How To Buy Gold – Bullion Bars and Coins

November 1, 2008 | By | Reply More

In these days of uncertainty, owning physical gold in the shape of bullion bars and coins and storing them at home, in a safe deposit box or secure vault gives many investors the confidence that they may lack in paper gold virtual promissory notes such as shares in gold investment or mutual funds.

Gold ETFs arguably also come into this category.

Gold bullion bars are available in various weights ranging from one troy ounce upwards as well as in metric sizes. For example a one kilo bar weighs 32.15 ounces.

Gold bullion bars will almost always sell at a smaller premium than the more popular coins, and the larger the bar the smaller the percentage mark up.

The most popular size for the average investor buying less than one hundred ounces of bullion is the one ounce bar; they are easy to store and readily saleable when cash is needed or profits taken.

Larger investors may opt for ten ounce bars and in India and Asia the kilo bar is popular. Larger bars are available up to one hundred ounces but none have been minted in the US since the nineteen eighties.

Gold bars and coins come in different degrees of purity. Look for .9999 fine, older bars available on the secondary market may be .9995 fine or even .995 fine. If buying in the secondary market be aware of the difference over the spot price plus premium if the bar or coin is not .9999 fine.

Newly minted bars will be well packaged and protected, older bars may have damaged packaging or none at all and may be suffering from minor damage such as fine scratches so be aware!

There are around fifty accredited manufacturers of gold bars worldwide.

Among the most well known are

  • Johnson Matthey
  • PAMP (Produits Artistiques de Metaux Precieux) based in Switzerland
  • Midwest Refineries in the U.S.

To avoid the many pitfalls of buying gold bars in the traditional manner, it is now easier to buy and trade physical gold, with access to up-to-date prices, charts and commentary on line.

Whilst we don’t guarantee this company we have sufficient confidence to commit our own funds to them.

Be sure to carry out thorough checks on any on line physical gold dealer as their authenticity is difficult to monitor over the internet, proceed with great caution before committing any funds.

Gold coins fall into two principal categories. Newly minted coins together with coins that are in effect bullion coins, the Krugerand is an example, and collectors gold coins.

There are numerous gold coins minted and issued by governments whose value is based upon their gold content, most usually one ounce or half an ounce in weight.

Purchasers must expect to pay a premium or mark up over and above the spot price of the coins’ gold content. There have been rare occasions when a direct application for a newly minted issue has not involved a premium but don’t hold your breath waiting for the next time.

The advantages of investing in gold coins are ease of storage and liquidity, although be prepared for the dealers profit margin when selling.

Collectors gold coins are a highly specialised market and is best left to the specialists or keen hobbyists. The premium is dependent upon the rarity of the coin and may even be double or more the value of the coins’ gold content.

When buying or selling gold bars or coins it is important to trade through reputable and reliable dealers. A list of authorised dealers can be obtained from the U.S. Mint.

Other countries have similar lists and in most cases these can be accessed on line.

For those who like the idea of building up an investment in gold coins, a good move is to establish a relationship with an established authorised dealer. As they are specialists in gold coin and bullion bars and rely on the goodwill of their customers they are in a position to give good advice to beginners in this investment arena.

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Category: How To Buy Gold

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