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How to Buy Gold for Investing

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OK, so you want to learn how to buy gold for investing. You’ve come to the right place here at! The price of gold has consistently remained high in recent years, and it’s easy to see why. With uncertainty increasing in the world, many investors are turning to gold as a safe haven, which in turn has driven up its value. If you’re interested in buying gold for investing, here are some steps you can take to get started.

How to Buy Gold for Investing

how to buy gold for investing

Decide What You Want to Invest In

As a rule of thumb, your goal is not to lose money when investing in gold. That’s why it’s critical that you only buy gold when you have a firm idea of what you want to do with it. The best way to ensure your success as an investor is by determining whether or not you want physical possession or paper ownership of your gold before you purchase it. You can buy gold coins or bars, but buying and selling either can be complicated and costly if done incorrectly.

If you want physical possession of your gold, you can buy and sell gold coins or bars. Gold coins come in several different sizes: from as small as 1/10 ounce (1 gram) to 100 ounces (31 kilograms). They are valued according to their weight and precious metal content. Bars are not valued by size but rather by weight. The most common weights for bars are 400 ounces (27 kilograms), 100 ounces, 10 ounces, 1 ounce, 1/2 ounce and 1/4 ounce.

If you want paper ownership of your gold, you can buy a futures contract or exchange-traded fund (ETF). These types of investments allow you to track gold prices. You can also store your gold in a vault. Both options are easier than buying and selling actual bars or coins, but they’re still more complex than putting money into mutual funds or stocks. A futures contract obligates you to buy gold at a specific price on a certain date.

An ETF is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Most ETFs track stock market indexes, such as the S&P 500 or Dow Jones Industrial Average. Physical gold itself is not included in most indexes. You can buy shares of some ETFs on major exchanges during trading hours just like you would buy and sell stock. There are also ETFs that invest in futures contracts and allow you to invest in gold without holding any physical metal.

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How to Buy Gold for Investing

how to buy gold for investing

Figure out your Budget

No matter how much money you have to invest, it’s important that you only purchase as much gold as you can afford. When buying gold, calculate a specific budget and stick with it. Don’t go over your set limit or you might lose money. For example, if you buy 10 ounces of gold at $1,200 per ounce, that comes out to $12,000—which is too big of an investment for most budgets.

Buying gold for investment is a great way to diversify your portfolio, but you need to be sure that you can afford to purchase as much gold as you want. To figure out how much money you should buy, do some research and find out how much one ounce of gold is selling for in today’s market. For example, if one ounce of gold costs $1,200, then that’s what you’ll need in your budget.

In order to have a solid investment plan, you’ll need to have a game plan for your gold purchase. Calculate how much money you can afford and stick with it. You don’t want to buy more gold than you can afford just because its value is on an upswing. If gold prices rise significantly over time, consider purchasing more. For example, if one ounce of gold costs $1,200 today but $2,000 next year (after holding for a few years), then that would be a good time to invest in some additional ounces before prices continue to increase. If you do choose to invest in additional ounces down the road, remember that they’ll likely cost slightly more due to inflation.

How to Buy Gold for Investing

What Kind of Gold Should You Get?

Two major categories of gold investments are available: physical gold and gold stocks. Which one is right for you? Below, we’ll discuss both options in more detail so you can decide which type of investment is best for your personal situation. Keep in mind that there’s no universal best option; it all depends on what you’re trying to accomplish.

How do you determine if gold stocks are right for you? First, ask yourself: are you investing in gold as a hedge against inflation? If so, gold stocks may be better. If not, then consider whether gold is likely to appreciate or depreciate. The answer will help you decide whether it’s better to hold physical gold or paper stocks.

Once you decide on a strategy, you can find gold stocks in one of two ways: You can buy shares in companies that mine gold or mineshares in companies that are developing new mines. Each approach has its own benefits and drawbacks. Which is right for you? It depends on your preferences, but also on how much risk you’re willing to take.
How do I store my gold?: Like any asset, physical gold needs to be stored securely so it doesn’t get lost or stolen.

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How to Buy Gold for Investing

how to buy gold for investing

How Much Can You Afford?

When it comes to investing in gold, you have many options available. However, not all of them are affordable. How much can you afford? Is there a budget in place? Make sure that whatever your choice is, it fits into your budget so that you can stick with it over time.

If you’re just starting out, it may be better to opt for a lower price. This way, if you find that you don’t have time or desire to invest in gold as much as you thought, your risk is limited. It also may make more sense to buy items with a certain amount of intrinsic value, such as silver coins versus raw bullion. The former has significantly more inherent value than bullion.
As far as location goes, there are many places from which you can buy gold and silver coins and bars—your local coin shop (online or physical), or an online vendor like Goldco or Augusta Precious Metals, which we both highly recommend!

As a rule of thumb, you can expect to pay $1.00 or more per ounce of gold and 2.5-3 times that amount in silver coins and bars (meaning, an ounce of gold will cost you somewhere between $25-$30). With silver coins and bars, you get less bang for your buck than with gold due to their lower price point. But what they lack in price savings, they make up for with intrinsic value which does have some practical uses!

Keep in mind that gold and silver coins are also collectible. So, even if you’re not looking to add them as an investment, you can still buy them for their intrinsic value as a collectible and hold onto them as a long-term investment that will appreciate over time.

How to Buy Gold for Investing

Storage Options and Insurance

Depending on how you buy your gold, you’ll have several options when it comes to storing your precious metal. You can store it at home, in a safe deposit box at a bank or an account with one of several storage companies.
If you’re buying gold coins or bars, it will be important to consider insurance and storage options. If your home is burglarized, your investment may be stolen along with any other valuables you keep there.

You may also want to consider purchasing gold certificates, which are basically paper shares of gold that you purchase through an exchange. These can be easier to store and trade than physical gold and provide more liquidity. The downside is that they cost more than buying a stake in physical gold.
A third option might be buying shares of a mutual fund or exchange-traded fund (ETF) that holds gold as an investment option.

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Another option is gold certificates. These are paper shares that you purchase through an exchange. Storage fees for these vary depending on where you buy them. Some require storage in a safe deposit box, while others do not. Be sure to read all terms and conditions before purchasing a certificate or starting any investment account so you know what your options are and how much it will cost you to invest in physical gold as opposed to investing in funds or ETFs.

How Do You Sell?

Selling a gold investment is just like selling anything else. You list it on an online marketplace, and then you wait until someone buys it from you. The price of gold fluctuates, so you’ll want to check how much your current piece of gold is worth before listing it online. It’s easiest if you have some idea what you paid when you first bought it; otherwise, try searching online or looking at a chart that shows recent pricing trends.

When should you sell?: Selling gold is just like selling anything else, so there’s no one right answer. Your situation will probably be different from others who are reading how to buy gold, and your circumstances may change over time. Maybe you bought gold as an investment when it was going up in value and now that it’s lost some of its luster, you want to get rid of it before it becomes a burden rather than an asset.

Maybe you bought gold as an investment with a financial cushion in mind and now that you’re ready to use it, you want to get rid of your gold so that it can be converted into cash or another form of investment. Maybe you inherited gold from someone who wanted you to have it—and not necessarily as an investment—and now they’ve passed away and your inheritance has become a liability rather than a gift.

In any case, it’s important to make sure you consider everything before selling gold. If you need money right away because something has happened—someone is sick, your car broke down, etc.—you should sell some of what you have; just don’t do anything hastily without doing some research first. If you bought a piece of jewelry with gold in it as an investment but aren’t attached to that specific piece, then sell that. Again, however, be sure to take a good look at what you want out of your investment before making a decision.