How much gold do you need to own?

Recommendations on how much gold you should keep in your portfolio vary. As for gold, silver and other precious metals, financial blogger Len Penzo points out that many experts recommend keeping 10 to 20 percent of your net worth (excluding home equity) in precious metals. Of course, this list doesn't include everything, and there are other considerations to keep in mind as well. In terms of what financial professionals can recommend, we've seen numbers ranging from 1 percent to 20 percent.

Where one can be within this spectrum depends on a number of factors. That said, many so-called “experts” recommend investing in stocks, with an investment of 30 to 40% in precious metals. Usually, it is said that between 10 and 20% of that must be in gold and silver each, although that is up to you. This assignment can be a little more confusing when considering platinum, palladium and other metals as well.

Therefore, investing in gold is a good way to invest in the future, because gold will be more valuable when the US dollar loses value. The first step in determining the “correct amount of equity insurance needed to survive a monetary failure” is to identify a realistic dollar price of gold based solely on the actual supply of foreign exchange and the amount of gold held by the US Treasury and global central banks. That means that the dollar TODAY is overvalued against gold by a similar amount and, therefore, anyone who buys gold TODAY buys it at a sharp discount on its real value. However, this didn't last long because in 1971 President Richard Nixon put an end to the convertibility of US dollars into gold and created a fixed exchange rate between paper money and gold.

If you're thinking of buying gold and silver as an investment or a way to make a quick buck, then you're buying them for the wrong reason. Alex, the data I've seen suggests that only 1 in 100 people buy physical gold and silver coins and bars. In Adam Fergusson's book When Money Dies, he notes that Germany passed a law on February 14, 1924 called the “Third Tax Ordinance” that revalued existing mortgages to 15% of their original gold price based on the price of gold (in German marks) on the exact day and year in which the mortgage originated. Investors treat gold more like a currency than silver, a metal that has far more industrial uses than gold.

The United States government only places restrictions on the amount of gold that can be exported to other countries because of the Gold Standard Act of 1933.The maximum amount of gold you can own without going over is 500 troy ounces (just over 21 pounds) of pure gold. For those who want to invest in gold bars, you can purchase the 1 oz American Eagle Gold Bar from Grays Silver. Canadian dollars or dollars and you can use the increase in the price of gold and silver to offset the increase in the goods and services you are buying.

Hattie Bonser
Hattie Bonser

Passionate bacon enthusiast. Infuriatingly humble internet evangelist. Passionate coffee evangelist. Passionate food scholar. Freelance troublemaker. General food fan.