Many first-time investors will look to stalwart investment vehicles like gold and silver when setting up their portfolio or rebalancing their portfolio for the first time. Precious metals have a history stability which makes them very appealing for adding a little bit of security to their portfolio.
For some investors physical gold is also a very appealing option for preserving their wealth and insulating them against uncertain economic distress. It can also provide them with a source of liquidity, should a period of short-term economic distress develop into a full-blown financial and cultural upheaval.
In a situation like this, it’s important to first look at a variety of factors, to make sure you are buying the right amount of gold and in the quantities or forms that meet your intended goals. This involves asking yourself a series of very important questions.
How Much Should I Pay For Physical Gold?
Gold’s spot price is the most important factor when it comes to determining just how much you should pay for it. It essentially indicates the current market value of any precious metal while also serving as the basis for its bullion pricing. It’s important to keep in mind that spot prices constantly fluctuate. So, make sure to look up the most up-to-date spot price.
Once you have an accurate spot price for gold, you will need to research precious metals dealers who are offering prices that are closest to the original spot price. This tends to be the dealers who offer the lowest premiums.
How Do I Find The Gold Dealer?
The first step in the research process of finding the right dealing calls for finding a list of dealer who are officially licensed to sell precious metals. You should also take the time to verify their status to ensure that what they offer has been lawfully obtained. This might include requesting chain of custody documentation.
When you talk to any dealer, you should also ask them basic important questions to make sure they understand the various policies regarding precious metals sales, such as taxation and IRS reporting. A precious metals dealer who can’t easily answer these basic and important questions should raise a redflag.
Once you have confirmed each dealer’s license status, you can start comparing them. When it comes to examining prices make sure to account for other possible expenses outside of their premium rates. This might include things like shipping, insurance and even taxes. Take note of their different policies regarding their preferred shipping method and mode of payment. Give preference to those who can best accommodate your specific needs.
Choosing The Form Of Gold You Want To Buy
After you have found the dealer that is right for you, you will to determine the type or quantity of gold you want to purchase. There are different options to consider including things like bullion, bars, wafers, and coins. Some dealers will have premium policies and investment benefits associated with these various forms.
Coins are typically the most recognized form of gold as they can also be used as currency. Some have stunning designs which makes them a good choice if want to display your investments. Just keep in mind that there might be mintage restriction by the government. This means the coins might be produced in limited quantities, which could potentially increase their value as both collectibles as well as investment pieces. This general rarity might also mean a particular coin could carry a higher premium rate than basic bullion.
It’s also important to note that there is a difference between cons and rounds which do not have a circulating face value. The value of a round is based solely on its gold content.
Gold bars are have been pressed into a standardized rectangular shape. This makes them easy to stack on top of each other. It also makes for more compact storage and transportation. Gold bars are relatively popular among investors in physical gold as they typically have a low premium and allow you to bulk a large amount of gold in one single unit.
What Are My Payment Options?
Once you have selected the type of gold you would like to purchase, you will then need to select your method of payment. Different dealers might have specified, or preferred forms of payment. Some of the more common include credit/debit cards, transferred via PayPal, as well as paper checks and bank wiring transactions.
What Are My Security Options For Safely Storing The Gold I Purchase?
With physical gold you are going to have to choose between whether you want to store it yourself, or if you want to store it at a certified depository.
If you store it in your own home, then you will need to invest in a safe or some other form of security to reduce your chances of losing it to theft. There are some dealers who might be able to help point you in the right direction. There are also some security companies that offer services to design and install top of the line vaults. Most people who own physical gold and keep it in their own home also seek out insurance policies to further protect their investment.
If you intend to purchase a large amount of physical gold, you should strongly consider seeking out a secure depository. They allow you to store it away in a secure facility that has all the necessary insurance and security measures in place. From that point on you will pay a basic fee to continue to retain your gold’s place in their facility.
Should I Buy Gold OnLine Or Through A Local Dealer
There are many dealers available online or through other remote portals. However, with many of these you may also incur additional costs associated with transporting the physical gold from their source through a chain of custody to you. With some online dealers this includes service fees associated with the appropriate security and insurance methods.
A local dealer also gives you the opportunity to work with someone face to face. Many of these dealers will have lesser fees for transport and insurance that are passed on to you. Some may even keep a modest amount of physical gold in a local secure depository.
You may even be able to simply use the same depository to house your gold and eliminate transport and security costs for the transaction. Just make sure to do your homework and find a local dealer who ticks all of the boxes we discussed above.