How to Buy Gold and Silver
How and Where to Buy Gold and Silver
Before you are ready to buy Gold or silver, it’s important to know the different options available to you.
Gold bullion and silver products come in a variety of sizes ranging from 1/4 ounce Coins to one kilo bars. Many people prefer coins because of the ease of liquidating them when you are ready to sell.
There a number of factors to consider before you purchase your Silver and Gold investment.
These are as follows:
And of course, where and whom to buy gold and silver from.
Which to Buy, Bullion Coins or Bullion Bars?
Bullion coins are highly refined precious metal products that are round in shape (as opposed the rectangular shape of a bullion bar), and produced to exacting specifications by numerous federal governments throughout the world, specifically for investment purposes.
These coins are produced in large quantities and come in a variety of sizes, which are convenient to own and trade -- typically one, one-half, one-quarter, and one-tenth troy ounces.
Their content – that is, the weight and purity of precious metal they contain -- is guaranteed by the governments that produce them.
The United States Mint describes a bullion coin as: “a coin that is valued by its weight in a specific precious metal.”
Unlike commemorative or numismatic coins (Collector Coins), valued by limited mintage, rarity, condition and age, bullion coins are purchased by investors seeking a simple and tangible means to own and invest and buy gold, silver, and platinum in the precious metals markets.
Moreover, while bullion coins are ascribed legal tender status in their country of origin, they are actually valued by the market for their precious metals content, plus a small premium representing the cost of production, shipping handling and the seller’s profit added to their price.
They are readily bought and sold by investors through a world-wide network of precious metals retailers, wholesalers, banks and brokerage firms.
Thus, to buy gold bullion coins and silver are an excellent choice for most investors.
Click Here for detailed information on the different types of gold coins.
Click Here for detailed information on the different types of silver coins.
Bullion bars, on the other hand, are rectangular blocks of investment grade precious metal (also referred to as “ingots”) manufactured by commercial refiners. (Note: the most reputable and prominent commercial refiners have standing with, and are recognized by the world’s leading precious metals exchanges.)
Bullion bars are produced in a wide range of sizes – from 1 gram (or less) to 1000 ounces (1Kg).
They typically bear four distinguishing marks that uniquely identify them, including their refiner’s mark (i.e., the bar’s brand name), the gross weight (usually in troy ounces), the metal fineness (or “purity”), and the bar’s serial number.
Having been produced commercially, they have no legal tender status, but reputable refiners stand behind the quality and authenticity of the bars that bear their brand name.
Both small and large sized bars are also highly liquid and easily traded worldwide, provided the larger bars are not held by the investor personally.
And, like bullion coins, the price of these bars varies with the market value of the precious metals they contain, plus a modest premium representing the cost of production, shipping, handling and the seller’s profit.
There are, in reality, three important aspects for an investor who wants to buy gold or silver to consider when choosing between bullion coins or bullion bars for investment.
These considerations include the following:
1) Price Premium: This refers to amount of money an investor is charged for the product over and above the value of the metal the coin or bar actually contains.
And the value of silver and gold prices is determined by its Spot Price.
The premium represents the cost of production, shipping, handling and the seller’s profit. A higher premium is normally paid for smaller-sized coins and investment bars (i.e., 5% - 20% depending on size) than is paid for large investment grade bullion bars (i.e., 2%- 5%).
This is because, like with most products, it costs the manufacturer – in this case, a mint or refiner – more money to make, say, 400 one-ounce perfectly shaped, designed and inscripted pure gold coins, than it does for that mint or refiner to produce the single inexact weight and pure “400-ounce” gold bar described above.
2) Selling Flexibility: Do you intend to just buy, hold and then ultimately sell your precious metals for profit?
If so, then perhaps buy gold or silver bars may be best, as the premiums paid at the time of purchase will be lower.
Or, is this a long-term investment that may be a permanent part of one’s estate that will be passed on to a number of heirs?
If this is the case, then buying bullion coins may be preferred. One thousand one-ounce bullion coins can be readily distributed among five heirs, where as two 400-ounce and two 100-ounce bullion bars cannot.
3) Storage: you as an investor may desire to hold your bullion coins or bars close at hand and, therefore, may request personal delivery.
This is fine for bullion coins and small investment bars (100 oz bars and below), as neither will typically require assay (unless they are materially damaged) at the time they are ultimately sold.
But, because the content of large bars can be manipulated or altered in ways that are difficult to detect by visual examination, even by seasoned professionals, a time-consuming and costly assay will be required if the investor has taken personal possession of them and presents them to a dealer for sale.
Thus, investors who buy gold or silver large bars for their portfolios are advised to leave them in storage (in an insured account titled in their name) at a reputable recognized precious metals depository. If a large bar is kept in such a storage facility, its liquidity will not be affected at the time of sale.
What type of facility or institution should it be stored with and should it be stored locally, nationally or internationally?
The short answer is to store your precious metals with the safest and securest facilities or institutions locally, nationally and internationally and to be sure that you are outright legal owner of the gold or silver.
Also be sure that the storage company or investment provider can and will ensure delivery of your bullion in a format that you require should you need it, to the destination of your choosing and in a timely manner.
Safety Deposit Boxes Versus Depositories
Safety deposit boxes in banks and specialist depositories can be used but allocated accounts in specialist depositories are less risky and superior.
A Safety Deposit Box is a type of safe usually located in groups inside a bank vault, in a secure room of a bank or post office or in a specialist depository.
It usually holds important and valuable possessions such as important documents (wills, property deeds), family heirlooms, cash and or precious metals that a person might be reluctant to leave at home due to fear of tampering, fire, flood and theft.
In recent years, safety deposit boxes have been targeted by authorities in some countries.
In the UK, authorities said that one private deposit box company was facilitating money laundering and police raided the company and the 7,000 individual safety deposit boxes confiscating assets with an estimated value of £2.5 billion.
In the U.S., family heirlooms, cash and bullion held in safety deposit boxes have been raided, appropriated and sold off at auction.
Some state governments claim the contents are “unclaimed property” (a safety deposit box is considered “abandoned” after just 3 years) in order to raise funds for government states in grave financial difficulty.
Safety deposit boxes in financial institutions that are close to insolvent or may become insolvent are high risk, as are safety deposit boxes in states or countries that are close to bankruptcy.
Especially as the contents of safety deposit boxes are normally not insured.
A Depository on the other hand, is a place where valuable objects are kept or deposited for safekeeping or storage, e.g. a high security warehouse or vault for important documents, precious works of art, valuables, heirlooms, cash and bullion.
Depositories are normally private companies that are not owned by banks and thus less exposed to economic cycles or to a collapse of the financial system. They are independently insured.
They make no claim over assets stored and their sole purpose is to provide the safest environment for valuable possessions.
Storage is not a secondary function as it is in a bank, rather it is a primary defining function and one which is carried out to the highest standards with far less risk.
Who and Where to Buy Gold and Silver From
Deciding where to buy gold and silver products is a very important decision.
No doubt in my mind it’s a site called GoldSilver.com.
The company is owned and operated by a fellow named Mike Maloney.
Mike is a renowned advisor, author, and industry expert. Mike's book, Guide To Investing in Gold and Silver ,is the number-one best selling precious metals investment book of all time.
Based in Southern California, they specialize in the instruction of precious metals investing and providing world-class gold and silver dealer services.
You can buy Gold and Silver right from his site.(use referral 1359stockmarketcoach)
Click Here for more details.
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