Investing in precious metals seems like a sensible choice for investors who want to diversify assets. However, the retail bullion market is not black and white and deserves much consideration. The decisions you need to make depends on various options, such as which type of bullion would serve you better and if it’s currently a good time to acquire some.
Consider These Factors Before Buying Bullion
If you’re new to the American bullion market, the following will give you an idea of how you can best start to buy precious metals.
Where To Buy Bullion
Read reviews of leading gold dealers. There are many sources of retail bullion online and offline, so you want to be careful. What you want in a broker or dealer is someone who has a good reputation in the business. Often, if they don’t show up on reviews, they’re likely to be a new business.
While that doesn’t necessarily mean they’re operating illegally, reviewers from reputable sources know what you need to be looking for, such as the following factors:
- Licensed to operate a business of precious metals;
- Sets reasonable prices on fees and commissions;
- Experienced in the industry for several years;
- Adheres to the standards set by the Federal Trade Commission
Legitimate brokers and dealers are also obligated to report transactions over specific amounts, such as orders over USD$10,000. It’s a policy by the National Treasury to monitor commodity exchange within the country so that the IRS can prevent money laundering.
Remember to do your research and ask the right questions. That’s also why it’s risky when trading online. Contact the Better Business Bureau to get more details on the dealership.
Which Precious Metal To Choose
If you’re a beginner to precious metals, you would want to know which ones will serve you better. The American market on bullion investment revolves primarily around gold and silver. Analyzing the demand and supply of such precious metals will help you determine which one to buy.
Gold is recognized as the most precious among the lot, and investors gather gold as a hedge against inflation. It is money itself and has many industrial uses because of its malleability, heat conductivity, and physical luster. The price of gold is influenced by the ratio of the hoarded ones and the supply, keeping the value higher than most.
As for silver, it’s a useful metal for industrial purposes. However, the price is more volatile and influenced by its demand. It can be used in photography, electrical appliance, microcircuit, and superconductor application.
Bullion Bars Or Coins
New investors who want gold tend to think that there’s only one type to acquire. There’s gold as a commodity that stock investors monitor. Then there’s bullion in two forms that you can physically own. It’s considered the best way to buy gold in the US market for investment purposes only.
Bullion bars range from an ounce up to 400 ounces. The value also may be smaller than its actual worth per ounce. Nevertheless, it has a smaller premium with the potential to sell higher. Larger bars can be a hassle to transport, though. For this reason, the production of smaller sizes ranging in 1, 10, and 100-ounce bars was made possible.
You can also buy minted coins instead. They are popular forms of both gold and silver bullions. The purity, content, and weight are guaranteed by the United States Mint that produces coinage for trade and commerce. Most of these bullions also range in sizes from 1/20 to once full ounce. Bullion coins are more affordable and highly liquid. They’re convenient and easier to liquidate.
Track The Actual Cost Per Ounce
Knowing when to buy investment bullion will help you make sure you’re getting your money’s worth. It will also help you spot authentic gold and silver while browsing through dealer websites. What you want is to buy low and sell high. Spot prices of gold, silver, and other precious metals go up and down every day.
You can easily monitor through legitimate online sources that feature the prices and the trends that influence them. Aside from websites, you can also check through downloadable apps for mobile devices. Major markets in New York, London, and Hong Kong produce data that these trackers also include in their interface.
Investment bullions in retail are easily attainable. They come in small pieces of bars and coins that are regulated by the government. However, the value is influenced by the demand for precious metals, trends, and even the location. Nevertheless, precious metals—gold, especially—are held in high regard as protection against inflation as they are money.
You can acquire these investment pieces from legitimate brokers, banks, and dealerships with the authorization to operate under strict laws. Protect yourself and your investment by being vigilant.
Interesting Related Article: “Guide Through A Planned Retirement with Precious Metals“