Best Places To Buy Gold And Silver Online
eBay and Craiglist are both great places to start. But unless youre sure that youre dealing with a reputable seller, you might want to look into other sites that specifically specialize in precious metals.
Weve compiled a list of 20 of the best online gold dealers, along with reviews of each one to help you find the best place to purchase gold and silver.
Key Challenges With Precious Metals Investing
Learning how to invest in gold and silver is challenging because directly investing in any commodity is filled with headwinds against you.
First of all, commodities, including precious metals, dont produce any cash flows like a profitable business or even an interest-paying bond does. Instead, they just sit there, as you hope they go up in price. Gold and silver are good at holding their value over the long-term against inflation, but apart from that, dont do a lot for you by themselves.
Warren Buffett perhaps said it the best:
The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isnt going to do anything for you.it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time.
Secondly, there are transaction costs associated with precious metals investing. If you buy physical gold, theres a company in the middle making a profit. They buy it at wholesale prices, turn it into fine investment-grade gold, and sell it at retail prices. There are potentially shipping costs, and there is a cost associated with security and storage, along with a risk of theft or loss. If you instead invest in an ETF that holds precious metals, they have an expense ratio, which covers security and all the administrative costs of managing the fund and their hoard of metal.
Golds Only Significant Selloff Occurred Just After Its Biggest Bull Market In Modern History
Gold rose more than 2,300 percent from its low in 1970 to the 1980 peak. So it isnt terribly surprising that it fell with the broader stock market at that point. In recent years, the situation has been the exact opposite. Gold endured a 45 percent decline from its 2011 peak to its 2016 low, which was one of its worst bear markets in modern history. At the same time, this isnt entirely a shock either, given its quick gains during the 2008 crisis and the 2011 crash.
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A Closer Look At Some Of The Top Gold Etfs
There are several ways to invest in gold. You can buy physical gold in the form of bars, coins, or even jewelry. You could also purchase shares in a gold mining company or a gold-focused exchange-traded fund .
Gold ETFs fall into two basic categories:
- Those that own physical gold.
- Those that own gold mining stocks.
Here’s a closer look at the top gold ETF options.
Gold Investments By Allocated Gold Accounts
An allocated gold account is similar to a traditional bank account. Instead of storing cash in your bank account though, you store physical gold. In an allocated account you own specific pieces of gold. These accounts are typically only offered to those with high net-worth and not every bank offers these types of accounts.
There is another form of these accounts known as unallocated accounts. In an unallocated account you own a portion of gold but you do no own a specific piece of physical gold. These accounts can be somewhat merky as the gold is more of a credit from the bank.
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Buying Gold & Silver From Jm Bullion
By purchasing their gold and silver online, customers are able to reap a number of benefits that simply are not available at local coin shops, which is why we encourage you to make your purchase online with us at JM Bullion. We provide our customers with wider selections, lower prices and safer transactions as well as free shipping on orders over $99 and insurance on all orders. If you would like to learn more about the benefits of buying online from JM Bullion, please give us a call at 800-276-6508. You are also free to reach us through live chat or online forms.
Best Way To Buy Gold And Silver
In todays digital online world, we seldom own assets that we can physically see and touch that hold and increase their value despite . Gold and silver are the only currencies that have been in use for the last 5,000 years. What is the best way to buy gold and silver in todays markets?
Assets such as gold and silver are ruled by the law of physical supply there is only so much gold and silver available. When you buy gold or silver, you can physically see the item and weigh it yourself if you chose, so it is much easier to determine the actual value.
Where does gold and silver bullion come from? After the metal has been mined and then refined, it is generally sold to bullion banks. These banks are the middlemen between the suppliers and the buyers.
Just like a normal bank is the middleman between you and the governments reserve bank, bullion banks are the intermediaries between the gold suppliers and the buyers.
Gold producers sell to the banks, despite what the market demands at that particular moment are, and buyers purchase from the bank. The bank stores the gold, handles financing and basically distributes the gold across the globe for investment or industrial purposes, or jewelry. The buyers in this instance are the companies or mints that sell the bars or coins.
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Should You Invest In Gold
If youre concerned about inflation and other calamities, gold may offer you an investing safe haven. Though in the shorter term it can be just as volatile as stocks, over the very long term, gold has held its value remarkably well.
Depending on your own preference and aptitude for risk, you may choose to invest in physical gold, gold stocks, gold ETFs and mutual funds or speculative futures and options contracts. Regardless of the form of gold you choose, most advisors recommend you allocate no more than 10% of your portfolio to it.
Any form of investing carries risks. Gold is no different. But the idiosyncratic gold market isnt forgiving and takes a long time to learn. This makes gold ETFs and mutual funds the safest choice for most investors looking to add some of golds stability and sparkle to their portfolios.
Finding The Best Gold Etf For Your Portfolio
Gold ETFs allow investors to speculate on gold prices without buying physical gold. The benefit of owning a gold mining company ETF over a gold price ETF is that it can generate higher returns.
Gold miners can use the cash flow they earn from producing gold to expand their production, make dividend payments, and repurchase shares. Those investments and shareholder returns position gold mining companies to potentially deliver better total returns compared to the price gains of gold.
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Silver Did Not Fare So Well During Stock Market Crashes
In fact, it rose in only one of the S& P selloffs and was basically flat in another one. This is likely due to silvers high industrial use and that stock market selloffs are usually associated with a poor or deteriorating economy. However, youll see that silver fell less than the S& P in all but one crash. This is significant because silvers high volatility would normally cause it to fall more. Also notice that silvers biggest rise took place amidst its biggest bull market in history. It also ended flat by the end of the financial crisis in early 2009, which was its second-biggest bull market. In other words, we have historical precedence that silver could do well in a stock market crash if it is already in a bull market. Otherwise, it could struggle.
The overall message from history is this:
Odds are high that gold wont fall during a stock market crash, and in fact, it will likely rise instead. Silver might depend on whether its in a bull market.
So, why does gold behave this way?
Gold Investments In The Form Of Gold Mining Stocks
A way to invest in a gold mine is to invest in mining stocks. You are basically backing the mining company and the prices of gold mining stocks follow the gold industry and the performance of the company. Gold mining has its risks though, remember its a dangerous business and this factors into the investment.
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How To Buy Gold Stocks Mutual Funds And Etfs
Investing in a gold stock, ETF or mutual fund is often the best way to get exposure to gold in your portfolio.
In order to buy a gold stock or fund, youll need a brokerage account, which you can open with an online broker . Once your account is funded, youll be able to pick the gold-related assets youd like to invest in and place an order for them on your brokers website.
Keep in mind that individual stocks and ETFs are purchased for their share price which can range from $10 or less to four figures but mutual funds have a minimum investment requirement, often of $1,000 or more. Learn more about how to invest in stocks and how to invest in mutual funds.
» Need guidance? Check out our full roundup of the best brokerages
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Check Current Gold Spot Prices
It’s a good idea to follow the price of gold for some time before deciding it’s the right time to invest. You dont want to buy at the peaks, so you’ll want to understand what factors affect the price of gold. For instance, gold coin dealers maintain that numismatic coins are worth more than just the metal contained inside of them, which is how they can justify charging a premium when you buy. There’s really no getting around this, so be cautious of any dealer that claims it isnt charging a premium.
Shop around dealer websites to make sure you’re paying a fair price for gold. Check exchange sites to find out what the spot price is, and expect to pay a 5% to 8% premium above the spot price for a gold coin.
Top Gold Miners: Agnico Eagle
One of the top gold miners Ive been pounding the table on of late is Agnico Eagle . This top Canadian gold mining company has delivered excellent results of late. The companys revenue and earnings growth, boosted by rising gold prices, has provided a strong investment thesis to begin with.
However, there are other key catalysts many investors are watching with this stock. Among the top catalysts is Agnico Eagles bid to consolidate the gold mining sector further. As many investors may already be aware, Agnico Eagle is set to merge with Kirkland Lake Gold in a deal that will grow Agnicos reserve base, and provide attractive, long-term upside to investors. This deal carries a favourable multiple and is one I see as highly accretive.
The combined Agnico/Kirkland Lake entity will be a top-tier global producer, with dominant reserves and excellent fundamentals. For long-term investors looking for a gold miner to gain exposure to precious metals right now, Agnico is a great choice.
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How Well Does Gold Hold Its Value In A Downturn
The answer depends partly on how you invest in gold, but a quick look at gold prices relative to stock prices during the bear market of the 2007-2009 recession provides a telling example.
Between Nov. 30, 2007, and June 1, 2009, the S& P 500 index fell 36%. The price of gold, on the other hand, rose 25%. This is the most recent example of a material and prolonged stock downturn, but it’s also a particularly dramatic one because, at the time, there were very real concerns about the viability of the global financial system.
When capital markets are in turmoil, gold often performs relatively well as investors seek out safe-haven investments.
Vaneck Vectors Junior Gold Miners Etf
The VanEck Vectors Junior Gold Miners ETF offers the most upside potential. That’s because it focuses on smaller mining companies, known as junior gold miners, some of which are still exploration-stage companies. These smaller miners could expand their production faster and deliver higher returns than their larger rivals. However, with that higher reward potential comes more risk. That’s because they lack the scale of their larger rivals, so making a misstep such as cost overruns on a mine development could be costlier to investors.
The VanEck Vectors Junior Gold Miners ETF is reasonably large and has a relatively low expense ratio. This gold ETF has nearly 100 holdings. Its five largest are:
- Pan American Silver
- Endeavour Mining
- First Majestic Silver
These mining companies are much smaller than most held by the VanEck Vectors Gold Miners ETF. The largest holding on this list has a market cap of $6.2 billion. Further, the five largest holdings of this ETF make up less than 25% of its assets. Because of that, investors have broad exposure to several up-and-coming gold and silver mining stocks.
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Golds Yin To The Stock Markets Yang
The reason gold tends to be resilient during stock market crashes is that the two are negatively correlated. In other words, when one goes up, the other tends to go down.
This makes sense when you think about it. Stocks benefit from economic growth and stability while gold benefits from economic distress and crisis. If the stock market falls, fear is usually high, and investors typically seek out the safe haven of gold. If stocks are rockin and rollin, the perceived need for gold from mainstream investors is low.
Historical data backs up this theory of negative correlation between gold and stocks. This chart shows the correlation of gold to other common asset classes. The zero line means gold does the opposite of that investment half of the time. If the line is below zero, gold moves in the opposite direction of that investment more often than with it if its above zero, it moves with that investment more often than against it.
Stocks Have a Negative Correlation to Gold
You can see that, on average, when the stock market crashes , gold has historically risen more than declined. Gold has also historically outperformed the cash sitting in your bank account or money market fund. Even real estate values follow gold only a little more than half the time.
This is the practical conclusion for investors:
- If you want an asset that will rise when most other assets fall, gold is likely to do that more often than not.
Theres one more possibility we have to consider
Wheaton Precious Metals Corp
Silver Streaming and Royalty Business That has Produced Significant Gains for Investors
Founded in 2004, Wheaton Precious Metals quickly grew to become one of the largest precious metals companies in the world, boasting a market capitalization of nearly $19 billion. The company was originally formed as a subsidiary of Goldcorp, one of the largest gold producers in the world.
WPM is different from most other silver companies on this list. While the company does have its own mining operations, its core focus is on silver streaming. That means the companys core operations provide the funding mining companies need to build and operate mines upfront in exchange for a discounted opportunity to purchase all or a portion of the silver produced by the mine.
The business model works great for Wheaton. The company is known for having significant cash flow, generating strong revenues, and enjoying high levels of profitability compared to traditional mining companies.
At the same time, the stock is down around 16% from its price just a year ago. While that may be a turn-off to some investors, to those with bullish opinions of the stock, it points to a serious undervaluation thats ready to be exploited for profits.
As revenue and profits continue to grow at incredible rates, the companys undervaluation is likely to be short lived.
Wheaton Precious Metals Most Recent Financial Results
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Physical Gold And Silver Coins/bullion
The oldest method for gold and silver investing is just to buy some physical coins or bars.
The advantage to the physical approach is that its the safest, least complex way to invest in gold and silver. You buy some from a reputable vendor, and hold it in a safe place.
However, it quickly starts to get more complex than that. Where do you store it, and how do you keep it safe?
Personally, I think owning some gold coins tucked away in your home is a good idea. Physical bullion is a nice off-the-grid store of value.
Weve all seen areas that are hit by devastation, either economic or weather-related, where its good to have some hard assets on hand. You cant always rely on banks or electronic payment networks to provide required funds during times of crisis.
Im not talking about zombie apocalypses here just your average run-of-the-mill major economic problem or natural catastrophe.
In 2015, during Greeces economic crisis, a run on banks resulted in withdraws being limited to 60 euros per day. Youd have to wait in long lines just to get a trivial amount of cash.
In 2017, when Puerto Rico was devastated by a hurricane and the whole territory was without power, business couldnt accept credit cards and cash was needed for everything. But many banks were closed and others were limiting withdraws to $100/day. Again, there were massive lines at banks and the handful of working ATMs.