In Gold We Trust - How to Buy Gold
This page is to give suggestions on the different ways you can invest in gold and hopefully dispel some common myths people may have.
Increasingly people are seeing investing in gold as a way of preserving their wealth in these troubled times. However for people who have a large chunk of wealth that they want to preserve how safe is it to have tens of thousands of dollars worth of gold coins in your house with the risks of theft, home invasion and government confiscation ( see risks section for more details). Yes you do want to have possession of some gold (gold coins or gold bars) but if one of your objectives is to simply preserve wealth then it might be worth considering other options.
Some companies - most notably GoldMoney will buy gold bullion for its clients and then arrange secure storage in Switzerland or London (Switzerland has no history of government confiscation!). The user simply opens an account which they can fund from a bank account from anywhere in the world . Once money is in the account the user can go online and purchase however much gold silver and platinum bullion they wish. There is a small annual fee for storage (roughly 0.12%).
GoldMoney is independently audited for the gold they hold on behalf of their clients.
Numismatic Gold Coins
Numismatic gold coins are gold coins that have a collectors premium on the price. This premium can start at 20% over the spot price of gold but can run to thousands of dollars. You would need to do your homework to navigate your way safely around the numismatic market. As the price of gold increases so does the premium so it is a way to leverage your investment. Additionally numismatic gold coins are considered exempt from government confiscation as they are collectors items. One downside is that they are not effective as a crisis hedge because in the event of financial collapse or crisis you may see the collectors premium also collapse.
Semi Numismatic Gold Coins
What is considered a semi numismatic gold coin can vary from one dealer to another. Principally they are gold coins that are trading at a premium of 15% or above. However the problem comes with the fact that some people might sell one coin at 15% over spot and someone else will sell it at only 5% over. At the most broadest interpretation semi numismatics will include old US gold coins (e.g. Saint Gaudens) and European gold coins (Swiss Francs, mtid=824&kw=lg" target="_blank">British Sovereigns, German Marks etc).
The good thing about these coins is that in 1933 they were not on the list of gold items to be confiscated so the same might be true in the event of future confiscation. They also come in small denominations (a half sovereign has just over 1/10th of an ounce of gold) and are more available that other fractional gold coins such as 1/10th ounce American Gold Eagles or Gold Pandas. Coin, Bullion and Scrap Gold Calculator helps you easily find out the current value of the different coins. The Metals & Coin info page will tell you the gold content of any gold coin
Reputable coin dealers will carry semi numismatic gold coins.
Gold Bullion Coins
Coins such as American Gold Eagles and Canadian Maple Leafs are in heavy demand, this demand makes it a highly liquid market. You will pay a higher premium for these coins but you have the security that they are widely recognized. The Coin, Bullion and Scrap Gold Calculator will help you keep track of the current market value of your gold bullion coins.
Buy Scrap Gold/Jewelry -
As strange as it seems buying gold jewelry maybe one of the best ways of getting into investing in gold - especially if you do not have too much money. Whether it is 10 k 14 k 18k and so on its value will always reflect the current price of gold and you can buy small wedding ring s that are 2-3 grams. it is probably one of the best hedges against gold confiscation - jewelry was not confiscated in 1933 - and can you really see the government going around trying to take everyone's wedding rings away!!
When we talk about buying jewelry as a means of investing in gold we are not talking about buying it new from stores or even second hand from an antique shop. The wedding ring I am wearing (as much as I cherish it) is 14 karat , weighs 7 grams and therefore has about $140 worth of gold in it. The department store I bought it from charged me over $1000.
Ebay is a great place to buy scrap gold - this will often sell for 5-10% above the value of the gold in the jewelry. Alternatively your second hand jeweler or coin shop may buy old jewelry. They will send it off to the refinery and get 95% of the gold value so might be willing to sell it to you for spot price or 5-10% above.
The Metals & Coin info page will tell you the gold content of different types of scrap gold jewelry and The Coin Bullion & Scrap Gold Calculator will give you the current market value for the different types.