How And Where To Buy Gold: A Complete 2021 Guide

Sharline Shaw

Gold is essentially one of the best investment instruments that you can add to your portfolio if you want to diversify it. Time and time again, investors have chosen precious metals, particularly gold, for long-term investments. While its relatively volatile nature in the markets doesn’t make it for everyone, investing in gold is still a viable option with the proper guidance and knowledge.

How To Invest in Gold

There are two ways for you to invest in gold:

  • Buy physical gold in the form of bars, coins, and jewelry
  • Exchange-traded funds (ETFs), mutual funds, futures, or options

Here’s an in-depth look at each option:

Buying Physical Gold

There are many commodities available to invest in, but gold is more accessible, so any level of investor can access it. You can easily buy gold bullions from any precious metal dealer online or offline. Some banks offer gold as well. Gold is still a valuable asset and, at times, may dip when the dollar rises. But it’s that volatility that also makes it a good part of your portfolio.

Physical gold, such as bullion bars, ranges from a quarter ounce to 400 ounces in weight. But investors prefer small sizes in equally smaller denominations and the coins because they are easily attainable. If you’re a beginner, you may come across numismatic coins which are not pure gold but are valued depending on the gold content. They also have a premium price tag.

Investors that want to keep gold coins for their liquidity should know that not all gold coins will sell. If you want your assets to be easily converted to cash, you should go for an American Eagle, American Gold Buffalo, Austrian Philharmonic, Australian Kangaroo, South African Krugerrand, and Canadian Maple Leaf.

Bullion bars and coins must be kept in a safe place. While it’s tempting to hide them in your home, it’s likely to be stolen away. It’s best to have a vault storage service keep them even if you have to pay a fee. The service will know how to guard your collection until you need them.

A) Investing In Bullion Bars

How To Buy Gold Bars Online

Step 1:

Choose the type and size of the gold bar you want. You’d likely be choosing between minted and cast.

Minted bullion bars are either manually or automatically punched from a larger flat gold piece. They are manufactured with a gold finish and stamped with intricate designs onto the surface.

Casted gold lacks the designs that minted ones have. Gold is molten and poured in containers that give them varying appearances. It’s the oldest production method.

When choosing the size and price, you can afford, remember that the value of bullion bars is based on their weight in gold. Typically, the larger the bar, the more expensive it is. The bullion bar’s final price will vary, and they may fall a bit off from the spot market price. Factors such as the global economy may also play a part.

Step 2:

Choosing the kind of gold bar in terms of the producer, weight, and purity will also serve you well. Bullion bars are easier to sell if they are branded with a well-known producer. Apart from online shops, you can also procure them from both government and private minting establishments.

In terms of weight and purity, they are stamped onto the bar itself. Some producers will include them into the hallmark, and some won’t. You’d also want to see the assay card or the certification that contains the producer, serial number, and the purity of the bar.

Step 3:

You may be tempted to store your bars at home, and that will depend on your goals. If you want bullion bars as a safety net in case you’re short on cash, you can choose to keep them at home or select banks to hide them in a safety deposit box. Go for storage services to protect them if you can pay for necessary fees.

Some reputable gold dealers online will also offer gold IRA accounts where you can store physical gold assets for your retirement. These companies provide such services similar to the Oxford Gold Group Gold IRA. You can fund your IRA account through rollovers and direct transfers. The company can offer you such convenience and security not just with gold alone but also with other types of precious metals.

B) Investing In Coins

Where To Buy Gold Coins

You can buy gold coins at local shops and online stores. Both options come with pros and cons.

You’d want to buy from a local store because once you pay for it, you can immediately take it home. Plus, you don’t have to pay delivery fees. The downside is that you’re likely to sell them for less than what you paid because of the hefty premiums.

On the other hand, online shops have greater inventory, lower overhead costs, and you don’t have to talk to a salesperson. The drawbacks? If you’re to pay with a credit card, it may likely come with fees, it may take some time to deliver, and all while waiting, you will have to have faith that the shop will give you what you ordered.

Gold coins will also be sold on online public markets and trade shows. But you need to be aware that public markets online will be risky. On the other hand, Coin shows are more for collectors and not gold coins that you’d want to sell.

Some banks may offer gold coins depending on the location. Switzerland is among the countries that have banks providing gold to the masses.

C) Gold Jewelry as An Investment

Jewelry is no longer just a fashion statement anymore. When they’re made of authentic precious metals and gems, they are sure to become a safety deposit box content. But beginner investors might wonder if they do make a sound investment of money.

Gold is gold, and jewelry is also valued depending on their precious metal content, such as coins. The best thing about gold is its capacity to retain market value despite the fluctuating market. If most of your accessories are made of fine gold, you’ll likely make bank. Gold jewelry is another way of adding to your portfolio, albeit not the most beneficial as it cannot generate passive income.

Still, think of it like storing coins for the rainy day because gold jewelry is easy to liquidate as they are pawnable. Eastern investors collect gold jewelry for the same reason and take pains to store what they can. Solid gold jewelry is somewhat helpful during emergency cases. Keep in mind that those with a solid gold base metal will do you good.

In any form, gold had always been a hedge against inflation because it’s money in itself. Transactions made with gold are also untraceable and have acceptable value if you don’t have cash on hand. Gold jewelry is also in demand, and there is a market for it all over the globe.

As an accessory, they still take some of the most valuable pieces because they are resistant to tarnishing and can retain their beautiful color for a long time. The gold jewelry you wear is also a sign of your social status, just like it had always been since ancient times. But keep in mind that although they might sell, it’s unlikely to get a higher return than what you partially paid for it.

Where To Buy Gold Jewelry

Buying gold jewelry is very easy because there are jewelry stores all around. But if you want the high-end ones, go for the known brands of fine gold jewelry.

You can also buy them online, and there are advantages compared to brick-and-mortar shops. There is always a large inventory of various types of solid gold jewelry. There’s yellow gold, rose gold, white gold, and more.

You’re also likely to find cheaper gold jewelry, not because they are lower in quality but because online shops retain lower overhead costs. Most physical shops have to maintain their locations and pay for utility services, whereas online stores don’t have to. The savings are passed down to the customers at this point.

But how safe is it really to buy something you cannot touch or see in real life? Today’s jewelers are aware of this issue, so they may include videos or have you view the product through an HD camera. They will present a certification stating the authenticity of the jewelry you want.

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Buying Gold as Investment Instruments

A) Investing In Gold ETFs

ETFs are one of the popular ways of investing in gold. You can also invest in the precious metal from physical gold through exchange-traded funds (ETFs). You can still invest in gold without direct purchase, reselling, or storing it as an ETF investor.

ETFs get their market value in two ways: companies that invest in gold-mining companies and other companies that monitor the spot market price of gold. There are also different ETFs wherein the issuing company takes part in stocks from companies dealing gold.

Another option is purchasing gold assets and then storing them. Investors are also tracking the rising and falling of the gold’s market value after buying shares in the fund.

How To Buy Gold ETFs

Step 1:

Search for a reputable brokerage website and open an account.

Step 2:

Before purchasing ETFs, check the five-year returns because if the ETFs bases on the spot value, the ROI should line up with the shifting of the gold price. You must also be aware of the annual fees that will be deducted from the fund. Be sure to look for lowers costs.

Step 3:

Avoid buying leveraged ETFs because they are managed on loaned money to use on betting where the price would shift. Exchange-traded notes or ETNs are also not beneficial instruments because you don’t own the gold and are likely to fall victim to credit fault.

These investment methods are more suitable for experienced investors. They are not for those who are saving for their retirement.

B) Investing In Gold Mutual Funds

Gold mutual funds are similar to ETFs regarding availability for investment without owning the physical form of gold. But the difference is that gold funds invest in ETFs units. The pricing of gold funds is disclosed at the closing of trading hours while ETFs prices are featured in real-time. Both ETFs and gold fund units are available at the stock exchange, but you don’t need a dematerialization account for the latter.

C) Investing In Gold Futures

Gold futures options are for those investors who don’t want to risk considerable capital. Gold futures offer investors the right to buy a gold asset at a specific price for a limited period. The option allows the investor to guess if the price of gold is going up or down. Through gold futures, you only risk the premium you paid to get the chance for a contract.

How And Where to Buy Gold Futures

You can get a contract to enter gold futures at the Chicago Mercantile Exchange if you are in the United States. A futures broker will help you with put and call options for a price. You can also choose options on the SPDR Gold shares ETF through a regular account with approval for trading.

D) Gold Mining Companies

You can invest in gold mining stocks. Gold mining companies will offer stock certificates if they can’t present physical gold. Keep in mind, though, that bullion spot prices don’t apply to gold stocks. It’s because the success or failure of the gold stocks depends on the company’s performance.

In a way, the value is depending on the company’s status and not on the actual gold market. The mining company you should put your faith in must be generating a steady income. There is no chance for you to own any of the gold if the company is unsuccessful.

In Conclusion

There are many ways to invest or buy gold from different options. There are choices both for beginner investors and for those who are savvy ones. It will also depend on the available funds and risk appetite.

But remember only to keep gold as a fraction of your portfolio. Its volatility is not for everyone. Nonetheless, with the proper education and guides like this article, you can grow your knowledge and try your hand on gold investing step by step.

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Article by:

Sharline Shaw

Hey I'm Sharline, the founder of Leeline Sourcing. With 10 years of experience in the field of sourcing in China, we help 2000+ clients import from China,Alibaba,1688 to Amazon FBA or shopify. If you have any questions about sourcing , pls feel free to contact us.

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