A beginner’s guide to investing in gold

People have been investing in gold for centuries – and with good reason. The precious metal is a popular and steady investment choice, not least for its rarity and global demand.

If you are new to the world of investing in precious metals, there are some key considerations you will need to make. Follow these steps and you could find yourself building a gold portfolio in little time at all.

Buy gold safely

Buying gold might seem easy at face value, but the fact is that you need to be selective where you purchase it from to be sure of its quality and genuineness. There are plenty of rogue traders out there, so having your wits about you is the only way to ensure you won’t be buying anything less than the real deal.

One option is to turn to a reputable source such as The Perth Mint. Its gold and silver bullion bars are stamped with an official trademark, with the larger versions recognised by the London Bullion Market Association. 

If you are unsure of the origins of the gold, or the buyer seems illegitimate, it would be a wise move to walk away from the transaction and look elsewhere.

Coins or bars?

Gold investors often find themselves faced with two options – do they buy coins or bars? The answer is that it depends on your personal preference, as well as what your end goal is for the investment.

Bars are widely considered a simple and efficient way of investing. They are generally preferred by large scale investors, which means it might not be quite so easy to trade with smaller parties. Different sizes of gold bars are available, with the larger sizes usually having less of a premium per ounce of gold.

Coins, on the other hand, are generally available in contemporary and historic versions. Their premiums tend to be modest compared to the gold melt value, but they have the added benefit of strong international liquidity.

When to buy

This is a question that any investor will ask themselves, no matter whether they are buying stocks or shares, property or precious metals. The easy answer is that there is no obvious time to buy. It will depend on a wide range of factors, so monitoring the market is the only real way to determine when it is a good time to strike.

Conditions in the global economy will lead the gold price to fluctuate, so it pays to keep an eye on the headlines. For example, instability in Greece and the announcement of a significant gold discovery could both cause changes to prices, so it is wise to show some global awareness.

Know your storage options

Owning gold simply isn’t enough – you need to be safe in the knowledge that it is securely stored. After all, no investment will be worthwhile if it is stolen. Home storage options simply aren’t safe enough, especially for those investors with large amounts of bullion to their name.

Choosing a provider with a proven track record in bullion storage is essential. Bullion safes and safe deposit boxes are two options that will cater to your needs, no matter whether you are a private or retail investor.

It is a good idea to consider whether a storage product will be able to cope with the weight of your precious metals. A facility that isn’t designed to store large amounts of bullion may not be the right choice if you have a particularly extensive portfolio.

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