When it comes to buying gold, there are several ways one can go about it.
We want to help you understand your options so that you can make a good decision or take advantage of an opportunity when it comes your way.
Scrap Gold
Scrap gold can be found in all kinds of places. Strategizing and searching for scrap gold has become a popular investment due to it’s low-risk nature. The potential reward far exceeds the low risk involved.
You can find scrap gold in cell phones, telephones and computers. You can find it at auctions in your area, internet auctions and local pawn shops. You can either store it as an investment or save it for when you need it. This is one of the best options for beginner gold buyers.
Gold Bullion
When inflation happens, money loses its value. Gold does not.
To invest in gold bullion, you have 3 choices:
- Gold Coins: Gold coins present an additional value to their gold content, making them a most valuable investment. Gold coins can have rich historical context from a variety countries from around the world.
- Gold Bars: Gold can be purchased in bars that are typically 99.5-99.99% pure gold. Some popular refineries that stamp their names on the bars they create are Credit Suisse, PAMP and Metalor.
- Gold Jewelry: Buying gold jewelry can be thrilling because you can come across old jewelry at estate sales and auctions where their worth isn’t realized. Generally, the older the jewelry, the more value is attributed. One downside to investing in jewelry is the exceptional craftsmanship that you pay a little extra for.
Gold Futures
Gold futures are legally binding agreements that say you will receive gold for your money at a future (agreed upon) date and price. Units come in 100 troy ounces and can be bought via COMEX or e-CBOT. They will keep a small percentage as a commission.
For newbies to gold investing, gold futures present an extremely high risk as they are likely to lose money on them. This is more speculation than investment.
Exchange Traded Funds
ETFs are purchased via stockbrokers. You can purchase ETFs the same way you would buy any other stock or mutual fund using the same broker. Since you don’t have the ability to physically handle and control the gold, some gold investment purists are against this idea.
Like Futures, ETFs include commissions when you buy and sell and you will have to report your earnings which means you pay taxes on the increase.
We’re not here to say which method will work best for you. Gold buying is an exciting journey and finding scrap gold has turned into a hobby for enthusiasts out there. Take a look at your funds, examine your assets, consider how much risk you are willing to take and make a decision!