How To Buy Gold: 3 Easy Steps To Securing Your Future

Wondering how to buy gold? We share all the ways you can invest and how to get started adding physical gold to your portfolio.

Gold is all over the news. Goldman Sachs recently shared that gold is a preferred hedge against geopolitical and financial risks. And, Morgan Stanely mentions that “an allocation to gold as a component of a diversified portfolio may be worth considering.”

So, how do you actually buy it? This article covers the different ways you can invest in gold and how to get started owning gold to protect your wealth.

Physical gold

One of the best ways to invest in gold is to own physical gold coins or bars. When you actually own the physical asset, you get all the benefits of gold investments but with these specific features:

Direct ownership

You directly own the gold bars or coins you buy. You don’t need a digital platform, a broker, or a bank involvement at all. Owning physical gold means you control these assets without any third-party involvement.

In the Reddit r/Gold forum, user Therealawiggi shares their reasons for investing in physical gold:

“For me it reinforces the habit of saving money/building wealth. The tangibility of physical gold as an asset is very rewarding too. Also funds based on gold price have management fees as a percentage which can really eat into your profit long term.

Also holding physical gold eliminates a lot of counter party risk. You won’t need to rely on another entity to hold up their end of the deal in order for you to access the asset.”

Portability

As of this writing, an ounce of gold is worth $2,637. A one-ounce gold bar is about the size of a Domino but slightly thinner. So you can easily carry thousands of dollars in your pocket with gold. You can also sell gold in most countries, so the size and easy conversion to cash make portability a huge benefit.

Durability

You can’t easily destroy gold bullion. It doesn’t tarnish, corrode, or degrade over time which is very different from other tangible asset than others like real estate.

Privacy

When you buy gold bars and coins, there’s no inherent digital records of your holdings. And, if you store your gold at home, you can keep your investment portfolio private and secure. Gold dealers might need identification for large purchases due to anti-money laundering regulations, but there isn’t ongoing digital government reporting.

Note that if you store your gold in a bank or in a depository, they do keep digital records.

No cyber risk

Since bullion coins or bars don’t rely on digital systems, your gold investments are immune to cyber attacks or outages. You don’t need an internet connection or a secure password to access your assets.

Ways to own physical gold

You can own physical gold in different forms and in different account types.

Forms

Pure gold bullion comes in the form of bars and coins. If investors have a smaller amount to invest or they just want portability, they’ll usually look at gold coins. You’ll find that coins come in different weights like 1 oz, 1/2 oz, 1/4 oz, and five of the most common include:

• American Gold Eagle

• American Gold Buffalo

• South African Gold Krugerrand

• Canadian Maple Leaf

• Chinese Gold Panda

For investors that have a larger amount to invest or need physical gold that’s easier to store, pure gold bars can make sense. Bars aren’t as fancy as coins, but they stack easily, and you can buy them in much larger sizes. The most common bars that our customers buy include:

• Credit Suisse Gold Bars

• Johnson Matthey Gold Bars

• PAMP Gold Bars

• Royal Canadian Mint Gold Bars

• Perth Mint Gold Bars

Account types

You can buy gold with retirement funds or just with regular non-retirement money. If you want to use retirement funds, you’ll either roll over your 401(k) or existing IRA or set up a new IRA. These funds now become part of a Gold or Precious Metals IRA. There’s a few different rules with these accounts, including:

• Custodian: You’ll choose a self-directed IRA custodian to meet IRS regulations. This company manages the funds on your behalf but you tell them what to buy, sell and when.

• Access: You won’t be able to physically possess your gold until retirement age. The reason is that the IRS considers holding the gold as a distribution, which creates tax implications. Your IRA custodian takes care of securely storing your gold in an IRA-approved depository.

• Approved metals: The IRS also has certain rules about which gold or precious metals you buy. Most of these requirements are about the purity of the metals and also to make sure you don’t buy collectible coins which hold more risk than gold bullion.

If you buy gold outside of retirement accounts, none of these rules apply.

Other ways to buy gold

You can also invest in gold paper assets like:

Gold funds

Gold mutual funds or gold ETFs are a way you can get exposure to gold without actually buying gold.

Mutual funds

Mutual funds invest in physical gold bullion, gold futures contracts, gold mining companies or refining company stocks. Professional fund managers handle the overall investment portfolio management of these assets. You don’t have control or say in what they buy or sell and you have exposure to risks like recessions and poor company performance.

ETFs

Exchange-traded funds (ETFs) invest directly physical gold bullion or gold futures contracts and each unit represents one gram of gold. You can buy and sell shares on the stock market. The drawbacks are that you only receive a paper or digital document for your investment. There are also multiple parties that manage these assets which increases third-party performance risks.

Gold futures

Gold futures contracts are a speculative way to invest in gold. Each contract represents 100 troy ounces of gold and gets traded on commodity exchanges. Futures trading happens 24 hours a day, five days a week, and you can buy (go long) or sell (go short) contracts. Since gold prices fluctuate, prices change in real-time based on market conditions.

Because these contracts include leverage, you can lose more than your original investment.

Gold mining companies

You can also invest directly in gold mining companies. In this case, you own shares that you can trade on the stock market. The challenge with an individual gold mining company stock is that you must rely on their performance.

Buying physical gold in 3 steps

If you want to buy physical gold or any other precious metal, the steps are pretty simple:

Step 1: Choose a gold dealer

Start by picking a reputable dealer who provides resources to help you make the best decision for your needs and safely buy metals. Look for a company like Swiss America that’s been around for decades and has great customer reviews.

Step 2: Buy gold

Next, you can decide which gold coins or bars you want to buy. Most investors stick with gold bullion versus collectible rare gold coins or other numismatics.

Step 3: Manage

There’s not much to managing your gold investments, but you do want to buy insurance and make sure you store your gold securely.

Why investors choose Swiss America

Thousands of investors work with Swiss America to invest in gold and precious metals. Some of the reasons why we’ve been around for over forty years include:

Resources

We provide investors with educational resources to help you make decisions about your investments. You can read our in-depth research reports, listen to our podcast, or sign up for our daily gold industry news.

Support

Our happy clients rave about their experience working with our expert team. You’ll get friendly service, quick responses, and fast shipping of quality metals. If you are looking to convert a portion of your retirement account to a Gold or Precious Metals IRA, we can help you easily complete this process.

Client portal

Our investors also get access to an online portal to view their transactions and portfolio value in real-time. You’ll also get personalized investment recommendations and buy-back quotes if you’re considering selling gold.

How do you buy gold final thoughts

You have many options to add gold to your portfolio. One of the best ways is to diversify with physical gold coins or bars. No other gold investment type gives you the same independence, simplicity, and separation from the stock market paper assets.

To learn more about investing in gold or other precious metals, contact Swiss America today!

How to buy gold: FAQs

What is the safest way to buy gold?

The safest way to buy physical gold is to work with a reputable dealer that’s been around for several years and has great customer reviews.

How much gold can you buy for $1000?

As of this writing, the spot price of gold is $2600/oz so you can buy smaller gold coins like 1/10 ounce or 1/4 ounce American Eagles.

How can beginners buy gold coins?

You can work with a gold dealer to help you make the best choice for your situation. From there, you’ll open an account to buy your gold, receive it from the dealer and safely store it.

Note: The information in this post is for informational purposes only and should not be considered tax or legal advice. Please consult with your own tax professionals before making any decisions or taking action based on this information.