4 ways to buy gold

Since the beginning of recorded history, gold has been a universal symbol of wealth. Because of its beauty and scarcity, ancient civilizations regarded precious metals as a manifestation of status and power. Decorations, jewelry, and early currencies were all made of gold.

For thousands of years, people’s fascination with gold has hardly abated. Although most monetary systems are no longer tied to the gold standard, this metal is still seen as an insurance against fiat currencies that rely on faith to maintain their relative value. Gold has always maintained its intrinsic value because, unlike currency, its supply is limited and cannot be artificially increased.

The attractiveness of gold makes it an ideal choice for those seeking to diversify and diversify their risks. There are many ways to buy gold, both for decoration and for investment. For many people, it is also a tool to hedge against economic turmoil, wars, inflation and global uncertainty.

Key points

  • Investing in gold can be a good addition to your investment portfolio, including accumulating gold coins, bars and jewelry.
  • In some places, vending machines can even be used to distribute gold in exchange for cash.
  • You can also obtain gold investment indirectly through gold mining stocks or mutual funds and ETFs that track gold prices.

Gold as an investment

Before buying gold, it is important to understand some of the factors that make gold unique:

  • Newly minted coins usually contain 90% to 99% gold.
  • Jewelry is usually 14 carats (58.3%) in the United States or 18 carats (75%) internationally, but other carat values ​​can also be found, up to a pure 24 carats (99.99%)
  • Unless you own stocks or mutual funds that pay dividends, gold will not provide a source of income.
  • Owning gold stocks does not give you the right to own metals.
  • You may incur the cost of storing physical gold.
  • Although the current supply is limited, as the price rises, more mining is economically feasible, which may increase the supply.
  • The demand has nothing to do with the real demand for the metal, because most of the metal is not used for any commercial purpose except for making jewelry.
  • Gold holdings are highly concentrated in the hands of a limited number of governments and central banks. As these institutions buy and sell, gold will face extreme price fluctuations.

coin

Several countries are currently minting uncirculated gold coins. Although they are both legal tender, their meltdown value far exceeds their face value. The market value of many numismatic (collectible) coins is even higher. Based on the rarity and demand for the coins they buy, collectors are attracted by the potential to increase in value.

Newly minted coins are easy to buy, and their purity is guaranteed by the government mint that produces them. Some popular choices are American Eagle, Canadian Maple Leaf, South African Krugerlang, Vienna Philharmonic Orchestra, Mexican Gold 50 Pesos, British Monarch, Australian Kangaroo and American Mint 24K Gold Buffalo. Some of these coins are available in multiple sizes to suit large and small investors. For example, the casting weight of the American Eagle ranges from 1/10 ounce to 1 ounce.

The Liberty coin minted before 1933 was the only coin produced by all seven American mints in operation at the time. The minting of these coins was stopped that year; in response to the hoarding of gold during the Great Depression, President Franklin Roosevelt signed an executive order requiring Americans to hold gold and only exempt coins with recognized numismatic value.

Many American investors prefer old coins because they are worried about another government confiscation of gold and believe that collecting coins may be exempted again. The five-dollar half eagle and the ten-dollar eagle are very popular coins and can be bought from coin dealers. The $20 Double Eagle is probably the most well-known and most desirable of the early gold coins. The most notable of these is Saint-Gauden, commissioned by President Theodore Roosevelt and designed by the famous sculptor Augustus Saint-Gauden.Old coins minted in other countries (including the United Kingdom, South Africa, China, Spain, and Mexico) are also very attractive collections.

Gold bars or gold bars

Although many people think that gold bars are the big gold bars of Fort Knox, gold bars actually refer to the weight and fineness of gold. It can be a bar, a circle like a coin, or any other shape that represents a tradable and practical size and form. The price of gold and silver usually includes the cost of the metal, plus the costs associated with refining and transportation, and the dealer’s premium.

These rods are available in a variety of weights, starting from 1 gram. Heavy gold bars are best for large investors because they can be effectively stored in insurance facilities that specialize in precious metals. When you buy heavier rods, you can also save additional costs. The disadvantage is that large gold bars are more difficult to sell and cost more, and may be difficult to use as part of a barter transaction.

The bars are produced by several government mints and private companies such as JM Bullion, Sunshine Minting, Valcambi Suisse, All Engelhard and Produits-Artistiques de Métaux-Précieux (PAMP).

Gold stocks and exchange-traded funds (ETF)

The main advantage of stocks and ETFs is that you don’t have to store metals and have the potential to earn dividends. In addition to individual mining stocks, there are also mutual funds that partially or fully invest in mining companies. These can provide a diversification of other precious metals such as platinum, palladium and silver. You can also purchase options on gold futures contracts at a predetermined strike price.

ETF holds gold bars on your behalf. The symbol of SPDR Gold Shares ETF is GLD. ETFs are traded within the day like stocks and benefit from relatively low expense ratios.

The price of gold stocks is not necessarily the same as the price of gold bars, because the success or failure of a mining company depends on its personal operating performance. If the company you bought is unsuccessful, you don’t have the safety of actually owning the metal.

Jewelry

Jewelry allows gold investors to experience the fun of wearing. Gold is often used in combination with other precious stones and metals to enhance the overall value and appearance of jewelry. Works are usually passed on to the next generation as heirlooms, adding emotional value beyond the works themselves.

If strictly speaking, jewelry is not the best choice for investment, because the price usually far exceeds the collapse value. This is due to the craftsmanship involved and the retail price increase. Be sure to determine the purity of the gold before buying jewelry, so that you won’t pay for 18 carats when you get 14 carats. Most homeowners insurances cover jewelry, which is an advantage if your jewelry is lost or stolen, but you might consider buying jewelry floats to supplement your insurance coverage.

Bottom line

Gold can be purchased from private dealers, online dealers, jewelry stores, coin shops, private mints, vending machines, and government mints. It is best to buy from a reputable source to ensure that you are buying exactly what it represents.

Although as the saying goes, “Gold is never worth zero”, but every investment has risks. Do your own research and be prepared for price fluctuations in the commodity market. Unless you are an experienced trader, gold should be regarded as a long-term investment and safe haven in the future.

Increasing demand and limited supply have caused prices to rise. However, with the exception of some industrial uses, such as electronic components, most gold sales are driven by jewelry production and investment demand. For most people, gold should be seen as a way to achieve portfolio diversification and balance investment risks in stocks and other currencies.

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