If you’ve decided to start investing in gold, the next question you will need to ask is where to buy gold? The answer to this depends on what type of gold you choose to invest in, although you can find a good range of dealers in all types of gold online. On this page I will cover the basics of what you need to know about where to start looking if you want to invest in gold – exactly which dealer or broker you go to will depend on your sepcific requirements.
Where to buy gold bullion
Gold bullion comes in two forms, both of which are readily available for your to buy; gold bars and gold coins. Gold coins are genreally more flexible, in that you can sell part of your allocation more easily, rather than having to sell a whole bar, and they tend to be more liquid as a result. However, if you want to invest in gold in large qualntities, then bars may make more sense from a practical perspective. If you are just buying gold for investment, you are best to ignore numismatic coins, which can command a premium, and buy coins with the minimum premium over the spot price. The Krugerand is the most common gold coin, and therefore usually the best option.
There are a wide range of gold bullion dealers and where you buy is down to preference, but try to check out a sample of dealers to see where you can get the best price. I would also recommend that you choose a well established gold dealer. In the UK and Europe, these include ATS Bullion, Chards, and GoldCore, and in the US, JM Bullion.
Where to buy gold coins
As discussed above, if you want to buy gold coins purely from an investment perspective, then you should follow the advice above on where to buy gold bullion. However, if you are interested in buying numismatic coins (rare, antique or beautiful coins that have a value over and above the price of the gold itselff), then it’s worth checking out the London Mint Office and the Perth Mint, which produce new commemorative gold coins for sale. For collectable coins that are used or antique, check out Coin Mercantile, Inc.
Where to Buy Gold Certificates
The Perth Mint runs a gold Certificate Programme, and this is the only precious metal certificate programme in existence that has Government backing . If you choose to invest in gold certificates, you can buy bullion in either allocated or unallocated accounts. This programme is widely regarded as the safest way to own investment grade gold bullion. Gold ceritificates can be bought and sold easily and there are plans to enable investors to buy or sell in real time via the internet. The cheapest way to hold bullion is in an unallocated investment as there are no fees for insurance or holding the gold. Every gold bar is audited and so you can be absolutely sure about the quality and quantity of your investment. Most investors opt to own their bullion in unallocated accounts as there are no insurance or holding fees on them and there is the flexibility of being able to transfer to an allocated account simply by paying small fabrication fees should the investor deem it necessary. Vist the Perth Mint here.
Where to buy into a gold exchange traded fund (ETF)
ETFs are a relatively recently developed way to invest in gold and are a form of derivative that track the price of gold and silver. Currently, the best regarded ETFs are the Streettracks Gold Shares (NYSE:GLD) in the US and the Lyxor Gold Bullion Securities (LSE:GBS) in the United Kingdon. You can invest in an ETF through most stockbrokers.
An ETF is only really attractive as a shorter term investment in gold as the annual administration fees charged for the fund management effectively reduces the amount of gold you hold each year. ETFs are simialr to derivatives that track the price of gold and if you invest in an ETF you do not have any access to the gold itself. ETFs are mainly used by investors wanting to speculate on short term movements in the gold price.
Where to buy gold stocks
If you purchase gold stocks, you are not actually buying the actual gold, but you are investing in gold mining companies, just as you would invest in any other company. You must be careful when you are investing in these types of stock, just as with any investment in shares, and just because the gold price increases this does not mean that the stocks will also increase in value. Individual gold shares are regarded as high risk, so exactly the opposite of investing in gold itself; however, as you are probably aware, with the higher risk can come higher rewards.
Other gold investments
As with other investment types, there are also a fairly broad range of ways you can invest in gold, which are worth exploring if you are an experiences investor. As well as the methods described above, you can invest in SIPPS in the UK, gold stock options, unit trusts or mutual funds or gold futures.
As you can see, if you are thinking of investing in gold, there is a wide choice available to you in terms of how you can invest. As with any other investment, weigh up your options first and make sure you are happy with your choice before you take the plunge.