investment in China is forecast to increase by 10%-15% in 2011.

The bank has offered non-physical gold investment products as well, more precisely gold-price-linked term deposits. They were demanded so eagerly that the 1 billion Yuan-worth ones issued by the bank last year were bought by clients in a matter of several days this January.

Not only in China, though, are retail investors increasingly diversifying their portfolios with gold. After all, the annual appreciation of gold by circa 17% over the last nine years is known to investors worldwide. As such, the demand for the tangible asset has made some providers of gold bullion in the U.S.A., for instance, worth more than 1 billion dollars on behalf of their gold investing clients.

It’s as known a fact that new gold discoveries have become rarer, with the quantity of gold discovered falling sharply from circa 90 million ounces in 1997 to circa 10 million ounces in 2008. Therefore, it is to be expected that the frantic gold demand in China and across the world will increase even more in the price of gold in the foreseeable future.

An option to invest in gold is by purchasing a gold bar once; you will see how many dollars this will save you.

Due to the economic recession which is more and more manifest at present, affecting practically the entire globe, there has been a growing tendency, from both private persons and governments, to invest in gold and silver, as a protection against inflation. If we look at statistics, we shall see that the price of gold has more than tripled in ten years, which clearly illustrates the present investment trend.

Precious metals lost their importance and attractiveness when the stock market came into being because stock speculations often brought a handsome return on the money invested in a relatively short period. But people soon learned, in the most unpleasant way, that the operations on the stock market were profitable only when there was economic and political stability. It has proved to be a very sensitive financial institution, which promptly reacts to any event that threatens the economic balance.

On the other hand, governments, too, even those of the countries with a relatively solid economy, are trying to prevent inflation by investing massively in gold. These recent tendencies are illustrated by the spectacular rise in the price of gold and silver during the past decade. But when investing in these precious metals, one should bear in mind that, besides the market value, they also carry a premium, which is a percentage of their initial value added to the purchasing price. It depends on certain factors, the most important being demand and supply.

In such times of political and economic instability people have become aware of the necessity of safer investments, which should protect them against inflation and its consequences. Once again they have turned to gold and silver – a tendency clearly illustrated by the spectacular rise of their price over the past decade. Most commonly, gold and silver are purchased in the form of coins or bullion. But these investments should also be made wisely, taking into consideration that, besides the market price of those metals, there is also the premium, which is added to the initial price quotation. Put in very simple words, the premium represents an additional value, besides the market price.

The type of investment also depends on the period: if you plan long-term investments, then gold bars are the better option; if gold is only a temporary protection against inflation, gold or silver coins are recommended. Gold coins are also more competitively priced than their gold bar counterparts because they can be mass-produced, which reduces the costs of production. In addition, selling gold coins is often easier than selling gold bars because many more people can recognize gold coins and understand their intrinsic value.

Krugerrands are the official gold bullion coin of South Africa. Following its introduction in 1967, this coin has become one of the most popular and well-known gold bullion coins on the planet. In case you are contemplating an investment in gold, there are numerous excellent reasons to look at these coins first. You are probably asking yourself what makes the Krugerrand unique and special. There are a lot of great reasons to invest in these coins, and I will go over a number of them here.

The 1-ounce Krugerrand was already unique when it was introduced in 1967. It was the earliest gold coin to trade entirely for the amount of gold it contained, not for the face value of the coin, which is the value stamped on the front of the coin. It was one of the first gold coins to not have a face value on the face of the coin. On top of that, it was the earliest sovereign gold coin to feature exactly one troy ounce of gold. The actual weight of the entire coin is 1.0909 grams, as the rest is made from a copper alloy that makes the coin stronger.

The copper alloy also makes the Krugerrand distinctive. Most of the other sovereign gold coins are built with a copper and silver blend, which causes them to look shiny. The South African coin, alternatively, has a reddish hue along with a darker look. Some think that it looks like a penny, but this coin is unquestionably made from gold. Because of this copper alloy, it has one of the most unique appearances among sovereign gold bullion coins.

One additional interesting fact about this coin is the circumstances surrounding its invention. President Roosevelt signed an executive order in 1933 that made possessing more than a modest amount of gold illegal for citizens of the United States. Krugerrands were created over three decades later to go around this US law as a result of a loophole that allowed US citizens to hold on to their foreign gold coins considered to be legal tender. These coins proved to be amazingly popular, which caused their dominance in the worldwide gold market by 1980. These South African coins led the way for gold bullion coins from other countries, including the American Gold Eagle and the Canadian Gold Maple Leaf.

Krugerrands are one of the most distinctive sovereign gold coins on the market today, for all of the reasons we just saw. They would surely make a superb addition to any portfolio. If you are considering an investment in gold coins, today would be a great day to do so!