Gold has captured the fascination of mankind ever since we discovered it, it occupies a central place in the history of mankind. For thousands of years gold has been used in different civilizations as currency, jewelry, making idols and ornaments, etc. Until recently the financial system of the world was based on gold and since the introduction of fiat currency, gold has been mostly used for investment purposes. The abolishment of gold standard ushered in a new age of fiat currency but it also highlighted one key quality of gold and that is its ability to hold value and remain stable.
For these reasons, investors both institutional and individual invest in gold to stabilize their investment portfolios and hedge risk. If you are looking to buy gold in any shape or form then this article may interest you.
How To Buy Gold Bars And Coins In The USA
If you are looking to buy gold in the USA, there are three main options available to you:
- Purchase from a reputable online gold broker
- Purchase from a local coin shop or bullion dealer
- Invest in gold ETFs/investment funds
- Rollover a 401k to a Gold IRA
In reality, it depends on what your investment needs are. If you are just starting to invest or are an individual investor then online purchase of gold would suit you the best followed by a visit to a gold shop, if you have deep pockets and high net worth then you may be better off visiting a shop or a bullion dealer and if you are an institutional investor then you may want to buy directly from dealers or invest in ETFs or gold forward contracts and options. Many investors will also decide to go with the option of investing their 401k sponsored by their employer into a gold IRA.
Online Gold Brokers
Purchasing gold online is one of the most convenient ways of buying gold, especially if you are in the USA. For one, buying online is cheaper because online stores have lower costs because they have lower overheads. Stores have to pay for the premises, upkeep, and maintenance, etc and this adds to their cost. Online stores also have a wider range of products available and in addition to this. You can visit as many online stores as you want to compare prices, reliability, and authenticity before making the decision to purchase the gold from any specific online store. Thus online stores give a better opportunity for carrying out a proper market search before purchasing the actual gold. Whereas carrying out such an extensive search would not be possible by visiting online stores.
As applicable to any form of investment, be sure to carry out due diligence before choosing the online store. Some of the trusted online stores in the USA are GoldSilver.com, Goldbroker.com, SDBullion.com, BullionVault.com, and Apmex.com.
This, however, is not a final recommendation; you can visit these sites and carry out your own due diligence before settling for any particular online store.
Local Dealers Or Gold Stores
The second option with regards to convenience is gold dealers or gold shops where you can walk in, examine the products that you want to buy and then purchase them. Gold shops may rank lower inconvenience but they have some notable advantages over online stores.
Gold shops allow you to interact directly with the gold dealers and this allows both sides to establish a personal repo and if the dealer is good and really knows their business then the whole experience may turn out to be a very educational experience as the dealer will guide you about the usefulness and qualities of different gold products available for sale.
The downside of gold shops is that their prices may be higher because of higher overhead costs. But this may level out because you can get instant possession of your gold and will not have to pay shipping cost, so in the end, online shops end p being only relatively cheaper but dealers and walk-in stores allow buyers to build a personal repo with the dealer and allowing them to sale the gold later at a good or reasonable price to the same dealer
Once again, the above-mentioned caveat applies, make sure that you carry out due diligence and you do not have to buy gold form the first gold shop you enter into. Carry out market research at first to check which dealer has the most reputation and experience in the market.
If you are an institutional investor or an individual investor with no interest in physical possession of gold and you are looking for periodic returns then Exchange-traded funds or mutual funds may be the product of your choice. In order to purchase ETFs and mutual funds, you will need to open a regular brokerage account with any broker. This can be done online with convenience, once you have opened your brokerage account you can purchase gold ETFs. ETFs will allow you to enjoy the stability of gold without the hassle of storing it. Or taking personal possession and in addition, it carries dividends which physical gold doesn’t. You can either cash your dividends or reinvest them to increase the size of your investment.
Some of the gold ETFs to look out for in 2020 are SPDR Gold Shares(GLD), shares Gold Trust (IAU), Aberdeen Physical Swiss gold (SGOL), Granite Shares Gold Trust (BAR) and Invesco DB Gold (DGL).
Shares in all of these ETFs can be conveniently purchased online through your brokerage account. Once again make sure to carry out due diligence before investing in any particular company. Due diligence for companies may be different than due diligence for gold stores. You will have to look at the fundamentals of the companies and compare them to ascertain. Which company has the best prospects of profitability and which suits? Your needs better as each company offers different features as a way to differentiate their product in the market from others.