Buy Gold – News

One of the most popular questions that new gold investors ask is, “what kind of gold should I buy?’ Unfortunately the answer isn’t really a straight forward one. It all depends on what your goals are or, why you’re interested in buying gold in the first place.

It helps to understand the different ways that you can buy gold first.

Physical Gold

If you’re looking to hedge financial uncertainty or to take advantage of price movements, then buying bullion coins will serve your purposes.

When buying physical gold you do pay a premium (a percentage over the spot price with 1 ounce gold coings) but you do get that premium back (partly) when you go on to sell the gold. You own the physical gold, you know it’s there 100%. If there is any sort of financial meltdown in our economy you still have your physical gold. And the government doesn’t need to know about them either (purchases under $10,000 or sales up to 25 ounces don’t have to be reported). Just make sure you buy from reputable dealers.

But don’t forget, you need to consider shipping costs when buying the gold and then you need to store them somewhere, whether that be a safe at home or a safety deposit box.

Gold ETFs

Gold Exchange-Traded Funds are traded like funds or stocks and the benefit of them is that they are fast trading with a low premium over the actual gold value. When investing in these though you need to take in to consideration the quality of the management and the fee structure (price vary). You really need to read the prospectus as some ETFs are not backed 100% by gold but just 90%, and other issues. You’ll need to do your homework on this one. But gold ETFs are taxed as a mutual fund which may result in a slight lower capital gain tax than if you were dealing with physical gold.

Allocated gold

This is a mix between an ETF and physical gold. You become a partial owner of a standard 400oz gold bar. The total cost of gold ownership is about the same or lower than ETFs. The gold is held as bailment, (i.e. you really hold title to it.) The good points about this form of gold investing is that you have access to instant transactions 365 days a year, the low cost, and the gold is 100% physically there unlike many ETFs. The only drawback is that you may have possibly higher taxation than ETFs or coins..

Understanding these different forms that you can buy gold in you should now be in a better position to make a decision on what you want to gain from buying gold.