Buying bullion is the easiest and safest way to invest in gold. Unlike other gold investment instruments you actually get to have the gold in your possession if you desire, and you can start by purchasing a small amount that will fit your budget. However, not all gold bars are the same, and there are a few things you’ll need to know before entering into the field of bullion buying. Consider the following tips when purchasing gold bars:
Consider Purity and Weight
Gold bars vary in size from 1/10 of an ounce to 400 troy ounces in a single bar (a denomination that is probably out of your price range). Although 1/10 ounce gold bars are the cheapest, they are actually more expensive per volume because it takes a lot of money to manufacture them. Thus, it is best to start with quarter ounce, half ounce, or whole ounce denominations as a novice investor, in order to get the most for your money. It is also important to only buy bars that have a purity of .9999% gold, or “four nines” as it is commonly called. Since it is easy to find and acquire gold bars, storing the gold in a safe pace is the biggest challenge. Consider asking your local bank about their safe deposit options, or you can purchase a high-tech safe that can be kept on your residence.
Choose a Reputable Refiner
Once you’ve decided what size and purity you’re looking for, you’ll want to deal with a reputable refiner. Some of the most well-known include Engelhard, SilverTowne, Credit-Suisse, and Johnson-Matthey. Credit-Suisse bars are produced in Switzerland at the Valcambi refinery and have been listed on the London Bullion Market Association (LBMA) “Good Delivery” list. There are also other Swiss refineries that have a reputation of excellence, including Cendres and Metaux, Metalor, Argor-Heraues, and PAMP. Many people regard Swiss refineries as being the best in the world.
Reasons to Choose Bars Over Other Types of Gold
In comparison to gold coins, bars have a much lower mark-up because they don’t have to be minted with special designs, so they are cheaper to manufacture. For this reason they are the cheapest way to acquire pure gold, and are therefore the ideal instrument for investors. Other gold investment types like mining stocks and ETFs don’t actually give you physical possession of the gold, so they don’t offer as much security.
