How To Buy Gold Bullion
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Once upon a time the only gold one
could buy were the large 400 ounce gold
bars or gold coins such as Krugerrand.
Time change and nowadays there is a
tremendous variety of gold bullion in
the form of solid gold coins and bars
from many mints and countries. You can
now buy gold bullion bars as small as
1 gram or a 20th of a troy ounce. Of
course buying gold in such small quantities
is not very practical as the cost is
so high. The mark up on tiny gold bars
includes expensive packaging, certificates
and the profit margin of the mint or
dealer you are buying from.
What is Gold Bullion?
Gold bullion is either gold coins and
bars of various types, sizes and weights.
The bars come in a variety of sizes
and weights from as small as one gram
worth a few dollars to the one ounce,
ten ounce, one hundred ounce and one
thousand kilogram bars as well as the
traditional 400 ounce bars or ingots
used by large companies and institutions.
All
gold, when bought comes at a price and
a premium over the spot price (market
price), and this changes day by day.
The smaller the bar or coin, the larger
the premium. There is a specific cost
to fabricating gold and that does not
change very much. Of course the fabrication
costs for gold coins is higher than
bars as they are struck to a much better
finish. Gold bullion coins provide
hedges against currency debasement and
devaluation. Yet when investors search
the Internet for information about gold
investments, they often are confused
by the many sites that promote numismatic
and collector coins, which sell at high
premiums to their gold content. Gold
bullion coins, on the other hand, sell
at small premiums over the value of
their gold content and make the best
gold investments.
What is the best Gold Bullion to
Buy?
Americans regained the "right" to own
gold bullion on December 31, 1974. Previously,
since President Roosevelt's 1933 "gold
call-in," Americans could own only numismatic
coins whose prices were determined more
by collector interest than by the value
of their gold content. Numismatic and
collector coins sell at huge markups,
sometimes at prices many times the value
of their gold content. Bullion gold
coins sell at small markups over the
value of their gold content. Today, American
Gold Eagles are the best selling
gold bullion coins in the world. South
African Krugerrands, although no
longer imported into the U.S. for the
investment market, remain immensely
popular, with thousands of them trading
daily in the U.S. Krugerrands sell at
much smaller premiums over spot than
Gold Eagles. Still, Gold Eagles are
the best selling gold bullion coins
in the world, as millions of investors
have made them their preferred gold
investment. When buying gold bullion
it is better to buy the largest size
bars or coins you can afford. The larger
the gold bars or coins you buy are,
the closer to the actual value of gold
you are likely to get for your money,
with a proportionately less margin to
pay. There will always be some margin
to pay but this can be reduced down
to virtually 1 or 2 percent with the
larger bars. Of course you do have a
rising scale of storage and security
to attend to so there is a balance to
be drawn. If you can afford the 400
ounce bars then it is likely you can
afford the transport and storage fees associated with such a large value of
gold. Most bars of such size are generally
kept in bank vaults. If you purchase
a 1 gram bar then you will likely pay
twice the value of the actual gold.
However your security or storage problems
will be minor. It will fit in your pocket
or could be hidden in your house and
virtually impossible to find.
How to Buy Gold Bullion
Basically it starts with, how much are
you going to spend? Then you can check
out the various dealers and mints to
see what is on offer. Some things to
keep in mind are: Pick an established
dealer or mint. It is not recommended
you purchase off eBay unless you know
the dealer is established and has an
excellent feedback record a mile long.
The Perth Mint is an excellent place
to purchase Australian gold bullion.
Get the current value of gold per ounce
or gram in USD. This is the standard
used. Compare this to the price of the
bullion bars on offer. Pick that bar
or those bars that more closely match
your spending budget and offer the lowest
margins. Ask yourself, "do you really
need a certificate?" This is valuable
if you later need or want to resell
the bar. But, with the smaller bars,
unless you are prepared to hold onto
it for some considerable time, you are
unlikely to get your money back due
to the margin you have to pay unless
the value of gold rises remarkably.
Once you have chosen what you want,
you simply pay for the bar and await
its delivery. Most people collect gold
bullion as a way if preserving or increasing
their asset base. Some collect it just
as a rewarding hobby. Whatever your
reason, if you are thinking you would
like to buy gold then the above information
will assist you to understand how to
buy gold bullion.
>>> go to Bullion.com Gold Bullion Coin Directory
