Your guide to buying gold bullion coins and bars
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Gold can play an important part in your investment portfolio. It plays a defensive role as demand and prices often increase in tougher markets and recessions. Owning gold can help soften the blow when markets crash, protecting your purchasing power when stocks are showing high volatility. It’s a valuable asset to incorporate into your portfolio.
If you’ve never purchased gold before, you probably have a lot of questions about how and where to start investing. This guide will help you find the best way to buy gold bullion and make the most of this unique asset class.
Where to buy gold coins and bars
The best place to buy gold coins and bars is usually a bullion dealer. This is a business that buys and sells coins and bars made by national mints and private refiners. You can usually also sell gold coins and bars to them when you’re ready to cash in your investment.
Bullion dealers often sell silver coins and bars as well, which can be a more affordable way to enter bullion investing. Silver can also act as an inflation hedge and a safe haven investment, but it’s a bit more sensitive to recessions than gold because much of the demand comes from industrial usage. Silver is widely used in electronics, automobiles, and solar panels, so economic slowdowns can have more of a mixed impact on silver prices, depending on the circumstances and industries hit the hardest.
A bullion dealer offers more security and confidence than buying bullion online or from a pawnbroker. Fraud does happen to unsuspecting buyers, especially on online marketplaces, and if you see something online that seems too good to be true, it likely is.
How do gold premiums work?
When you first get into gold, you may wonder why the sale price of the metal doesn’t reflect the spot price.
When you look up the price of gold on global markets, you will find what’s called the spot price. The spot price does not reflect the cost of transporting, insuring, and manufacturing the metal into coins and bars. These costs are covered by the premiums charged by bullion dealers, which are usually a percentage of the spot price.
The premium is an important factor to consider when you’re anticipating your returns. Buying larger quantities of gold can often lead to discounts on the premium so that you can pay less per ounce.
Coins vs bars
Whether you should invest in coins or bars is a matter of both price and personal taste. Those who want to build a collection of interesting coins with unique designs might look to coins from around the world or different series released by national mints.
However, coins have higher manufacturing costs and tend to come with a higher premium. If price is your primary concern, bars can provide you with the same weight at a lower cost.
If you’re interested in buying gold, start researching bullion dealers in your area, compare premiums, and decide whether to buy coins or bars.
