When I am looking to add an investment to protect against inflation or deflation, gold is the first thing that comes to mind. This can include purchasing actual gold bars or coins, also referred to as rounds. Contrary to common knowledge, bullion is not a term solely reserved for antique gold coinage. Instead, it actually refers to any gold investment that exists as bars or rounds.
Choosing how to buy gold bullion involves the same decision points as determining how to invest in any other tangible item. If you have ever wanted to know how to buy a gold bar, these 7 simple tips will help you get on your way. For those looking for a complete guide, please check out this awesome in depth resource we put together with you in mind.
1. Choose Your Amount
First things first, when purchasing gold as a personal investment, there are a few standard weights that may be available, and normally expressed in ounces or grams. For example, you may be able to buy a 10 oz. gold bar, or a 1 oz. piece of gold bullion, also referred to as rounds. The higher the weight, the more gold that is contained in the piece.
2. Check Current Prices
The current price of gold is widely available through stock exchanges and sellers, normally presented based on the current price per ounce, also known as the spot price. Just as with other commodities, the price of gold shift throughout the trading day, sometimes dramatically.
I advise taking the time to review the price changes that have occurred over a minimum of the past few months, as well as make some year-over-year comparisons. Most investments will see regular fluctuations, and identifying the potential cause of those fluctuations through careful research can help you determine what price at which you are open to making the purchase.
3. Identify the Types of Sellers
Since the current price of gold is accessible, most sellers will offer similar pricing, meaning price may not be the biggest determination point. Instead, I recommend beginning your analysis by determining if the companies you are considering are direct sellers or if they are functioning as middlemen for another seller. Those functioning as go-betweens may have higher associated fees than those who sell directly.
You can find contact information for various sellers through basic web searches. Many reputable sellers have their own websites, providing options for contact over-the-phone, through email, or in-person, when available.
4. Consider Domestic vs. International Shipping
Next, I check and see where the seller is located, as this will have a direct impact on the costs of shipping. Internationally based shipments may have higher associated costs than domestic shipments. Additionally, the total shipping time may be significantly higher when coming from an international source.
5. Use Research to Make a Final Selection
Always take the time to research the companies to make sure they are legitimate. For example, companies based in the United States may be graded by the Better Business Bureau (BBB). I also check for any reports of misconduct filed with the United State Securities and Exchange Commission (SEC) as an additional precaution.
6. Ship With Care
Whether you plan to store the gold on your personal property or at a specialized storage facility, the final decisions regarding how to buy the gold bullion should focus on the shipping options. I highly recommend getting the shipment insured, even if it is at an additional expense. Make sure a tracking mechanism is included, and, if you are shipping directly to your chosen secure storage facility, that the destination is aware of its pending arrival.
7. Storing the Gold Bars Safely
After you have decided how to buy a gold bar as an investment, you will need to choose how to store your investment. Most commonly, this involves a choice between storing on your own property, such as in your home, or in a separate secured location, such as a safe deposit box at a bank or a facility specifically designed to store precious metals for customers.
Regardless of your preference, I recommend storing the gold bullion in a location that allows you the option to regularly inspect the pieces visually. The frequency of your checks may help determine which range of options seems reasonable.
When choosing a company or bank, research both the company as a whole and the specific location you are considering. If the company or bank is fairly local, go to the location and observe it personally to determine if it will suit your needs.
If you prefer to store the gold on your own property, I recommend purchasing a safe that can be installed discretely and securely within your home. This will provide an additional level of security should someone break in to your property.
Summing It All Up
By following all the tips above, you are well on your way to deciding how to invest in gold bars as part of your personal portfolio. I always recommend taking more time to research your buying options, especially if you find yourself having any doubts. Additionally, I always start with a smaller purchase when working with a new seller. As you build a relationship with a seller, the process may become more natural and you may feel more confident making larger purchases, but you should still involve all of the necessary research to make sure nothing has changed in regards to the business’s reputation.