Bullion is any precious metal (gold, silver etc.) in the form of coins, bars or ingots which is typically used for trade on the market. The term bullion was coined after the French Minister of finance Claude de Bullion who worked under Louis XIII. The value of a bullion is equivalent to the precious metal content and is defined by the purity and mass. The century-old technique of fire assay along with modern spectroscopic instrumentation is employed to assess the purity of the bullion accurately. This is done so that the owner received a fair price for the bullion.
In today’s crisis-ridden financial world, where banks offer pitiful interest rates and bonds paying zilch, investing in gold is a smart choice. Investing in gold bullions is easier and the cost is almost as low as investing in exchange-traded funds. So, how to buy gold bullion exactly? However, before rushing into this, there are a few choices one must make. It is important to make an informed decision on the type of bullion to invest in viz., gold bullion coins, bars, wafers or ingots. In the USA, gold coins cost more because of premium and manufacturing costs. However, bars cost less with transaction costs. Once this decision is made, the next step is planning in advance about the storage of these billions. Renting a safe deposit box in the local bank is a feasible idea. In the USA, the investor can request the storage of the bullions in a secure vault without having to worry about the hassle of storage. Finally, the investor must do enough research regarding the place from which they want to buy the bullions. One must keep in mind to select a place that offers a myriad of investment choices as well as a secure storage service. There are many online dealers as well. Also, some dealers offer a buyback policy in case the investor is low on cash, though it isn’t free. But bear in mind that the dealers may sometimes scam investors, therefore, one must choose the dealer carefully.
Gold has always had a stable purchasing power and the price does not depend on stocks. There are multiple bullions available in the market. Hence, it is imperative that the investor understand the best and safe ones to invest in. It is best to invest in the North American coins, the Canadian Maple Leaf and American Eagle bullions are the easiest to buy and sell. The 24-karat maple leaf rules outside of the US and the 22-karat eagle rules inside. The purity of the eagle is guaranteed by the U.S. Mint. The eagle can also be put into retirement accounts of individuals or IRAs. These coins are also easy to sell and are mostly bought and sold outside the US. A new coin, the American Buffalo 24-karat, was introduced in 2006, as a competition to the 24 karat Maple Leaf. This was the purest coin introduced by the U.S. Mint. However, it is not bought and sold as frequently as the eagle as it is more expensive and also not many people are aware of its existence. Gold bars are a higher investment. The usual trade for bars is 10-ounce amounts and selling them is quite a hassle. Even shipping back to the dealer could prove costly.
U.S. Mint does not sell the bullions directly, they only sell the proof version. However, the Mint website has a tool with the dealer’s location. An investor seeking to buy bullions must always compare the prices among the dealers. Coins sell at a premium above the gold’s existing price. Always look for the lowest price and then invest. It is advisable that the investor buys 1-ounce coins. The eagle comes in four denominations 1-ounce, ½ ounce, ¼ ounce and one-tenth ounce. The one-ounce coin carries a lesser premium on its spot price than its counterparts. Therefore, it is better to invest in the one-ounce coins.
Sometimes, an investor may come across some rare coins. Unless the individual has sufficient knowledge and expertise regarding these coins, it would be best not to invest in them. Two similar looking coins may have different grades and this difference can amount to thousands of dollars. Therefore. if invested without due diligence, there is a possibility that the investor may be duped. If not, the investor can get the coins graded by an expert and get a certificate of authenticity before investing.
Also, when investing in bullions, it is better to check with the dealer regarding their buyback policy. As mentioned before, dealer’s will have a charge to sell the gold. Hence, it is better to be apprised of such information as it may come in handy when the investor wants to sell the gold. There may be a dealer who sells these gold without a charge. Hence, it is worthwhile to do a complete research in this regard.
Finally, be aware of scams and make a well-informed decision before investing in bullions. Invest in trusted institutions and reap the benefits of smart investment.