What is the best way to buy gold:- Political uncertainty and the potential for slowing global growth have made gold investment more desirable. The increasing demand for gold has hoisted the price of gold.
No wonder that gold is sought after because gold is one of the safest investment instruments. Gold has a value that tends to be stable and provide high yields when the economy deteriorates.
For those who are interested in investing in gold, now it is not difficult to do. Quite a lot of channels can be chosen to invest in gold. But first, you need to determine what form of gold you want to buy.
Such as you want to buy the jewelry or you want to buy the coins or the bullion. If your intention is to gain profit, it is wise to invest your money in buying the gold bars and coins. If you want to buy it as jewelry, you can possibly visit the gold shops.
Table of Contents
Should I buy jewelry? Which is better: coins or bullion? Method 1: Buy Gold Pieces Method 2: buy Gold Bullion Method 3: Purchase of gold exchange investment funds Method 4: Online Purchase
Should I buy jewelry?
In older times, this was the most popular way to buy gold. Only then, and now, the price at which it will be possible to sell jewelry may not be very profitable even if the metal itself rises in price.
The fact is that buying any work of art, you may not only – and often not so much – for the material. But also for so tangible things: origin, quality of work, authorship, etc.
Sometimes this can be a profitable investment, sometimes no, but if we talk about the price for the metal, the buyer greatly overpays.
Which is better: coins or bullion?
Another option is to buy gold coins or bullion. If you choose two, then ingots are worse than coins.
When buying them, VAT is charged, which immediately worsens the position of the buyer, if it does not deprive the operation of meaning. And this is not to mention that the price established by the bank for the sale of gold bullion may differ significantly.
Investment coins are not subject to VAT, but on the other hand, the price of their purchase by banks is sometimes so much lower than the sale price, as if the tax is still paid.
However, with long-term investments, if a coin was purchased at prices close to market quotes of gold, this nuance may not be so important.
But another problem arises: after years, the bank may not accept bullion or a coin at all, picking on their appearance.
Read Also: How Many Grams Is Equal To 1 Tola Gold In Nepal
So, when buying physical gold, you need to consider the conditions under which it will be stored. People who thought that coins could be buried in the old fashion somewhere under an apple tree were sometimes very disappointed when they tried to turn them over to the bank.
4 Best Way To Buy Gold
Method 1: Buy Gold Pieces
Investing in gold scrap is an alternative route used by investors with time and knowledge to achieve modest returns. They buy gold-plated items or broken jewelry at a lower price.
Gold refineries or shops where it is exchanged for money can pay a good value if traded properly. The benefit of buying the gold scrapes is that it has the ability to make money without gold prices rising. therefore it is the low-risk investment for you.
However, you need to look out and search for reliable sources which a lot of effort. It is also difficult to know the amount of gold for each item.
If you have less money and still want to buy gold, this is the best possible way. You can buy gold pieces in the form of jewelry which possibly is a low-risk investment when the price of gold is rising constantly.
In fact, you can buy the gold pieces in the form of rings, bracelets or other jewelry and keep it safe for a variable time period. It is the low-risk investment that is ideal for new investors or for those who want to save money safely and without devaluing it.
There are numerous gold shops that you can trust where they can even issue the certificate of authenticity along with the gold piece that you buy.
You can ask for the bill after you purchase the gold so that you can sell gold whenever you are in need or when you want in the same shop where you have bought the gold.
It is best if you buy the gold piece from the jeweler whom you know for a long time or where you have done your transactions for a long period of time.
The advantage of buying the gold in this way that you can have gold in your hand as soon as you buy it. You can buy the gold with care and inspect it with your own eyes. Or you can even take the expert with you to check the purity of Gold.
However, if you are the first time buyer, the chances are that you may be tricked into buying the fake gold or the less weight gold.
Family and Friends
If you don’t want to buy the gold from the shops, you can always ask your family, relatives, and friends if they want to sell their gold pieces.
Many people have the gold ornaments stored that they don’t have any use such as broken chains, rings or earrings, and bracelets.
Purchasing these gold pieces from your known people, family, and friend circle will yield you the precious metal in the acceptable price that you can afford. And there is a lesser chance of any fraudery or cheats.
The benefit of purchasing gold pieces in this way you can have the old jewels in your hand and you can inspect the quality of gold with your own eyes. You can have gold as soon as you purchase it.
You can always put an advertisement in the paper
This is not a common method that is practiced here in Nepal. However, you can always place an advertisement in the most popular local newspaper in your region.
Correctly place the information that you need, what is your budget and what documentation you need as evidence of authentication of the gold piece. There are people who would review the ads that have been placed in the newspaper and will respond to you as per their needs.
The disadvantage of buying gold pieces this way is you can be cheated into buying the fake product or less weight gold. It also creates a nuisance and consumes more of your time as many people may respond to your advertisement.
However, if you are in search of some rare and antique pieces that you can’t find in any shops, this can be the perfect way for you to gain the chance to have that product in your hand.
Read Also: What Is The Gold Price Per Tola In Nepal? How To Know Today’s Rate?
You have to be very careful and should be an expert to recognize the authentic gold. If you are the beginner it is best that you don’t buy the gold in this way or you can have the expert beside you if you prefer to buy the gold this way.
Place an ad on flyers.
It is similar to the newspaper but it is free and reaches more people. This practice is also not followed in Nepal to buy gold. However, this method is popular in western nations.
The online sites can also be a better option for you to purchase the gold. There are sites where the gold ornaments are kept for auction where you can bid fro the piece.
However, here also there would be the chances for the fraud so you need o to have the experience in recognizing the authentic gold.
The benefit of buying through online auctioning is that you may be lucky enough to pay less for the piece than in the shops or in other agents. However, you have to pay the taxes before bidding.
Develop a business relationship with a jeweler.
Leave your contact information with them and ask them to communicate with you if someone comes to sell gold items that the jeweler does not want. Some smaller stores may not have a refinery or do not want to deal with gold fragments that are damaged or broken.
Method 2: buy Gold Bullion
Who did not dream of holding a real gold bar in his hands? This is possible not only in the movies. Gold bullion is sold by banks. Buying gold bullion is one way to invest long term.
In addition to gold in banks, you can buy bars of silver, platinum, and palladium. It is believed that such an investment in precious metals is one of the reliable means of preserving savings.
Gold, silver, platinum, and palladium have high liquidity and with rising world prices for precious metals, such an investment can bring additional income.
This is the long term investment that will always yield you the profit that you intended. Therefore, the experts have also suggested buying the physical form of gold in bars or coins that can be the low-risk investment for you.
Unlike, the gold pieces and jewelry, you can invest securely in this form of gold even if you are the beginner and don’t have the experience in buying and investing in gold. You can store precious metal bullion at home, which, of course, is dangerous, because they can be stolen.
For safer storage, banks offer customers the services of safekeeping ingots in a bank vault or in an individual safe rented from a bank.
It is quite difficult to name a certain price since the purchase and sale of precious metal is done by banks at their own quotes, which are set several times a day based on a number of parameters: the main one is the price of precious metal on the international market.
When buying bullion you have to pay VAT. If you want to sell the gold bullion, return it to the bank. It is only desirable to keep it in perfect condition and be sure to have a manufacturer’s certificate for it.
When selling precious metal bullion in a bank, an identity card will also be required. Banks buy precious metal bullion at the appropriate quotes on the date of the transaction. The benefit depends on the market situation.
Decide how much you want to invest and how much you want to buy
- You can choose between gold coins, gold bars, and gold jewelry.
- Gold coins: gold coins tend to retain more value, as these have numismatic value, in addition to their gold content. That is gold coins can be used as the international currency that is acceptable in all the nations. If you want to sell the gold later in a small amount, this can be the wisest choice for you.
- Gold bars: Gold is also sold in bars, which generally contain between 99.5 and 99.99 percent gold. You will see the names of the refineries stamped on the bars that you have bought.
- Gold jewelry: The word gold for many is associated with jewelry. Purchasing gold rings or earrings are the easiest way to invest in gold. There is no need to talk much about how to do this. You can buy jewelry in a store and then store them either at home or in a blank cell. But when buying gold, you must always think in advance how to sell it. When you need money, gold jewelry, most likely, will have to be handed over to a pawnshop, having received for them perhaps half the cost, maybe a little more. And so, before giving the last one for a pair of gold earrings, in the hope of saving in this way the savings from inflation, you need to think a hundred times. The disadvantage of buying gold jewelry is that you not only pay for the gold, but you also pay for the alloy or other metal that has been mixed with gold to make the designs of the jewelry. You also have to pay for the wages of the craftsman involved in making the jewelry. Therefore, buying the jewelry less than 14 carat is not beneficial if you intend to make the profit but if you only purchasing for wearing then its fine. However, old designs and antique jewelry are of great value because of their unique craftsmanship, so this can be a profitable and interesting way to collect gold.
- The next thing that you want to decide is the weight of gold. The more the weight the higher price to pay.
Find a place to buy the gold bullion
If you have made up your mind to buy the gold bullion, then you have to do some research on where to buy them as banks not always sell them. It may happen that when banks decided to sell the gold, you may not have the money and vice versa.
Therefore you have to look for reliable sources or agents from where you can buy them at a reliable cost with 100% authenticity. If you are able to find the agent, make some inquiries n the seller.
Like how long they have been selling, if they are certified by the government to sell the product and what investment activities they specialize in.
The other way to buy the gold bullion is through the online medium. Check out tips on buying gold online for details on how to invest in gold through the online market. There is another option where you can buy the gold that you want and that is the auction.
However, in the auction they don’t guarantee for the product, they sell them as they are.
So you need to have the experience and knowledge to check for the authenticity of the product, evaluate the monetary value, and protect oneself from the possible fraud.
Determine the price of gold
It is always better to be on the safe side when it comes to investing your money in yellow precious metal. Therefore, before purchasing the gold of any form, find out the price of gold at the moment.
Not only from one source but several other sources, compare them and make sure that the source is trusted one preferably the governmental source would be better.
Try to buy gold bullion at a price lower than the market
- Most resellers have a minimum purchase volume, shipping cost, and offer quantity discounts.
- Keep receipts for all purchases and find out the confirmation of the delivery date before buying a gold bar.
- When purchasing jewelry, keep all receipts in a safe place. If you purchase them at auctions, do not forget to add payments and all sales taxes.
Safe storage for your gold bullion
This is a very important point in investing in gold bullion because your investment strategy is as secure as its storage location. Invest in high-quality security mechanisms or pay storage companies for you.
Method 3: Purchase of gold exchange investment funds
Use the ETF that is Exchange-traded funds which are designed to track silver and gold prices and are usually bought through a standard exchange broker.
They are very similar to derivative contracts that track prices, but they differ in that you will not possess the implied gold assets if you invest in this scheme.
This is another way to buy paper gold through mutual funds of precious metals. Nevertheless, investments in mutual funds are associated with commissions, discounts, and allowances, which are worth paying attention to, since they can significantly reduce profitability in the long run.
And if it comes to quite large amounts, it may be more practical to buy a gold ETF yourself. In most cases, this requires a broker that provides access to foreign markets. Here you can buy the gold itself, not only in the derivatives but also in the spot market.
True, buying it on the exchange, you can watch the precious metal again only on the broker’s account. Getting physical gold in this way will not succeed.
Two types of ETFs are Market Vectors Gold Miners ETFs and Market Vectors Junior Gold Miners.
- Market Vectors Gold Miners ETF: Attempts to accurately copy (before payments and taxes) the profitable execution and prices of the New York Stock Exchange of the Arca Gold Miners Index. The portfolio contains all gold mines of all sizes around the world.
- Market Vectors Junior Gold Miners ETF: Introduced in 2009, this ETF has become very popular with investors looking for indirect access to gold assets. Although it is very similar to Gold Miners, the Junior Gold Miners ETF is focused on smaller companies that are involved in finding new sources of gold. Due to the fact that these companies are less organized, there are big risks.
- Use the same broker that you would use to buy shares or a mutual fund to buy shares in a traded gold trading fund. A traded gold trading fund is designed to track the price of gold while maintaining the liquidity of a share.
- Be aware that exchange-traded gold funds do not give you the ability to physically control gold. Therefore, some proponents of gold consider this to be an inferior way of owning the commodity.
- Another disadvantage is that ETFs trade like stocks and you may have to pay a commission to buy and sell on the exchange. In addition, any capital gains you have must be reported and depending on the amount, you will have to pay taxes on them.
Method 4: Online Purchase
There is another option for you to purchase your gold that is the online medium. There are several sites from where you can place an order for the gold that you want to buy.
Some sites will accept the cash after delivery and some sites will make you prepay before the delivery of the product. One of the advantages of this type of purchase is you don’t have to seek for the seller, for the source.
Here you have a choice in front of you where you can choose on the basis of your need and money.
However, it cant be said that all the sites are authentic, some may hand you over the fake metal. Some may hand you the gold plated ornament or some may be very authentic that present you the product with the official authentication letter in time.
You have to make a lot of research on which online site is trustworthy for you to purchase gold. It is better if you purchase the gold online form the site that has also the authentic gold shop.
There are many gold shops that have developed the site providing its customers the chance to shop for gold from the comfort of their home.