When buying gold there are numerous pitfalls to avoid prior to spending your hard earned money. I’ve put together a list of the top ten gold investment tips for those who are just beginning their investment and wish to maximize the worth for their money Auctus Metal Portfolios.
1.) The first tip and I think it’s the most important advice before buying gold is to look around. This may sound obvious, however, there are many novice investors that get anxious about purchasing gold, and then go to the first place they find on the internet. Do your research before buying since there could be a huge price tag if you commit a mistake.
2) Do not purchase numismatic gold coins unless you’re a collector. Numismatic gold coins are collector’s pieces and carry a significant cost over the spot value of gold. Numismatics can include very uncommon coins, graded coin, shipwreck coins, and so on. Remember, you are investing in the commodity (gold) and you’ll want the most gold you can for your dollars.
3) Make sure you buy bullion coin or bullion bar. Gold bullion is basically gold that is produced in large quantities. It is 99.9 pure gold. It comes as government minted coins, rounds, ingots, and bars. Gold bullion is a good investment because the cost of its purchase over the spot price is low. For instance, the current prices for gold are currently about $1,100 per ounce. If you were to purchase the numismatic gold coins, it would cost between $1,500 and $100,000 for one coin. A bullion coin like the American Gold Eagle might be $35 over the price of spot. A much better deal.
4) Review the different gold bullion items. Usually gold bullion that is issued by government mints like that of Perth, Australia mint or U.S. mint carry a more expensive price over gold round. Gold rounds are not considered coins because they’re not legal tender. They don’t have a face value them , like an U.S. gold coin does. These rounds are usually cheaper to purchase.
5.) Stay clear of fool’s gold. “Fools Gold” is the term used by many to describe those ETFs that invest in gold (Exchange Traded Funds). GLD is one such fund which you can invest in by your broker. The issue with these ETFs is that they do not physically have ownership of the gold you are investing in. The ETFs are derivatives so you are only getting exposure towards the gold price. The GLD is generally believed to not have the gold that they claim to possess because they don’t permit a third party audit of the gold they store.
6) Be weary of the gold futures contracts that are traded by the COMEX (Commodities Exchange). These are basically futures contracts to buy 100oz of silver per contract. When the next date comes around and the price of gold has gone up and you are able to make a profit. The COMEX too has been in the spotlight for being accused of defaulting on the delivery of gold to customers. People are also claiming the COMEX is using cash settlements instead of physical delivery. COMEX has been using cash settlements instead of physical delivery of the gold to customers. Technically, this could be considered an error.
7) Diversify your physical assets. Just like any investment portfolio you want to buy different types of gold. Don’t just put all of your money in American Gold Eagles. It’s a good idea to diversify because you never know which coins might carry a much higher premium when you sell them.
8) You can purchase different denominations gold coins. It is possible to purchase the majority of gold coins in 1/10 ounce, 1/4 ounce, 1/2 one ounce and even 1 ounce. Certain coins are also available with 10 oz or greater. It is important to keep in mind that smaller coins have the highest price due because it required more time and energy to make.
9) Beware of placing your gold into bank lock boxes. It is better to locate a secure place to keep your precious metal that no one else is aware of rather than trusting that banks will let you take your gold in the case of a bank crash. Another option is to get a heavy safe that is fixed into the earth.
10.) Never reveal to anyone you’re taking a position in the gold market. If the time comes when the gold price goes bananas and economists are expecting to take place sooner rather than later you want to make sure that your investment remains hidden to possible thieves.
This is by no means an exhaustive guide to investing in gold but it could be helpful who are just beginning to learn about investing in gold.