For first-time precious metal investors, it can be difficult to decide which metal is right for you. Due to its history, uses, and inherent value, gold is the foremost choice of precious metal investors, both first-time and veteran. When investing in gold, there are various forms of the metal you can seek to invest in: rare and/or collectible coins, gold mutual funds, gold futures, and more. However, if there is one form of gold that is the most reliable and preferable when investing, it is gold bullion.
Gold bullion is one of the most popular, best-known ways in which people buy and invest in gold. While the term “bullion” might lead people to think of the large gold bars you often see held in bank vaults, gold bullion is any form of gold that is either pure or nearly pure—the fineness of gold bullion is both determined and certified by weight and purity. Furthermore, gold bars aren’t the only forms of physical gold you should consider; truthfully, gold bullion can come in a variety of forms, from gold coins to bars and rounds.
When to Buy Gold Bullion
When is the right time for you to invest in gold bullion? There is no right answer to this question, as it depends on each and every investor; however, the simplest answer would be “whenever you think the time is right.” Investing in gold bullion is not something you want to jump into with little regard, as it’s not a short-term investment; similarly, gold bullion is expensive per Troy ounce, so it’s not an investment you want to simply throw money at.
There are a few things for you to consider, including how much are you willing to invest? What is the current spot price of gold? What is the purpose of your investment—do you see this as a short-term or long-term investment? Is this a market you have done your research on? All of these questions might seem strange, but it’s important to ensure that you are prepared—that you understand your reasons for investing in gold bullion—prior to making your first investments.
Researching the Bullion Dealer
Prior to making your investment and purchasing your gold bullion from a dealer you have found online, you’ll want to perform considerable research on the company. First, make sure they are a respected business—one that has reliable reviews and information detailing their history of professionally buying and selling bullion within the market. Second, if you’re unsure of the reliability of the company, look them up through a resource like the Better Business Bureau, seeing whether North American companies have had any complaints lodged against them and if they are reputable enough to make an investment with them.
Understanding the Price of Investing
The price of gold bullion fluctuates on a daily basis. For this reason, you’ll want to watch the gold spot price for some time, along with performing research on the long-term history of gold, determining how it has shifted within the market over the years.
Moreover, you’ll want to consider the fees that will be added on to some of your purchases. Fractional gold pieces (those that are less than one whole ounce) will often be more expensive than the melt price, and specific pieces of gold—particularly commemorative and collectible coins—will have an added retail commission, increasing the price by about five percent or so. But also remember, although you can avoid certain fees by purchasing one-ounce gold bars, it will be much more difficult to liquidate your assets.
Once you have your gold bullion in your possession, you will need to consider where you will securely store it. Common choices for home storage can range from locked drawers and floor safes to other key- or password-protected boxes; however, if you’d prefer to not have it stored at home, you can contact a local bank to store your gold investments, although this will come at a price.
While these are some important tips about investing in gold bullion, there are many other considerations, from how much of your portfolio you want to devote to bullion to what type of gold bullion you think would interest you the most. If you have any other questions or need clarifications before investing, our representatives at Provident Metals are available to help you feel confident while investing.