More tips to buy gold

Gold is a great investment option, more so now. The U.S. economy is yet to recover from the over $1.4 trillion deficit, which in turn has turned the American dollar feeble. Since the dollar is the dominating currency, many people the world over are turning to gold as a hedge against economic uncertainty. Gold can well be the only constant when stock portfolios implode.

eye of a girl with gold color hair

The best time to buy gold is when current market prices have depreciated a bit. However, there are various other factors that come into play if you want to purchase gold at slightly lower rates. These are:

  • Opt for gold coins or bullion that is available at a maximum premium of 8 percent: Do not pay too much for the gold you want. The average price of gold over the years has been $400 an ounce, adjusted for inflation. When there is economic turmoil, the price of gold shoots up, leading to a bubble that won’t last when the economy improves over time. When this happens, gold rates will go back to the pre-bubble range. It is recommended that you not purchase gold that is only being offered well above an 8 percent premium over the current spot price for an ounce.
  • Choose certified dealers who outline purchase minimums, but also offer discounts on higher volumes of gold, and/or free or cheap handling and shipping charges.
  • Many people believe high profile gold firms or companies that advertise heavily are good choices. This is not always the case. Advertising campaigns are expensive, due to which their costs are included in the rates investors have to pay for coin or bullion. These markup rates can be as high as twice the real value of the gold.
  • When choosing gold coins, go for the bullion varieties rather than collectibles. Collectible coins, although sometimes profitable for selling purposes, are not recommended if you don’t have adequate knowledge about evaluating and grading them.
  • Gold of a lower value may be more affordable at the outset, but it trades less often. This means you will only end up paying a higher premium for the in the long run.

Note: Ensure that you buy gold only from established dealers, banks, and other institutions that offer a reliable guarantee of purity, weight, and content. You can also try online auction sites like eBay if you have in-depth knowledge about ascertaining the purity of a gold item and separating the wheat from the chaff.

Five tips to buy gold at the best price

Everyone wants to buy gold at cheap rates regardless of current prices. Some bonds and stocks, and even mints, online sellers, and antique dealers come up as options. However, the collector’s gold offered by such sources is not always pure. So how can a serious investor buy gold at good prices?

eye gold

1 – Factors that affect gold rates

Before deciding to buy gold at ‘bargain’ prices, one must be aware of the dynamics that influence rates. These include:

  • Gold quantity and quality
  • The form of gold on offer
  • The source of the gold
  • The dealer

2 – Buying physical gold

It is recommended that investors buy gold bullion or coins of a significantly higher weight/value, since purchasing high-demand coins such as Krugerrands ensures that their prices appreciate faster and yield better returns. Buying gold of a lesser weight/value may be easier on the pocket at first, but will yield lower returns in the long run. This is because storage, insurance, and shipping costs are passed on from the mint to the seller, which eventually reflects in the retail price. To summarize, this makes bullion or coins of a higher weight more desirable since they have fewer price mark-ups and are more inexpensive per gram.

3 – Purchasing gold online

If you would rather buy gold from the convenience of your home, take note: make purchases only from accredited dealers who are part of the World Gold Council (WGC). You can find out more about these dealers on the WGC website to avoid getting cheated or scammed by unscrupulous or fake online vendors.

4 – Going straight to the source

Travelling to a gold mine sounds like a ‘far off’ idea, and it is. However, the fact is that gold prices are cheapest when the metal is just mined, because there is no value chain involved. Entrepreneurs and businesspeople in particular can consider opening dealerships in a gold-producing nation to make the most of low costs due to closer proximity to mines.

5 – Buy gold after its price has fallen

The best time to buy gold is, of course, when its rate depreciates a bit. However, don’t wait for prices to hit absolute rock bottom, as there’s no telling if anyone can get assumptions down to the T.