For centuries, gold has been a popular store of wealth — especially in times of economic turmoil. However, it’s not always clear how to buy gold. Before investing, you should arrange for safe storage and familiarize yourself with the risks of purchasing this commodity.
The process of purchasing physical gold is fairly straightforward:
Find a retailer. Whether you plan to purchase online or in person, explore customer reviews on the Better Business Bureau, Trustpilot and the Ripoff Report to verify the retailer’s reputation and legitimacy.
Arrange for storage. Before you assemble an order, consider your storage options. Do you have a secure place to store your gold? If not, some retailers, like Money Metals and SD Bullion, offer direct storage options.
Choose your gold. Search for gold bars and coins by weight, purity, size and price.
Select your shipping method. Indicate your preferred shipping speed and method.
Enter your order. Enter the quantity of gold you’d like to purchase and submit your order.
Pay for the transaction. Most online gold retailers let you pay by credit and debit card, money order, wire transfer and e-check.
What kinds of gold can I buy?
There are several forms of gold available to investors ready to buy gold:
Cast bars
These bars are produced by pouring molten gold into an ingot mold and stamped with the refiner, format and bar number. Cast bars are typically cheaper to produce but the molding process is imprecise and typically yields bars with imperfections.
Minted bars
These bars are manufactured through a minting or stamping process that emphasizes clean, straight lines and allow for intricate design details. Minted bars typically cost more than cast bars and come prepackaged to protect them from damage.
Gold coins
Gold bullion coins are produced by mints around the world and typically contain between 1/10 of an ounce and 1 ounce of pure gold. These coins also have a nominal monetary value and can be accepted as legal tender in the country where they’re made. Some popular varieties include American Eagles, Maple Leafs, Chinese Pandas and Mexican Libertads.
Compare bullion dealers
Explore bullion dealers by product selection, fees and storage options to find the dealer that fits your budget and investment goals.
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There are numerous pricing factors to consider and compare before selecting your gold.
Spot price. This is the industry standard that represents the up-to-date rate for one ounce of gold. The spot price of gold fluctuates constantly and is determined by the forward month’s futures contract with the most volume.
Markup. Gold markups help retailers cover costs and can range from 2% to 30% on top of the gold’s spot price. This cost may be expressed as a commission or service fee by the retailer.
Premium. Some gold has additional collector’s value, and some issuers of gold — like the US Mint — command a higher premium than others.
Market factors. The price of gold can be affected by a variety of market factors, including economic conditions, geopolitical events and more.
How much is gold worth now?
There are multiple ways to track the price of gold, including the per-ounce price of bullion, the price of various gold ETFs and the price of specific gold stocks. The graph below tracks the spot price of gold, which is the current marketplace price per ounce of gold.
Keep in mind that specific bullion dealers will charge slightly different prices because they make a profit on the markup, which means that you may pay more than the spot price to buy physical gold from a dealer.
How to safely store gold
Now that you know how to buy gold, you’ll need a safe place to store it. There are several options to consider, including:
Bullion dealers. Many gold dealers offer direct storage options where you can keep your gold bars or coins for a fee. Explore any storage options available through your retailer when you make your purchase.
Safety deposit boxes. Rent a safety deposit box at a bank to securely store your gold bullion.
Secure vault storage. For high-level security, you may want to research vault storage companies near you and the storage options they offer.
At home. You can also store your gold at home. This may not be as secure as some third-party storage options, so consider installing a home safe. You’ll also need to update your homeowner’s insurance to make sure your policy covers your precious metal.
Why is gold a “safe haven”?
There are several reasons investors view gold as a safe haven:
Gold is a physical asset.
It’s not easily created or destroyed.
It doesn’t change — gold is resistant to oxidation and will look the same hundreds of years from now.
It has cultural and historical value — gold predates modern currency and has always been seen as beautiful and special.
Governments have turned to gold in times of financial crisis, which in itself adds to gold’s stability.
What is a safe haven?
A safe haven investment is typically stable in times of market volatility. A safe haven is also useful for investors looking to diversify their portfolio, decreasing exposure to riskier assets or investments.
Other ways to invest in gold
Outside purchasing physical gold, you can also buy gold by purchasing gold stocks and ETFs.
Gold stocks
Gold stocks are stocks from gold mining companies. You can find some of the largest firms listed on the S&P 500, including Newmont Mining (NEM) and Freeport McMoRan (FCX). Through investing in mining stocks, you’re directly linking your capital to the success of these companies and the changing value and price of gold.
Gold stocks offer the added benefit of potential dividends but also carry additional risks, like geopolitical shifts that impact mining output.
Gold ETFs
Gold ETFs are another option worth considering. ETFs give access to a wide array of assets through a single investment, allowing investors to minimize risk while taking advantage of the performance and popularity of a particular sector — in this case, gold.
Gold miners are already leveraged to the price of gold because their profit margins can be multiplied with ordinary moves in the spot price of gold, but there are also several leveraged ETFs that aim to double or triple the returns of gold miners through the use of options and other derivatives.
But be careful with leveraged ETFs — they are designed for short-term trades, not long-term buying and holding. To achieve their goals, these leveraged ETFs have to be rebalanced every day, so volatile periods of market activity can erode the basis of your investment.
Bottom line
If you’re searching for ways to protect your wealth or diversify your investments, gold may be a practical addition to your portfolio. But do your research to make sure you understand how to buy gold, the costs of storage and security, as well as the various investment risks associated with this commodity.
Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.
Frequently asked questions
The spot price of gold changes constantly. Most online gold retailers display live pricing on their websites, but you can also check the spot price of gold by performing a quick Google search.
Gold is a naturally occurring mineral within the Earth’s core that has been released to the crust through molten lava over the course of history. To mine it, companies have to extract the gold from the other rock and minerals it cooled with.
The World Gold Council estimates that about 190,000 tonnes of gold has been mined throughout history, with the current pace of about 2,500 to 3,000 tonnes mined each year, and another 54,000 tonnes identified as unmined reserves.
Gold bars come in different sizes, but the most common ones are 1-ounce and 10-ounce bars. After reaching a historic high of $2,000 per ounce in 2011, gold fluctuated around $1,300 per ounce from 2016 to 2019, when it rallied up to $1,500 and higher.
Possibly, but it depends on which dealer you’re buying from. And if a dealer does accept credit cards, be aware that you may face higher fees if you purchase gold with plastic.
Charlie Barton is a publisher at Finder. He specialises in banking and investments products, including banking apps, current accounts, share-dealing platforms and stocks and shares ISAs. Charlie has a first-class degree from the London School of Economics, and in his spare time enjoys long walks on the beach.
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