Know The Difference Between Bars And Coins
While all forms of pure gold have significant monetary value, not all investment-quality gold is equal. From an investment perspective, investors wanting to add the physical product that tracks the price of gold may wish to avoid gold coins. These coins often feature attractive designs, have historic value, and contain a lower quantity of gold, but still, cost more due to their numismatic value.
In addition to costing more, gold coins sometimes skew the value of an investors portfolio. For example, the highly regarded American Eagle coin produced by the U.S. Mint contains 91.67% gold but costs more than plain gold bars because of its value as a collectors piece. Some investors may want collector’s items, while others may want plain gold bars, which typically are the easiest to hold long term and convert to cash.
Choosing The Best Dealer Online Or Local
A good way to start is to compare prices of the same product among a few dealers.
Getting a low premium is good, of course, but price isnt the only consideration. Heres a few other important questions to ask:
Do they offer multiple forms of payment? Bank wire, credit card, cash, personal checks, money orders/cashiers checks, and PayPal are being increasingly offered in the gold industry. And you want as many options as possible for not just current orders but future ones, too.
What are total costs, including commission, shipping, insurance, and credit card or bank wire charges?
How big is the company? You want a dealer that has strong volumes, because they will have greater flexibility, bigger selection, and be more equipped to fill a large buy or sell order.
Is the dealer pushy, or educational? Do you feel comfortable with them?
Will the dealer send you a lot of marketing materials after your purchase? You may want these to learn about special offers, but you dont want to get bombarded or your name be sold.
Do they offer a buyback policy? If theyre not willing to buy back what you purchase today, thats a strike against them. We obviously want a dealer that will still be in business years from now when youre ready to sell.
What is the return policy if you receive the wrong product? Keep in mind, however, that you cant return a correctly filled order due to buyer remorse.
There are a few other places youll see gold coins for sale, including
Is 24k Gold Expensive
The price of 24k gold is much higher than that of gold in 20k and is usually used for investment, decoration, and medical devices. A combination of 18k gold and other metals, however, makes it more popular in jewelry. Due to its purity and lack of additives, 24k gold is more expensive than 18k gold.
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Using Gold To Diversify
While golds price can be volatile, gold prices tend not to move in tandem with stock and bond prices. And, in fact, during financial calamities when investors flee the stock market, gold prices often rally.
When the S& P 500 fell around 30% between November 2008 and March 2009, the price of gold was up by about the same amount.
This makes owning some gold, alongside stocks and bonds, a way to diversify your investment portfolio, smoothing your overall returns. Just keep in mind financial advisers typically dont recommend investing more than about 10% over your overall assets in gold.
The Cheapest Place To Buy Gold
We live in a global economy, therefore the price of precious metals largely does not change from country to country.
Yes, you will see small differences due to a number of factors. But these are generally short-lived because there is always money to be made from arbitrage opportunities.
There are people who scour gold prices worldwide and exploit the difference for profit. That alone helps minimize the difference in prices across markets.
Of course you could be one of those people, but it takes considerable work. And generally you have to be on the ground, in the physical location, to take advantage of the lower premium.
The premium is the cost above spot price. The spot price is the current cost of a precious metal, based on futures markets.
If gold is worth $2,000 per ounce, for example, that is the spot price. And if a one ounce American Gold Eagle coin costs $2,100, then the premium is $100.
Finding the best gold price
Hong Kong could be the country with the cheapest gold price in the world.
You can walk into a number of banks and purchase gold coins, often with a lower premium compared to other countries.
For instance, when we checked in October 2020, the premium on a Hang Seng Bank branded one troy ounce gold bar was just $5 USD over spot price.
That is very cheap. But you generally have to walk into a physical bank branch in order to purchase gold from Hang Seng or other Hong Kong banks.
The cheapest places to buy gold coins online in 2020
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Your Definitive Guide On How To Buy Gold Jewelry
It goes without saying that one of the smartest investments in the jewelry industry is gold. Gold exudes luxury and class and signifies financial stability. Gold IS money.
Since the true value of money is backed by gold, this precious metal is in demand anywhere in the world. With inflation and unpredictable rises and falls in the markets, gold is one sturdy protection against these uncertainties.
With so much at stake, knowing how to buy gold is critical before you purchase. In this comprehensive guide, we detail everything you need to know about gold.
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Buying Physical Gold Bullion Bars & Coins
Buying gold bullion bars can be an effective method to acquire physical gold at a relatively low cost per troy-ounce. Bars are available in a variety of sizes ranging from a standard 1-troy ounce to 400-ounces. Gold ingots are generally pure gold, with an industry standard minimum fineness of .995 fine, ensuring the highest quality, purity and clarity. Gold bullion bar prices include a small premium to cover manufacturing costs.A popular alternative, gold bullion coins are easy to buy, hold, divide and trade. They are issued by government mints and are legal tender in the country in which they are produced and thus, the coins’ face value, metal purity and content are guaranteed. Most modern gold bullion coins contain exactly one-ounce, half-ounce, quarter-ounce or tenth-ounce of pure gold, while older issues contain other fractional amounts.
Best Way To Purchase Gold & Silver
Today, buying gold and silver is easier than ever since there are so many options available. However, this abundance of purchase options will often raise the question of what is the best way to buy precious metals. Our answer is that the best way will depend on the individual preferences and needs of the customer. While we are understandably partial in our opinions regarding this matter, we would like to discuss some of the best ways to purchase precious metals.
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Why Investors Like Gold
Gold has a proven track record for returns, liquidity, and low correlations, making it a highly effective diversifier, says Juan Carlos Artigas, director of investment research at the World Gold Council.
These qualities are especially important for investors:
- Returns: Gold has outperformed stocks and bonds over certain stretches, though it doesnt always beat them.
- Liquidity: If youre buying certain kinds of gold-based assets, you can readily convert them to cash.
- Low correlations: Gold often performs differently from stocks and bonds, meaning when they go up, gold may go down or vice versa.
In addition, gold offers other potential advantages:
- Diversification: Because gold is generally not highly correlated to other assets, it can help diversify portfolios, meaning the overall portfolio is less volatile.
- Defensive store of value: Investors often retreat to gold when they perceive threats to the economy, making it a defensive investment.
Those are a few of the major benefits of gold, but the investment like all investments is not without risks and drawbacks.
While gold performs well sometimes, its not always clear when to purchase it. Since gold by itself doesnt produce cash flow, its difficult to determine when its cheap. Thats not the case with stocks, where there are clearer signals based on the companys earnings.
Purpose: What Is It Used For
Pure gold is very soft and is easily damaged. If you intend to wear it every day, then go for LOW-KARAT pieces. These range around 10, 12, and 14 karats. Low-karat pieces are made of gold and other metals that make the alloy stronger.
For rings and bracelets which are exposed to friction against hard surfaces, it is best to buy 10 and 12-karat pieces.
For necklaces and earrings which are safe from knocks and bumps, 14 18 karats are suited.
HIGH-KARAT pieces that range from 18-24 karats are best for special occasions, parties and ceremonial events for two reasons:
One, your gold is rarely used and when you use them, they are handled carefully avoiding unnecessary damage. Two, you get to low-key humble-brag about your elegance and wealth. Ok, that last isnt actually a reason.
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Buying Gold Bullion Coins And Gold Bars
Civilizations have equated pure gold with gods, wealth, and immortality. For centuries, gold bullion has symbolized power and used as a storage of wealth. The fact that gold neither corrodes nor tarnishes not to mention the beauty of the precious metal made it suitable for deities and royalty in ancient civilizations. A gold standard was used as a monetary policy within and between nations but the world gold standard ended in 1976. The 1930s was the last time gold was used in minted coins designated for circulation. Historically, the value of gold was based on perceived rarity and its distinctive color.
Almost half of the new gold consumed each year is for jewelry, 40% is for investments and 10% for industrial purposes. The high malleability and conductivity of gold are characteristics that make gold used in many types of computerized devices. The precious metal is also used in tooth restoration, as an anti-inflammatory, and infrared shields.
Paper currencies have come and gone but gold remains in demand and has an inherent value. Gold bars, gold ingots, gold coins, and Investment Grade Coins are all popular ways to invest in the yellow metal.
Choose The Size And Type Of Gold Bar
Gold bars are produced in various sizes and are available at many price points. Choose from bars ranging from 1 ounce to 1 kilo, depending on your budget, personal preferences, storage capabilities, and holding strategy.
Size and price
The market value of a gold bar is almost entirely based on its weight in gold. A bars price closely follows the spot price of gold, i.e. the price at which you could buy one ounce of gold right now as opposed to some date in the future.
In general, the larger the bar is, the greater the price. What amount of your wealth would you like to safeguard with gold? With this number in mind, you can narrow your options down to only bars that fall into your price range. Note that a bars final purchase price will vary slightly from the spot price of gold depending on the current market supply and demand, as well as local, national, and global economic conditions.
Minted vs. cast
Apart from the bars size, you also have different types of bars to choose from, typically minted and cast. Minted gold bars are hand cut or punched from a large flat piece of gold and are often produced with glossy finishes and artistic designs . Minted bars, depending on their size and refiner, can be packaged in sealed assay cards that provide details about the bars authenticity and protect its condition.
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Why Buy Gold And Silver
Gold and silver arent bought to provide a return on investment.
Gold and silver could absolutely end up being a lucrative investment. But that should not be the primary reason for buying these precious metals.
We shouldnt be interested in exchanging dollars for physical gold or silver, only to exchange the metals for more dollars at some point in the future.
Gold and silver should be considered a form of savings that exists outside of the conventional system.
Just like you protect your house with home insurance and your family with life insurance, precious metals are an insurance policy to preserve your wealth in chaotic times.
Gold is an anti-currency. Its the kind of asset that you own because you dont have confidence in the paper currency issued by central bankers and spent liberally by governments.
I own gold because of all the I dont knows in todays world.
And theres certainly no shortage of I dont knows today:
Will economies ever recover from the events of 2020?
Will the US and China start a shooting war?
Will the US default on the remainder of its enormous $27+ trillion of debt?
Will the US dollar remain the worlds reserve currency for 20 more years? Ten more years?
Will unprecedented money printing and lower economic output cause inflation? Stagflation? Hyperinflation..?
I dont know.
Thats a pretty lofty bet.
Sure, the world is not coming to an end. Humanity has been through much worse.
And the Federal Reserve is leading the charge.
Physical Vs Paper Metals
Among the major decisions that a person will encounter during the initial investment process is whether to purchase actual physical metals versus paper metal, but before they can make this decision, it is important to understand what these terms mean and how each one operates. The term physical metal refers to an actual piece of precious metal bullion that has been purchased by an investor and delivered to said investor. These precious metals are restricted to the sole use of the purchasing investor, who is free to sell or trade these items as they see fit. No third party individual or establishment is allowed access to them. Although physical metals possess higher transaction costs than their paper counterparts, many investors consider them as the only true way of owning precious metals.
While paper metals offer lower transaction costs on precious metals investments, there are many risks and drawbacks to these forms of investments. In almost every instance of paper metal investing, the precious metals themselves are held or controlled by a third-party company or institution and offer investors limited accessibility. Should there ever be a financial crisis, these establishments have the right to seize your precious metals, leaving you with nothing more than a documentation of ownership. For investors seeking more security and personal control over their precious metal assets, physical metal investments are typically a better option.
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Pick The Best Gold Bar Size For You
Tip: Buy one-ounce gold bars to meet future needs as they come up. If you have a high net worth, buy both small and large bars.
One of the first decisions youll have to make when buying gold bars is what size to purchase. Gold bars come in different sizes and weights. Theyre as small as one gram , and as big as 400 ounces. Its these larger sizes that central banks, exchanges, and ETFs buy. Generally speaking, the bigger the bar, the smaller the premium. Thats because its less costly to produce a kilo gold bar than a one-ounce gold bar. But that doesnt mean you should buy the heaviest bar you can afford. Just the opposite, in fact
- Big bars do not offer the divisibility smaller ones do. When you sell a big bar, you are liquidating a sizable investment. Its more practical to sell multiple smaller bars to exchange the exact amount of gold for the exact amount of currency you need.
- Fewer potential buyers. Not many investors can afford to buy, say, a 100-ounce bar. If you have smaller sized bars, you have a greater pool of customers.
- Lower counterfeiting risk. Counterfeiters prefer big bars, because theyre worth a lot more.
- Avoids the need for an assay. The bigger the bar, the more likely it will require an assay to be sold. An assay adds an extra expense, is inconvenient, and will delay your payout.
On the other hand, premiums on smaller gold bars are higher, but they are still more affordable. And owning a little gold is better than not owning gold at all.
Investment Options For Gold Bars
It probably doesn’t come as a surprise to hear that gold is the most popular among precious metals investing. Often, investors will go into gold in an effort to diversify their portfolio and mitigate potential damage in economic recessions. Still, like every other market in the world, the gold market can fluctuate drastically. This doesn’t stop people from investing in precious metal, securing it for use in the future. Despite world governments abandoning the gold standard and moving to flat currency, the yellow metal has never fully gone out of style. It carries value all over the world, across border both cultural and physical.
Did you know you can even use your gold in conjunction with your IRA account? If you’re interested in a self-directed gold IRA, you can call one of our experts at 775-3504. And in order to keep up with just how much the value is changing day-to-day, the savvy investor needs to keep a close eye on the price of gold and other precious metals. We offer constant coverage with our live price tracker. You can even sign up for price updates and a portfolio tracker. If you’re at all curious about getting involved in investing with gold, take a look through our site and map out the best potential strategy relative to your investment goals.
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