How to Buy Gold ☛

how to buy gold - your guide

This article is for newbies and experienced hands alike, who wish to expand their Gold investment in 2017. We will walk you through all you need to know about making your investment in gold a successful one.

We'll look at the best ways how to buy gold in 2017. We'll also reveal how NOT to buy gold in 2017!

The economic climate of 2017 demands all investors to diversify their investments rather than depending solely on paper based investments (that's paper gold or stocks!). While the average lifespan of modern paper currencies is just 39 years, that of Gold is several thousand years! Little wonder most people opt for it when they wish to keep their wealth for generations yet unborn.

Ever since the economic slump of 2008, the demand for gold especially by investors has skyrocketed. This is essentially a reaction by investors in response to the economic measures employed by governments the world over.

A Vicious "Race to the Bottom"

All around the world, central banks of countries are manipulating their currencies viciously in order to stay ahead. In this game play, the country with the weakest currency wins. More like the opposite of Darwin’s theory.

The consequence of this currency war is that there is a fall in the face value of fiat currency and this means bad business for investors. Not just investors alone but also the common man on the street is affected. In the face of plummeting fiat currency, the value of gold experiences a steady rise.

It is for this reason gold has been infallible in storing up wealth. Every successful investor you meet out there has an absolute bare minimum 5% of his investment portfolio, stored up in gold.

gold investment plans

How to Buy Gold in 2017

No matter your motive behind investing in gold, knowing the best way how to buy gold is vital for a successful investment. Depending on the investor’s unique need, there are a good number of options. Some gold dealers offer a more innovative approach while others prefer the good old traditional methods of selling gold. Next, we’ll take a look at several of the most popular ways how to buy gold.

Should I Buy Physical Gold?

gold bullion coin

In terms of safety and ease of procurement, buying precious metals in form of bullion bars or rounds is the way to go. More details on this are shared at the tail end of this article. Gold bullion comes in at competitive prices as gold dealers jostle to attract customers. 1 oz. gold coins are a popular choice among American, Canadian, Australian and South African investors.

Don't forget that buying physical gold is a bit more pricey as you'll always be paying slightly above the prevailing spot price. This is just the difference between "retail" and "wholesale", as you would find with any commodity. So it is necessary to put this into consideration before making a move. To discover how to avoid unnecessary mistakes and extra charges, ensure you request a free investment kit from the gold dealer.

What are the Advantages of Buying Physical Gold Bullion?

​Should an economic slump occur, gold tends to be safer form the government's sticky fingers. Other benefits include difficulty in faking gold; this precious metal is accepted as a legal tender in every corner of the world.

What are the Disadvantages of Physical Gold Investment?

The one drawback of investing in physical gold is the cost of its storage. This is because it is a highly sought after commodity by criminal minds. In addition, it cannot be traded with quite the same ease as ETFs.​

If you want to go deeper into the pros and cons of gold investing then there are many great books on the subject.​

David Einhorn gold quote

Should I Buy Gold Exchange Traded Funds (ETF) and Mutual Funds?

​Ever since inception in 2004, investors have poured billions of dollars into ETFs. It has rapidly grown in popularity being the favorite investment tool for investors looking for short term ROI.

The most prominent ETF is GLD which has traded nothing less than $670m worth of shares every single day, ever since it was introduced in 2004!

Though very attractive, some amount of caution needs to be exercised when dealing in ETF’s. Under ETF, unallocated claims of gold is what is actually traded and not the direct ownership. This makes ETF vulnerable to financial break downs though most investors tend to overlook this risk.

What are the Advantages of Gold ETF Investment?

​As against physical gold that requires costly storage, there is no such thing in ETF since no physical Gold is traded. Also, there are few complexities in dealing with ETFs.

What are the Disadvantages of Gold ETF Investment?

​There are no safeguards, should a major financial collapse occur. ETFs are not really traded on real gold so there is no ownership of the precious metal. If markets should shut down during a collapse, there would be no way to liquidate your investment.

Should I Invest in Gold Mining Stocks?

a gold mine

​One other option for running a gold investment is buying shares in the actual mining companies. Investors seeking ways to grow their gold investment portfolio have found this option irresistible. The investor profits from the operations involved in the mining of the gold both in the present and in the future.

Investments in gold mining have great capital buildup potential and the dividend accruable is one of the highest when it comes to investment. Just about any investor in any corner of the world can run this type of investment; so long he or she has a brokerage account.

However, investing in Gold mining Stocks are for investors with a large appetite for risk. This is because the prices of mining stocks do not really follow the price of physical gold. It is equally important to note that gold mining operations are very risky, as explosions keep rocking goldmines around the world. Mining costs are also really high.

What are the Benefits of Gold Mining Stocks?

​Since you aren't actually trading in physical gold, there are no worries concerning storage of the precious metal.

What are the Disadvantages of Gold Mining Stocks?

​Stock market prices tend to affect the price of mining stock more than the price of gold. Also, there is very little protection for mining stocks.

Should I Invest in Gold Futures and Options?

​Investors seeking short term ROI favor this type of investment: gold futures and options. These are essentially a series of derivatives on the underlying price of gold. These are often used by large institutions as a kind of "insurance" to hedge their investment portfolio.

In America for instance, COMEX has been the investment hub for gold future and options. Currently, there are over 200,000 contracts traded each and every day. Which when put together amounts to 20m ounces of gold; which is truly impressive -- if indeed it is truly there! 

Wikileaks gold quote

Investors leverage on the fluctuating price of gold when signing contracts with COMEX, taking full advantage of derivative market margin system. Gold future options however attract a lot of dispute due to the naked shorting procedure employed in the sale of the precious metal.

Here, the investor does not really own the gold, and this places a sort of pressure on the market. Nowadays, trading of futures and options is mostly done over the internet, and it is the duty of the brokerage firm to provide all needed support for the client.

So far, we have discussed investment options for short term investments. There are many other options for investors looking for investments with longer gestation period. The individual Retirement Account (IRA) is a good option. We always recommend you consult professionals before making an investment move.

What are the Benefits Gold Futures and Options?

​Since you aren't actually trading in physical gold, there are no worries concerning storage of the precious metal. Relatively easy to trade.

What are the Disadvantages of Gold Futures and Options?

No safeguards in the event of economic disaster; uncertain whether these are actually backed by physical gold.

Should I Get a Gold IRA?

​IRAs (Individual Retirement Accounts) allow investors incorporate gold investments into their retirement investment accounts. Most investment experts will tell you that putting your money into gold provides top-notch security for your investments.

The IRS allows investors open a second "self-directed" IRA investment account if a gold IRA wasn’t included in the first. Of recent, IRS policies and laws allow an investor to hold several gold and silver coin bullions in an IRA account, provided that certain purity criteria are met.

china and india buying gold

Opening an IRA investment portfolio can be done without undue complexities and it can be easily rolled over from another retirement plan. Retirement plans that are eligible for a rollover include 401(k), 401(a), 403(b) and 457. Each retirement plan comes with its own tax structure, so be sure to read the fine print before making an investment move.

Since time immemorial, gold has been used as a safety check for wealth. As financial markets continue to experience fluctuations, many investors are now turning to gold to hedge their investments. It also is becoming very attractive to investors that want to shield their investments from taxation. Gold is a legal tender in all parts of the world provided that its purity level is high.

What are the Drawbacks of a Gold IRA?

Like every other investment option, gold IRA investments has its own cons. Potentially high cost of storage and the difficulty in trading it unlike with "paper gold" are the most prominent of the disadvantages.

How to Buy Gold Conclusion

​Now you know a bit more about how to buy gold, you can go ahead and check out our top 10 best gold companies or claim your free gold investing kit.

gold-investment-advice
John Wilson, Editor

eGoldAdvisor Editor is John Wilson. John is an accomplished online and offline businessman and investor. He has significant personal holdings of precious metals and also real estate.

Some time ago, John came to the painful realisation that the government does not have our best interests at heart; least of all our wealth. Read more...