What is the purpose of your investment?

Your objective, risk tolerance, and investment strategy will determine whether you should buy physical, electronic, or paper gold. Researching and consulting with a financial advisor is important before making any investment decisions.

Physical Gold: If your objective is to own gold as a long-term investment, a store of value, or as a hedge against inflation, physical gold can be a good option. Physical gold can be purchased in the form of gold bars, coins, or jewelry. However, keep in mind that physical gold comes with additional costs such as shipping, insurance, and storage.

Electronic Gold

Electronic gold is an investment in gold that is held electronically, such as through an exchange-traded fund (ETF) or a digital gold provider. Electronic gold provides an easy and cost-effective way to invest in gold without the need for physical storage or transportation.

Gold Derivatives

There are several types of gold derivatives such as futures contracts; options contracts; gold swaps’ and ETFs. Gold derivatives can be a valuable addition to an investment portfolio, but they also come with risks. They require a good understanding of the market and the risks involved, and investors should consult with a financial advisor before investing in gold derivatives.

Precious Metals Fund

Investing in a precious metals fund can provide investors with exposure to the price movements of precious metals without the need to own the physical assets. Precious metals funds may be attractive to investors as they can serve as a hedge against inflation and market volatility.

Fully Allocated ETF

A fully allocated ETF is an exchange-traded fund (ETF) that holds physical gold or other precious metals in a vault on behalf of its investors. The ETF is fully backed by the physical assets it holds, meaning that the fund’s assets are allocated to physical gold or other precious metals in their entirety.

Mining company shares

Investing in gold mining company shares can be riskier than investing in physical gold or gold ETFs as it’s not solely dependent on the price of gold but also on the performance of the mining company. The success of a gold mining company is affected by a range of factors, such as the quality and quantity of the gold deposits they own, the efficiency of their operations, the cost of production, and the demand for gold in the market.

Some factors to consider when choosing which gold product to buy are liquidity, tax efficiency, divisibility, and of course value. 

Value

Both gold bars and coins are typically made from .999 or .9999 pure gold, but some coins may have additional value due to their rarity or historical significance. For example, certain collectible gold coins may have numismatic value that can drive up their overall worth. Gold coins from a specific era or mint may be more valuable than other coins of the same weight and purity.

Tax efficiency

In some countries, gold coins may be exempt from value-added tax (VAT) or sales tax, while gold bars may not be. This can make coins more tax-efficient than bars in those countries. In other countries, both coins and bars may be subject to the same tax treatment.

Gold coins often come with higher premiums than gold bars, which can make them more expensive to purchase. However, if the coins are considered legal tender in your country, they may be subject to different tax treatment than bars.

Liquidity

Both gold bars and coins can be easily bought and sold in the gold market. However, there may be some differences in terms of ease of sale and price fluctuations. Certain gold bar brands may be more well-known and trusted in the market, which can make them easier to sell. For example, gold bars from reputable mints like the Royal Canadian Mint or PAMP Suisse may be more easily recognized and liquid than bars from lesser-known brands.

Some gold coins may have numismatic value, which is based on factors such as rarity, age, and historical significance. This can make them more valuable and potentially easier to sell than gold bars, which generally have value based solely on their weight and purity.

Divisibility

When it comes to gold investments, coins are generally considered to be more divisible than bars. Gold coins come in a range of sizes, as small as 1/25th of an ounce, allowing investors to buy in smaller increments and sell their holdings easier

Gold bars, on the other hand, are generally larger in size and have fewer options in terms of denominations. While smaller gold bars are available for purchase, they may still be larger and less divisible than coins.

When purchasing gold coins or bars, it’s important to research the seller and the product to ensure authenticity and quality. Additionally, it’s important to consider the cost of shipping and insurance, as well as any applicable taxes or fees, when comparing prices across different sources.

Bullion dealers

Bullion dealers are specialized companies that buy and sell precious metals. They may have physical locations or operate exclusively online. Some well-known bullion dealers include APMEX, JM Bullion, and Kitco.

Online marketplaces

Online marketplaces like eBay and Amazon can also be a source for purchasing gold coins and bars, but it’s important to exercise caution and verify the seller and product’s authenticity before finalizing a purchase

Auctions

Auctions can be a good source for purchasing rare or collectible gold coins or bars, as well as for buying larger quantities of gold at once. Consider setting a maximum bid in advance to help you stay within your budget.

Jewelry & Coin Shops

Local coin shops may offer a limited selection of gold coins and bars for purchase, but it’s important to ensure that the shop is reputable and that the products are authentic.

How do you know you’re getting high-quality and real gold?

Purchase gold from a reputable dealer or seller. Do your research and read reviews or ratings from other buyers to ensure that the seller has a good reputation for selling authentic gold.

Look for a hallmark or stamp on the gold that indicates its purity and authenticity. In the United States, gold is typically stamped with a number that represents its purity, such as “999” for 24-karat gold.

If you’re purchasing expensive or rare gold, consider getting an appraisal from a professional to verify its authenticity and value.

Gold is often seen as a safe haven asset during times of economic uncertainty, such as recessions or periods of high inflation. When the economy is struggling or experiencing instability, the price of gold tends to rise.

Political instability or tensions can also impact the price of gold. If there is a sudden change in government or geopolitical events, investors may seek the safety of gold, causing the price to rise.

One option is to keep your gold in a safe deposit box at a bank or credit union. Safe deposit boxes are typically very secure and provide protection against theft and damage. However, they can be expensive and may not be insured, so it’s important to check with your bank to understand their policies and fees.

If you have large quantities of gold or other precious metals, you may consider professional storage with a third-party storage provider. These providers typically offer secure storage in vaults or other facilities, and may also offer insurance against theft or damage.

Home safes can provide protection against theft and damage, but it’s important to ensure that the safe is securely bolted to the floor or wall and that it is fireproof.

There are many reputable online gold buyers that offer competitive prices for gold. These buyers typically provide a shipping label for you to send in your gold, and then provide an offer based on the weight and purity of the gold.

You can also sell your gold at a local coin shop. Coin shops will typically provide an offer based on the weight and purity of the gold, and you can receive payment on the spot.