By Mashum Mollah
The thought of investing in gold appeals to nearly everyone, especially because of its steady rise in value over the years. That is why more and more investors are investing in gold traded stocks, bonds, mutual funds, and ETFs. However, owning gold on paper doesn’t translate into physical gold, so, other investors that enjoy the financial security that comes with owning it physically purchase and store gold bars.
It’s no news that since its discovery, this precious metal has endeared itself to the heart of many people. Its supply is limited and that may be one of the reasons why it is so valuable. Since recorded history, metal has symbolized wealth and power and has been used as a means of exchange.
Some ancient civilizations made gold coins that were stamped with the face of their rulers. Like the way we use paper currency, these coins were used for commercial activities like buying and exchange of goods and services. You may find it interesting to know that the ancient Egyptians were the first to make jewelry from metal.
Today, after thousands of years, this precious metal remains valuable and very much sought after because of its scarce supply. As a matter of fact, this mineral backed the United States monetary unit from 1792 till 1971 when the bimetallic standard of 1792 was abandoned. However, the fact that it no longer directly backs any fiat currency doesn’t mean that its value has depreciated in any way. Click here to learn more about the bimetallic standard.
The mineral is still relevant and the fact that it is being used as a reserve currency by most governments proves this. Many countries use it to stabilize currency value and to settle international trade.
Buying Gold Bars
Gold can be purchased in coins, bars, or for physical; however, we’ll only be discussing bars. The general name for both of these forms is known as bullion. Unlike what many believe, bars can be purchased rather easily. There are many precious metal dealers such as banks and other brokerage institutions who have physical locations.
They can also be purchased online from the convenience of your home as there are also several reputable retail websites online. It is worth mentioning that online gold retailers give great discounts to customers who purchase larger quantities. Some give discounts to customers who make purchases using wire transfers, while others do so for those who buy with a credit card. So, ensure you choose the more cost-effective payment option.
The asset can be purchased by simply selecting which type you prefer by weight, price, quantity. You should note that there are different gold bars available on the market. You can check out Credit Suisse gold to see an example of what is available.
Once you receive the asset, leave them wrapped in the packaging in which they came in to avoid getting them scratched. Also, you should consider investing in a high-quality safe to keep the asset secured. Of course, if you’d prefer storing them someplace else, you can always do so in a safety deposit box at a bank.
Gold bars are also auctioned on eBay and you can bid on them there. However, extra caution must be taken to avoid getting ripped off. Ensure you double-check the seller’s rating and go over the feedback and reviews previous buyers have left.
For quick purchases, there are gold-to-go vending machines that dispense bars like regular ATMs dispense cash. These vending machines are quite popular in Cities like Dubai and Las Vegas. If you’ll be buying bars from these machines, you should be aware that they often sell above the spot market price and the price of many other retailers.
Consider Reading: Finding the Best Gold Company for Smart Investments
Buy Only Pure Gold
The purity of gold bullion used for investment should not be less than 99.5%. In case you’re wondering why its purity isn’t 100%, it is because for smelting to be possible, an alloy, most commonly silver or copper must be added. When purchasing bullion, consumers should only buy bars that have their weight, purity, and the manufacturer’s name clearly visible on their faces.
Visit business insider to learn more about the most popular gold mints.
Buy Bars in Smaller Sizes
Since you’re buying bars as an investment, you should buy them in sizes that can be easily liquidated whenever the need arises. For instance, if the market price of the metal is $1,800 per ounce and as an investor, you have budgeted $18,000 for the purchase of the commodity. You’ll find it easier to sell the asset if you bought 10 one-ounce bars instead of one 10-ounce bar.
This is because most dealers would rather collect smaller bars since they won’t cost as much to transport and store.
Final Thoughts
It is important that you take your time when shopping for investment gold bullion to buy. Ensure you’re fully aware of the spot price when browsing different retail websites or when visiting a local dealer. The price of the asset can easily be assessed online by running a simple search.
While the metal is easy to buy, you’ll find that prices vary from seller to seller since individual sellers usually include their own profit margins. Other factors like payment processing fees, shipping and handling, and authentication certificates may also influence the prices you get from retail websites and dealers. Carefully comparing prices before making a purchase may help you save some money.
Taking your time to research a dealer’s reputation is also a good idea to avoid getting ripped off. To be on the safe side, you could ask your bank for recommendations.
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