The Procedures of Buying Gold Bullions in the United States

By | July 31, 2017

Introduction

Nothing is complicated; it only may not be understood. Such is the explanation applicable to how many people perceive buying gold. It seems like a complex process that requires large processing. But, in reality, it can be as simple as any other investment you make. Yes, there are many shady dealers who are out to get you if you get a step wrong, however, they can easily be identified and there are surefire guides that if followed closely, will guarantee the authenticity of your investment. For this particular reason, I am going to begin by discussing processes by which you should NEVER buy gold coins, gold bars or gold bullions. While I am not claiming such all such procedures are always scams, they are too volatile and subject to manipulations and there is no reason why you should take such risk since there are safeguarded ways to buy gold bullions in the United States.

Unsafe procedures for buying gold

Expensive Price

When it comes to gold bullions, prices vary in the United States depending on the channel. However, remember gold is a product like everything else and it has its cost. Ensure you are not overpaying for the bullion gold you are buying. One way to make certain of this is to browse the spot price of gold. Anything beyond 8% of such price is extreme and you should run from it. Authorized purchasers won’t sell at beyond this mark even when they are selling directly to the public. Just because it is gold doesn’t mean the price has to be unreasonable. Don’t be deceived by thinking, ‘if it’s expensive, then it’s real’.

Historical worth

It can be tempting to appreciate gold bullion based on its historical value but you must ensure that you operate within the current market statement. Gold coins, gold bars, and gold bullions have numismatic value that dealers can leverage on. Buy gold based on the melt-value and not sentimental historic value. The melt value is the worth o the gold as metal. You can compare this to the melt value of silver bar, silver bullion and silver coins. When all is said and done, it will only be about the metal, not about a story. Purchasing gold isn’t similar to buying auctioned items so you want to do your research to know the actual value of what you are paying for. Dealers have been known to hike prices by over 60% for this reason only.

Paying Premium for Proof Coins

The worth of gold bullion is in the gold and not the dressing that follows it. Special edition coins like proof coins do not have sustainable value if your gold bullion is for investment purposes, you are better off with the regular coins. Of course, collectors usually have proof coins more than the regular, especially if it comes with mirror finishes and is pretty. But, paying more for proof coin is purely about luxury. The price is usually inflated and you don’t see the point of it eventually. When investing in gold, the plainer and less expensive, the more sustaining.

Fractional Coins

You are bound to pay a higher markup for fractional coins that for coins that come in single-digit ounces. It can come in half ounce, quarter ounce, one tenth ounce and many more. The only reason to have such coins is in a worst case scenario where paper money becomes irrelevant for regular transactions and you need gold to pay for toiletries, food, ammunition and so on. Such meltdown is unexpected and you shouldn’t spend your hard-earned money to invest in it.

Cold caller

If you have ever brought any product just because the salesman was nice, then you should be very careful with this one. On the surface, it seems like no one would convince you to invest your money to buy gold bullion over the phone but these callers use high-end and highly persuasive tactics. They will appeal to everything to make their case and they can be successful if you are not well equipped with accurate information about gold investment. Such salespersons usually have their gold online and people hardly see the physical product even after paying. They claim convincingly to hold it in a safe vault.

Confiscation scares

Never buy overpriced gold because you are afraid. To begin with, the US hasn’t been on gold standard since 1971 and there is presently no limit on gold ownership. This means you are free to have as many gold bullions as you can afford and you don’t have to fear that it will be taken at any time. Even when President Roosevelt gave the order to collect gold from US citizens, people weren’t ‘forced’ to turn in their gold, many did in fact, keep it. So, any gold dealer that scares you by threatening with dangers of gold confiscation isn’t authentic or real. Moreover, not all rare and unusual coin has numismatic value.

Leverage

When the paperwork is immense and you can’t make sense of it, desist from it. If you intend to borrow money to invest in gold, you are pulling a big risk card. Buying on margin allows you to invest particular amount of money in buying gold and then you leverage your investment based on possible ratio. Sometimes, it can be as high as five-to-one. While it looks like you are controlling a lot at your end, the price of gold can be quite volatile and if things go south for you, you may have to pump in more money to retain the initial investment, sell a part of it or all of it. The consequence of this is that the value of commission you pay for the investment is really high. On paper, it may not be more than 5% but when compared to the actual money you had in the investment, it may be up to 20%. Moreover, you will pay interest on the money you borrowed to have a higher investment regardless of what the market is saying and your investment will also be leveraged. When you consider all the things that could go wrong by leveraging, it is just better to follow the age old adage and cut your cloth according to your size.

Safe procedures for buying gold

Now that you know how not to buy gold, it is important that you know how to. You have to understand the steps involved in buying authentic gold authentically.Gold purchase doesn’t have to be a task that is out of this world. There are several sources to authenticate any information you come across as you journey towards investing in gold and you can never be too careful when it comes to this matter.

Define your goal

Why do you want gold bullion to be part of your collections? Is it for investment or showcase? If you are just beginning to show interest in the gold business and you need help, one thing you must settle is that you can become a pro t it. You only have to answer essential questions that will help you determine the selection of your dealers, sellers and many more. If you take time to know the basics, and you easily can from several sources online and offline, you will avoid the mistakes that thousands of people in the United States make when they want to invest in gold. There are also comprehensive official and individual reports on gold coins, gold bars and gold bullions. One of such materials involves the book, ‘The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold’. You can access this material online through popular retail outlets like Amazon, Barnes and Nobles and several bookstores.

Decide how much you have for investment

It is always safer to invest inphysical gold than in virtual gold and its other counterpart. You can never regret investing nothing less than 10% on physical gold. The best part of such investment is that it doesn’t get devalued with currency. So, if the monetary system fails, your personal preserve of gold will see you through. Whenever you have money that you do not need at the moment, especially after removing the equity in your home, you should best invest in gold.

Synchronize your choice and your goal

Historical gold coins are the low quality kinds that are bullion-like and they track gold price. Contemporary gold bullion is what is prevalent in the market at any point in time. You should decide on which portfolio you desire and can also combine the two at your preferred ratio. There are several materials to help you decide which one you would prefer and for what reason. However, if you don’t have a clearly defined goal on what you really want, it may become difficult to decide which is suitable for you and why. You must always have a mental picture of the kind of gold investment that you desire and follow such picture strictly.

Choose an appropriate gold firm

The firm you choose to transact with when you want to invest in gold bullion to a large extent determines the success rate you will record. Many stories of scams and cheatings originate from people not running a background check on the firm they choose to deal with. There are several genuine ways you can confirm the claims of any gold firm. A simple step like checking at Better Business Bureau and reading reviews about such firms will give you an accurate idea of who they are and what they can do. Several bad experiences could have been avoided if people had paid more attention to these simple things. Eventually, your choice of gold firm determines the destiny of your gold investment, so, don’t joke with it.
Decide based on information
There are several sweet talking salespersons that will tell you your research doesn’t matter based on your limited exposure. There is no such thing as limited exposure for anyone that has done his homework as regards buying gold bars, gold coins and gold bullions. Even as a first time investor, rely more on the truth you have gathered through research than on a highly experienced and excellent gold salesperson that has contrary opinion to offer.

Tips for selecting a gold firm

The points stated as precautions and procedures for buying gold in the United States may seem common to all but when you note the rate at which people are being swindled over gold investment matters, you will realize many downplay the importance of these simple points. That said, here are tips to help you select a gold firm that will serve you well:

  1. Listen to what previous consumers say about them
  2. Check out their official certification and accreditation
  3. How customer-friendly are they?
  4. Is their offer over priced or underpriced? If it is any of these two, avoid.
  5. Do they operate based on facts or speculations? If facts, choose, if speculations, search further

Conclusion

If anything has been noticed when it comes to buying gold bullions the authentic way, it is that the task is not quantum physics. Anyone can learn how to invest in gold wisely and genuinely if they really want to. The real challenge is not the supposed complexity of the gold market but rather, people’s unwillingness to dig deep before putting their money into the venture. There are several authoritative bodies you can follow regularly for updates that can help you make informed decision. You can’t miss it by doing this religiously and no high-sounding salesman or cold caller will be able to make you sway. Yes, gold investment is a sensitive matter. But you can be the pro with resilient commitment. Don’t be greedy. Yes, gold has ever-increasing value but when it comes to gold as an investment, the market can be tough at times. Learn to be patient as you watch your investment yield golden returns.

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