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Gold Bullion: Ultimate Buyers Guide for New Investors

Donny Gamble
February 24, 2022
Gold Bullion
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Precious metals have been an investment since the dawn of human society, and gold and silver are among the most traded of those metals throughout history. 

We hold value in gold, and globally, that means something really special.  Gold is used as a failsafe currency, but it’s also become a way to invest in your IRA, and secure your wealth against the future.

In this guide, we’re going to answer your burning questions surrounding gold, and help guide you to the right place to actually buy and hold gold the smart way.

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Quick Facts
Miniumum Purchase: $1,500
Fees: $150/yr
Promotion: Receive up to $1,500 in free silver (with a qualifying purchase)

Why Buy Gold in the First Place?

Gold is a respected asset all around the world, but that’s not the reason that people buy it. In fact, there are three main reasons anyone would want to buy gold:

  • IRA Investments: This is the most common reason. An IRA is important for your retirement, and you can use the funds within the container of your IRA to buy assets. One of those assets is gold, which accrues value over time (currently in August of 2022, we’re seeing a nine-month high for gold). This allows you to protect your money against inflation while increasing your wealth over time.
  • Protecting Against Inflation: Gold accrues value, but cash doesn’t. Historically, we lose around 2.0 - 2.5% of our cash’s value every single year due to inflation. Gold is likely to gain more than this over time, so instead of wasting time in a 0.05% interest savings account, gold is a better choice.
  • SHTF Reasons: If the dollar crashes, some people want to have gold to sell and trade for necessities. This isn’t the most common reason, because in the event of catastrophe, many people aren’t going to be looking to receive gold for something when they could use it themselves or wait for the market to stabilize again.

On Personal Income, we discuss the former most option: buying gold to increase the value of, and diversify your IRA portfolio. Gold is a powerful asset if you know how to use it correctly.

Is Gold Really Future Proof?

Gold will never become a worthless commodity. Even if it were to fall out of favor for investments (which, historically, would be the first time that it was ever devalued to the point of being worthless), gold is still applicable in an ever-growing field: technology and manufacturing.

In fact, gold is used in circuitry in electronics that you might be reading this article on. Gold has excellent value and will likely never be worth nothing, but that doesn’t mean it can’t take a hit in investment prices.

Currently, some predictions (and it’s important to keep in mind that these are predictions because nobody can accurately time the market) that say gold will devalue to around $1,400 an ounce in 2030.

Will it? Maybe. Even if it does, it will still be worth more than it was in 2009. Gold is valuable, and even when new gold enters circulation, its value will still climb through losses like jewelry production, electronic production, and more.

3 Things to Watch Out for When Buying Gold Bullion

Before you start buying gold, there’s a few things you need to know about the gold-buying process, and whether or not it should be a major player in your investment portfolio.

  • Never Buy With Credit: If you buy gold with credit, which is possible, there’s a good chance that the following will happen: your debt is called upon, you can’t afford not to pay it, you don’t have the liquid cash to do it. You reach into your SDIRA, liquidate the gold, and remove the cash. You lose a lot in liquidation (even with good buyback programs from gold IRA companies), and you loose about 10% as an early withdrawal penalty. Only buy with savings that you don’t see yourself needing anytime soon.
  • Read the Fine Print: Buy gold through a gold dealer/broker, but be sure to read the fine print of the contracts you sign. In some instances, these brokers can hedge your gold if they need to. You need to be 100% certain that you own the gold outright and that they can’t toy with your assets.
  • Do Not Buy Direct-to-Home Gold: Once the gold is actually in your hands, it’s not available to go into an IRA, and you’re going to have one hell of a time selling it. When anyone buys gold, they want it in mint conditions, and preferably from an actual mint. Make sure it’s handled so it goes directly into your SDIRA.

Should You Buy Gold Bullion?

Gold bullion is a great way to diversify your SDIRA portfolio. It isn’t the only asset you should invest in, but then again, there’s no asset on Earth that you should put 100% of your investment money into.

Gold should make up 5% of your SDIRA and overall investments for a conservative portion, and up to 15% for more gold-centric options.

Even Warren Buffet at one point in time admitted to owning 5% of his at-the-time investments in gold. It may not be as flashy as crypto, but gold is here to stay. That, we can be pretty sure of.

Gold Bullion FAQ's

What is the best way to buy gold bullion?

Not direct. The only way you should buy gold bullion is through a credible gold dealer. Even so, it should be purchased within the container of your self-directed individual retirement account, otherwise the gold won’t accrue value the same way.

It won’t work towards your retirement. Buy gold through a gold dealer and deposit it directly into your SDIRA, otherwise you’re doing it wrong.

Do banks buy gold bars?

You can’t walk into a bank and sell a gold bar over the counter. Some banks are still known to sell gold to their customers, however, this is usually in the form of coins and not bullion. 

Even so, this practice is becoming exceedingly rare. Gold dealers that work directly with mints are now the ones selling gold, and banks have rapidly walked back this business product.

At the end of the day, it doesn’t make sense for them to hold onto it; they want capital. An IRA firm may have a buyback program to help you liquidate your gold in the event that you want to invest in another asset within your SDIRA, but with a cost attached to it.

What is 99.995% finesse?

This refers to the purity rating of gold. If a gold bar is not 99.995% finesse, it is not recognized by the IRS as IRA-eligible gold. 

Instead, it’s a collectible, and how upset would you be to spend all that money on a collectible brick? Finesse matters to maintain regulation of IRA assets, but also to keep everyone on the same page.

It wouldn’t be fair if someone else had a lower purity rating and it counted as the same amount of money in an IRA; it would cause problems. Pure gold is the only way to go.

Is it better to buy gold coins or bars?

Gold bars. Coins do not have to meet the same finesse standards, which is why they often can’t be placed in most SDIRAs as gold. With a coin, the finesse (purity rating) only has to meet about 91%, marking it as a collectible by the IRS.

It can still be placed in a SDIRA, but not as gold. Instead it will be listed as a collectible, which is not guaranteed to gain value over time.

Coins can lose value if the figures on the coin or the symbols lose societal value, such as the figure or symbol becoming demonized or losing popularity. Coins are collectors items and not keen for investing in.

American Hartford Gold

American Hartford is proud to help individuals and families protect their wealth by diversifying with precious metals.

About the author 

Donny Gamble

I’m Donny. I’m a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.

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