USCF Sections

Investor's Guide To Buying Gold.

Article By : Patrick Mansfield | U.S. Consumer Finance
Paymenst For Bullish Articles

Every Form of Gold Is Different:
Gold investments come in several forms such as bullion, coins, mutual funds and stocks. 
Bullion Coins and Gold Bullion.

Bullion is assessed by its weight, and it is cast in coins, bars, and ingots from a bulk amount of gold or other precious metals. Bullion can be purchased as an investment from precious metal dealers, certain banks, and brokerage firms. A bullion coin is valued by its precious metal content, and its price directly correlates with daily world market fluctuations for precious metals. Since 1986, silver and gold bullion coins have been produced by the United States Mint. Platinum bullion coins were not produced until 1997. All bullion coins' content, purity, and precious metal weight are guaranteed by the United States Mint. 

Collectible Coins

Coins are collectible if they hold aesthetic or historical value. A collectible coin's market value, or numismatic value, greatly exceeds its metal content and face value. Collectible coin dealers often use a professional service to grade valuable coins; however, grading can be a subjective practice. 

Gold Mutual Funds and Stocks

Two common gold investment methods are purchasing shares in a gold bullion-investing mutual fund or stocks in a gold mining firm. There is no need to make storage arrangements, and these gold investments are usually more liquid than gold itself. However, gold funds and stocks have innate risks, and their value can drop regardless of gold's current price. Investors should only buy these gold investments from commodity brokers licensed by NFA, or National Futures Association, which keeps a public record on all brokers and firms' disciplinary history and registration status.

Gold prices constantly fluctuate, so gold is not guaranteed to hold or increase in value. Also, all gold dealers charge more for a product than the product's actual gold value. So, investors should do a price comparison before investing. 

Investors need to be aware there are no Treasury Department regulations or federal laws at this time that give the government authority to confiscate gold. Some sellers claim that only collectible and historical coins are safe from confiscation to charge buyers far more than the value of historical coins. 

Research Before Investing:

Regardless of the gold product, investors should research and avoid risks before making a purchase by:
  • Asking for a coin's melt value, which is the coin's value when melted and sold. This information is widely available.
  • Ensuring the gold is insured and it is of the promised quality if the investor cannot physically take delivery at a secured facility.
  • Obtaining transaction receipts.
  • Seeking independent appraisals for each gold investment.
  • Staying away from sellers who downplay risk disclosures.
  • Talking to a reputable financial adviser or dealer who has gold market knowledge.
  • Taking account of additional costs such as insurance, off-site storage and safe deposit boxes.
  • Turning down purchases when the dealer pressures the investor to buy now.​​
Share by: