Combine The Best Gold Price With Safety And Security
When discussing what’s the best way to buy Gold it has to be understood that not only is there some subjectivity along the lines of personal preference but it is also a matter of hitting a moving target.
If a person is asking about buying Gold coins and putting them in his/her pocket then that’s really a subset of the question, because from a safety perspective that may well not be the best manner in which to buy Gold.
In fact, while taking into account the issues of counterparty risk and the (hopefully limited) potential need to someday barter for goods with Gold, we would argue that actually taking possession of the Gold may not be the best idea.
Another consideration is how much Gold are we talking about? If your idea of buying Gold is to acquire a couple of 1/10 ounce coins then sure, find the cheapest coin shop in your area and go buy some. Might as well pay cash. And where a cap and dark sunglasses. Best of luck.
The U.S. is not Asia, finding a good Gold shop may not be easy – it’s not in the heart of Texas, we can vouch for that.
Protecting Wealth By Buying Gold
For our discussion purposes here, though, we are going to be talking about Gold ownership to protect meaningful amounts of wealth; not that a few 1/10 ounce coins isn’t meaningful to a lot of people.
While we certainly advocate fully allocated physical Gold we do not necessarily recommend taking possession and trying to store it at home in a safe or in your back yard. [links] We have discussed the risks with that before.
If you have a few million dollars in wealth, want to put 10 to 20% in physical Gold (not paper Gold) then you may very well agree that a secure vault is a better option than storing your Gold at home. By secure vault we mean a professional vault service and NOT a local safe deposit box – we have written about why not to store Gold in a bank safe deposit box too.
You want your precious metals OUTSIDE of the banking system.
Let’s dive in and talk about some options.
Taking Delivery Of Your Gold
If you want physical possession of your Gold then you want Sovereign coins (US Eagles, US Buffalos, Canadian Maple Leafs, Australian Koalas, Chinese Pandas, South African Krugerrands, etc). If you are concerned about a dealer reporting your sale when you do sell then it can matter which you buy, see our discussion here for minimizing reporting issues.
Note: Reporting a sale of bullion isn’t necessarily a tax issue. We always recommend obeying the law and taxing authorities. They have badges, guns and jails all taxpayer (you!) funded. Reporting, we feel, carries other risks of personal safety – just saying.
Gold bars that are sealed with an assay card should be fine, but you could run into a situation where the buyer wants a current assay of any type of Gold other than a sovereign coin which adds cost and time delay. Bars will carry a lower premium when buying.
Take note when you do buy who might buy them back and at what terms. Right today, some dealers will charge the same for US Eagles as they do US Buffalos. The Buffalos, though, will fetch a higher price when selling them back to the dealer. Buffalos are often more desirable to some buyers because they are more pure Gold than Eagles. Whether it stays that way no one knows for sure, but if buying large quantities it pays to do some homework ahead of time.
Why Gold Coins Cost More
Quite simply, coins cost more than bars because of fabrication costs. What you get in return is that the coin is easily recognizable. We will talk later about buying fully allocated Gold but NOT taking delivery. This is perhaps a better way to buy Gold not only because you get more Gold for your money (less fabrication cost) but also because you save any shipping & insurance costs. Yes, the offset is that you pay for storage but at least you don’t have to worry about fire, theft, flood, etc.
Buying Gold Locally
In addition to the risks of buying Gold locally and carrying it home, the first problem you have is finding a good local bullion shop. Sure, a pawn shop or coin dealer will have some Gold coins but if you know what you are looking for you probably aren’t going to get as good of prices as buying Gold coins online.
And there is also the danger of the salesman trying to talk you out of buying bullion coins of sovereign nations into something with higher premiums. Not that other coins MAY have higher gain potential at certain times that is not, in our opinion, the way to buy Gold for wealth protection.
Yes, you avoid shipping and insurance costs buying locally, but if you pick the RIGHT online Gold vendor you can get both the best price AND free shipping & insurance.
Buying Gold Online For Delivery
To get the best price and have access to every type of Gold bullion available you likely will buy Gold online.
There are some websites that simply sell precious metals and make arrangements to ship them to you. Others will give you the option of having them arrange storage until such time that you decide to sell the metal back or have it delivered to you, though not for free at that point.
Whenever we shop for Gold online this way we will see “who has a deal on what”; maybe Maple Leafs are selling for a lower premium currently – whatever, again, doing our homework and keeping an eye on future sell-back and reporting.
When analyzing the best way to buy Gold online (who, what, when, where, etc) be sure and add up all costs to take into account one vendor who might provide free shipping & insurance. Gold isn’t quite so bad but shipping charges for Silver can be quite high due to the weight per value.
We have done some reviews of online Gold vendors that you can peruse at your convenience:
- Texas Precious Metals (can arrange storage, but not their “specialty” in our opinion)
- OnlyGold (They sell other precious metals now too)
And other vendors who will optionally store your Gold
The Best Way To Buy Gold?
Considering that people own Gold for varying reasons there is not necessarily one supreme best way to buy Gold. But in our opinion, the best way to buy Gold has certain characteristics, which are:
- Buying Gold at the lowest possible price
- Not having to choose the exact form (such as WHICH coin to buy)
- Paying the lowest fabrication costs (premium over spot)
- Buying from the comfort and security of our home
- Using a trusted vendor
- Not taking the risk of storing Gold ourselves
- Lowest hassle
- Hassle free selling when the time come
Did you notice that last one?
Unless you intend to be the old hermit living in the shack with $7 million in Gold under the floorboards and in boxes out in the garage, SOMEDAY the price of Gold will be unrealistically high, and we will SELL.
Ever thought about HOW you are going to sell your Gold?
Are you going to make your deal online or over the phone, head down to the US Post Office and insure your shipment, then wait on pins and needles until the buyer contacts you and admits that, yes, we did receive what you claim to have sent (what do you do if they don’t?)
So What Gold Vendor Meets These Criteria?
For us, we still think the best way to buy Gold is to simply open an account at BullionVault (yes, they accept Living Trusts unlike GoldMoney), transfer some money and then place your orders to buy precious metals – you can even use limit orders.
Does this meet EVERY need for EVERYONE? No. But if you have no other Gold and want to get started, do it quickly, and know that you did not overpay for the metal, we think BullionVault deserves a place in most everyone’s portfolio (again, NOT investment advice).
BullionVault is free to open an account and will (probably, no guarantees) even offer you a nice signup bonus like some free Silver.