Buying online is as safe as buying from a physical retailer, if not safer. Whether you are interested in buying gold bars or coins, you can buy gold online and be safe as long as you deal with a reputable gold company, such as International Precious Metals. You may be using an unsupported or outdated browser. For the best possible experience, please use the latest version of Chrome, Firefox, Safari or Microsoft Edge to view this website.
If you're looking to buy gold, you don't have to turn your dressing room into a small Fort Knox. In fact, the only storage you may need is an investment account. Gold bars, more commonly known as bullion, are a popular choice for people looking to buy gold. Usually, ingots are sold by the gram or ounce, and purity, manufacturer and weight must be stamped on the face of the bar.
You can buy gold bars from dealers, individuals or online at sites such as JMBullion, American Precious Metals Exchange (APMEX) or SD Bullion. And keep in mind that you may be required to pay shipping costs plus insurance to ensure the safe transport of your ingots. Gold coins, such as the American Golden Eagle or Canadian Maple Leaf, are popular collectibles. This means that you will probably pay a higher premium than you would for the same amount of gold in the form of bullion.
Coins tend to have a lower gold content than bullion. A one-ounce American eagle coin, for example, has only 91.67% gold. In fact, the coin weighs 1.1 ounces, of which approximately one ounce is pure gold; the rest of the peso is silver and copper. You can buy gold coins through croupiers, pawnshops and individual sellers you trust.
If you decide to buy your gold coins online, be sure to go through a dealer that is listed in the U.S. UU. Whether you buy your gold coins in person or online, you don't want to waste money on counterfeits or less pure gold than you are led to believe. Jewelry, especially old pieces, can provide another avenue to buy gold.
But just like gold coins, you're likely to pay more for the amount of gold you actually receive, a premium that could range from 20% to 300%, according to the manufacturer. Also, keep in mind that not everything that glitters is gold. Manufacturers use alloys that combine gold with other metals to make their parts more durable or adjust their color. This is how gold quality (measured in carats) correlates with purity.
Just like with coins, you'll want to be very careful when buying gold jewelry. Make sure the person you buy your jewelry from is reputable. You can start with jewelers who are members of Jewelers of America and who have signed a code of professional conduct that requires them to be honest and communicative about the nature of their pieces. You'll want to make sure you have as much documentation as possible so that you can attest to the quality of your gold when you resell it.
If all that sounds like a hassle to you, but you still want a little glitz in your investment portfolio, consider investing in stocks, mutual funds and ETFs related to the gold industry. Instead of investing in physical gold, you can buy shares in companies that mine and refine gold. Major gold mining companies include Barrick Gold (GOLD) and Newmont Mining Corporation (NMC). While its share prices may not fully coincide with the physical price path of gold, they are likely to be correlated.
This gives you exposure to gold as an investment without the risk or headache of handling physical gold. Instead of investing in a single gold-related company, invest in a basket of gold-related securities through mutual funds or gold ETFs. Gold funds can track the price of gold, include the stocks of various gold mines and refineries, or expose to futures and gold options. For investors willing to take more risks, futures and options may be attractive.
If none of those words mean anything to you, you should probably avoid these gold investments for now, as they are highly speculative. Under a gold options contract, you have an agreement with the option to buy or sell gold if you reach a certain price by a predetermined date. To buy futures or gold options successfully, you need a brokerage account and a wealth of industry knowledge. You'll need to closely monitor your account and the price of gold to make sure you don't miss the opportunity to enact your options.
You can also end up increasing any losses you incur as a future and options usually involve taking leverage or using borrowed money to buy securities. If you're looking to get rich with the modern gold rush, you're probably in the wrong place. Over the past five years, the price of gold increased by approximately 36%, while the S&P 500 rose by 104% over the same period. So why all the hype? That said, gold prices can be very volatile, meaning that gold is not a totally (or even mostly) safe investment.
In fact, you can easily create a well-diversified investment portfolio without gold completely. But if you want some of that golden glow in your investment account, make sure that it occupies only a small percentage of your investment dollars. Kat Tretina is a freelance writer based in Orlando, FL. He specializes in helping people finance their education and managing their debts.
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