The continent of Africa continues to be the world’s fastest gold-producing region. The history, and events of today as they pertain to the continent are quite telling as to gold’s monetary value regardless of market conditions. Mali and South Africa have been two of the world’s top gold-producing countries for quite some time. Gold prices have risen by more than 500 percent since 2002, and will continue to rise as the global central banks continue their policies of liberally printing and debasing the value of world currencies. Wealth attracts criminal opportunity as we’ve seen with the country of Nigeria unfairly targeted in the well-known “Nigerian prince” scam. The following are some tips on gold investing and how to avoid being scammed.
The Nigerian Minerals and Mining Act of 2007 prohibits “unauthorized” exploration and excavation of minerals from the ground, including gold. The federal government has issued permits and titles to several individuals and companies to begin mining. But the process has been slowed because villagers, who’ve lived on the lands for centuries, aren’t leaving quietly, according to the Global Post. Locals are well aware of the precious metal’s presence all around them, but in the past haven’t pursued mining because of small returns on their time investments. This has all changed now that gold is selling on international markets for about 10,000 Naira ($60 U.S.) per gram.
Nigerians are forming local associations and unions to pool resources and slowly buy back the right to mine their lands, according to Voice of America News. Lead poisoning is common, however, for miners who don’t take the necessary precautions. Any associations and unions looking to mine should invest in a supply of dimercaptosuccinic acid (DMSA), which removes lead from the body in case of poisoning.
Gold is now far too expensive for most Nigerians (and most others around the world) to buy at market prices, but is a great investment for those with the means. The main concern with buying gold bullion bars is, of course, being ripped off. A reputable online seller, such as US Money Reserve, will have disclosures and any risk factors on their website. The premium which any company charges over market value should never exceed five percent. The company should also have a verifiable address and phone number.
Gold Exchange Traded Funds
The best thing about gold ETFs (stocks) is that you can generally purchase shares for far less than on the per ounce gram basis bullion is sold. The Nigerian Stock Exchange added the NewGold ETF to its index in December 2011, which enabled investors to diversify without buying the physical metals. The fund has done relatively well in the subsequent 13 months after starting off slowly.
If you are trading in gold, do well to share with us in your comment. Cheers.