Ready to buy Gold
Whether you’re new to gold investment or you’re investigating asset performance over the past 40 years,
you will find the information that you need in the Bullion articles listed below.
They cover a wide range of topics, including the basics of buying gold to guides on precious metals’ investment.
You can also learn about the different ways that you can purchase precious metals, and their different forms.
Additionally, there is a checklist for gold buyers that features information on how bullion should be stored,
how to respond to crises related to investment, and other useful facts.
Other resources include guides on how to trade any metals you have acquired and what it means to take part in the spot gold market.
There’s also an explanation of how to claim four free grams of silver with your new Bullion account;
this risk-free offer allows you to get a better feel for our unique order board.
This guide to gold aims only to supply you with the facts and figures to better inform you of all the pertinent information surrounding this type of investment.
It is not meant to lead your decision making.
Fine gold is 100% pure gold
What are the best ways to buy gold?
And where to buy gold for the best price?
That’s what we’ll explain on this page.
We’ll show you how professionals have arranged the world gold market
so that they can deal physical bullion gold much cheaper and much more safely than you.
Then we’ll show you how you can participate in their professional market.
To do that we’ll introduce you to Bullion.
We’ll also tell you about the other ways you might choose to buy gold : i.e. coins and small bars, ETFs, certificates, gold futures and mining stocks.
When you’ve understood these alternatives we’re sure you’ll have even more confidence you’re making the right choice with BullionVault.
More than 90,000 users from 175 countries use Bullion
In the last two years they bought more gold through Bullion than through any other direct bullion ownership service in the world.
BullionVault now stores over 45 tonnes of gold, which is much more than most of the world’s central banks.
Every ounce is owned privately,
by people like you, and stored in the accredited professional bullion market vault of their choice,
in one of several different vaulting locations worldwide.
OK then? Now you know you’re not wasting your valuable time
let’s get on with understanding how the professional gold market works, and how Bullion lets you use it.
- The most competitive gold prices in the world, the ones you see published in the papers and on the internet,
- are enjoyed by the participants in the professional bullion market:- gold dealers, refiners, government agencies,
- bullion banks and the occasional big investment organization.
- This professional market only deals in what are known as Good Delivery bars.
- If you’re not trading these bars you are excluded, both from their market and from their very competitive prices,
- which means you’ll pay more when you buy and receive less when you sell.
Good Delivery bars are cast by a small group of precious metal refiners accredited by the professional bullion dealing community.
They are accurately assayed and guaranteed always 99.5% pure gold or better.
The market trades their pure gold content (gross bar weight x purity)
which is known as fine gold, so no-one who trades professional market bullion ever pays for impurities.
Important concerns when Buying Gold
The critical thing for an efficient and safe purchase of gold is to take delivery,
and in normal circumstances to avoid immediate possession,
while making sure you have the right to take later possession if necessary.
This is not intuitive to most gold buyers.
Delivery (sometimes called settlement) is when you become the owner of your gold.
For your safety it is vital that you take delivery, because that is when you stop being the balance sheet creditor of whoever sold gold to you.
But it is not vital that you take delivery into your possession.
Private possession of gold is usually a mistake.
Many people want possession without thinking about it too much.
But for all the comfort that they derive from the feeling of a gold bar in their hand, few who have tried selling a bar from private possession would take possession again.
They learned, when they tried to sell, of the big trading costs that go with the private possession of small bars or coins.
Gold in your possession is subject to several disadvantages:-
The truth about gold being used as money
it is occasionally adopted in immensely rich societies (e.g. USA to the 1930s, industrialized Europe to 1914, Spain after discovering America, Imperial Rome, Ancient Athens).
But if you try to use it in a crisis-torn country during a financial meltdown stick to small quantities –
because you will probably be selling it as contraband, and at a huge discount to its international market price.
For larger (investment) quantities there is an effective alternative.
Far better than gold in your possession is gold which is fully delivered, and is your property,
but which is held in a country enjoying political stability, high local living standards, sound finances, the rule of law, and no tense international relations.
On all of these criteria Switzerland (our most popular vault) scores very well.
So you are probably better advised to postpone taking possession until an emergency makes it absolutely necessary.
In the meantime take delivery, but into a professional offshore vault, rather than into your personal possession.
Your gold will be much safer than in domestic or safe-deposit box storage, it will be far cheaper to insure, and it will retain its full resale value.
What’s more you’ll be able to bring your money back home later.
Exchange controls usually stop capital flight, but rarely inward investment.
Delivery at Bullion
Understanding delivery is incredibly important for your safety.
Because it is already in the vault of your choice at the instant of your deal your gold can be delivered to your outright ownership in the care of your custodian.
You are not exposed to the insolvency of your custodian.
Your gold is not on the custodian’s balance sheet.
No liquidator could exercise a claim over your gold. That’s the law.
What you need to understand is that most investments – even in gold – are structured to make you a creditor.
As a creditor you own nothing, but you do have a creditor’s claim over the assets of your supplier, which is safe so long as your supplier remains solvent.
If your supplier becomes insolvent the law attempts to treat all creditors fairly by requiring the balance sheet assets of that supplier to be shared pro-rata between creditors.
Of course insolvency means there is not enough to go round.
Insurance gold investment
Actuaries’ calculation of risk show, beyond doubt, that your gold is much safer in an accredited vault than it would be if you stored it at home.
That’s why insurance is included in the vaulting charges of most professional bullion
On Bullion from the instant you buy to the instant you sell your gold is insured automatically,
and the cost of insurance is included in the tiny custody charge of 0.12% per annum.
Customers can view the evidence of Bullion insurance on-line at any time.
Buy gold coins or small gold bars and you can hold them in your hand, or possibly in a safe deposit box.
Your gold is delivered (good), and in your possession (bad in large quantities).
You should try to get insurance cover if you buy a significant quantity,
but this is not always easy, and of course you have to declare that you own gold in order to insure it, which you might not wish to do.
You will certainly find there is a significant premium on purchase price and a significant discount at sale, and this will dent your profits if you are buying for investment.
Expect to lose about 8% this way, perhaps a little more in single coins and smaller denominations, or a little less in bulk.
Novice Gold investor
Novice investors often get lost in a variety of options: “Should I buy minted bars or sovereign coins?” “Maybe that limited edition coin would be a good investment?”
Sensible investors evaluate bullion options by the price and premium on the gold spot price. But the premium is only one part of the equation.
It doesn’t necessarily mean that you’ll get that premium back upon the sale.
Worse, there are unscrupulous dealers out there.
They will try to trick you into buying numismatics and other collectibles that have a huge premium and won’t retain their value over time.
As a result, it’s essential to get an understanding of precious metals before dipping your toes into this market.
In this article, I’ll answer some of the most important questions you should ask yourself before buying precious metals.
What Is the Best Way to Invest in Precious Metals?
Each method has advantages and disadvantages.
While investing in precious metals through ETFs sounds appealing due to its convenience, there are several key issues that investors need to be aware of in relation to this method of investment.
For example, if you invest in gold through an ETF, you don’t actually own the metal.
You have no claim on the gold within the fund.
This means that you cannot take delivery of the metal if the need arises.
In contrast, the key advantage of buying physical gold (such as bars and coins) is that you own the gold.
Furthermore, you own an asset that can be stored outside the financial system, which reduces counterparty risk.
Counterparty risk is the risk that the other party in an agreement will default or fail to live up to its obligations.
When investors buy gold ETFs, they are relying on financial institutions to deliver on their obligations.
In this regard, buying the physical metal is a more sensible option.
- Investors can get exposure to precious metals in two ways: physical gold (such as bars and coins) or financial products (such as ETFs).
- With a precious metals ETF, you don’t actually own the metal.
Should I Buy Gold Bullion or Silver Bullion?
While both gold and silver have attractive features, gold is the better investment for the average precious metals investor.
Gold has a much larger liquid market that is driven mostly by investment and jewelry demand.
The price of gold is less volatile than that of silver, too.
Meanwhile, silver is more speculative and has a stronger relationship to economic activity.
This is because silver has many industrial uses.
As such, silver can be attractive during down cycles when the price of the metal is cheap.
The key advantage of silver is that it’s much cheaper than gold.
Therefore, it’s more accessible to small investors.
- Gold is a better investment than silver for most investors.
- Also Gold’s price is less volatile than silver’s price.
Which Are Better as an Investment?
Bullion coins, such as Gold American Eagles, are the best type of precious metals for most investors.
This is because sovereign coins are easily recognizable, easy to trade,
and generally sell at higher premiums than bars.
You could buy smaller bullion bars, such as a 1 oz bullion bar,
but they tend to be harder to sell back and the transaction costs are higher.
For institutional buyers or those looking to buy very large quantities of precious metals,
large bullion bars are a more sensible option, due to the lower premiums.
Coins are the best way to buy precious metals for most investors.
Also Coins are highly liquid and easy to trade.
Bullion bars are more suited to large buyers.
What Are the Best Bullion Coins to Buy?
both silver and gold—are some of the best coins to buy.
The South African Krugerrand coin is another excellent coin for investors.
The gold version is minted from 91.7% pure gold alloy and contains one troy ounce of gold.
It’s one of the most traded gold coins in the world.
Other good gold coins to buy that are reasonably liquid include the Australian Kangaroo coin and the English Britannia coin.
Investors should stay away from sovereign coins from lesser-known countries.
They should also steer clear of special edition commemorative sovereign coins.
These coins are usually more expensive to buy and resell for less than the better known coins.
Best gold and silver coins for North American investors are the American Eagle,
American Buffalo, and the Canadian Maple Leaf.
For European investors, Eagles or Austrian Philharmonics are excellent coins to buy.
What Is the Best Place to Buy Gold Bullion
London Bullion Market Association (LMBA) approved vaults.
Investors should avoid taking physical possession of their gold or silver unless they believe there is an emergency.
It’s much safer to have your bullion stored in a secure vault.
Also much easier to sell your metals that are stored in a secure vault
because you don’t break the chain of custody.
The best place to buy precious metals is through an online dealer.
Look for a dealer that offers a buy-and-store program.Investors should avoid taking physical delivery.
Final Thoughts gold investment
Every investor portfolio should contain an allocation to precious metals.
You’ve taken the first step toward ensuring your financial future by reading this primer on how to buy precious metals.
With all of the uncertainty in today’s global economy, it has never been more important to diversify
and add the security of physical precious metals to your gold investment strategy.