How to Buy Gold in 2024

Investing

Diversifying your assets is one of the best ways to create a sustainable, long-term investment strategy. And one of the ways you can do this is by buying gold.

Investing in gold and other precious metals is a great way to protect yourself against inflation. It also allows you to put your money in an asset that will likely continue to retain its value.

American eagle coins

Despite the numerous benefits of investing in gold, many individuals remain uncertain about its viability as an investment and the process for getting started. In this article, we will outline a comprehensive guide on how to buy gold in 2024.

Why should I consider investing in gold?

With growing concerns of an impending recession, investing in gold has become increasingly relevant. This precious metal boasts a multitude of advantageous features that make it a valuable asset to any well-rounded investment portfolio. Here are four reasons why investing in gold is a wise choice:

  1. Gold protects you from inflation: If you’re investing in the stock market, there’s a lot that’s outside your control. But gold is an asset you’ll always have some level of control over, regardless of what happens on Wall Street.
  2. It retains its value: Because gold is much harder to obtain, it retains its value much longer. And you never have to worry about it decaying or losing its structure.
  3. Gold is a high-demand product: There are many ways to use gold, and it tends to be a product that’s in high demand. This is especially true when economic conditions are tight.
  4. Gold is an insurance policy: While some people purchase gold because they’re hoping to make a profit. Others like the security of owning gold and keep it as insurance in case of an economic downturn. Either strategy is an equally valid reason for gold investments.

How do I start investing in gold?

So now that you understand why gold is a good investment, it’s essential to know how to buy and sell gold, so you can get started. Listed below are five steps to make sure you get started on the right path.

Step 1: Decide What Type of Gold You Want to Buy

Start by deciding what kind of gold you would like to purchase. Each product will require a slightly different purchasing strategy, so you need to be clear on this right from the start.

Here are the main types of gold most people choose to invest in:

  • Gold bullion: When people think of owning physical gold, gold bullion is what usually comes to mind. It is a form of pure gold certified for weight and purity, typically in the form of bars.
  • Gold coins: A popular option for investors, gold bullion coins are easy to store due to their small size. They can be bought at a premium price and are readily available from reputable dealers.
  • Gold ETFs: For those not interested in directly owning gold, gold-based exchange-traded funds (ETFs) offer a convenient and cost-effective alternative. These shares can be bought and sold like stocks and are backed by a portfolio of gold-based securities.
  • Gold mutual funds: These mutual funds invest in companies involved in gold production, mining, and exploration. They may also invest in gold bullion, certificates, and derivatives.
  • Gold futures contracts: Gold futures are a type of futures contract allowing investors to buy or sell a specified amount of gold at a predetermined price and date in the future. They are best for experienced investors.
  • Gold jewelry: Accounting for 49% of global gold production, jewelry is a common form of gold ownership. However, it may not be the most profitable strategy as retail jewelry prices come with substantial markups. Estate sales and auctions may offer better deals but require more time.
  • Gold mining stocks: With gold mining stocks, investors own a share in a gold mining company instead of the actual gold. These companies are large, global enterprises involved in the extraction and processing of gold ore. Investing in gold mining stocks is another way to profit from rising gold prices.
  • Gold IRAs: Similar to traditional retirement accounts, gold IRAs are backed by gold and other precious metals like silver, platinum, and palladium. They offer a unique investment opportunity for those looking to diversify their retirement portfolio. Here’s a list of the best gold IRA companies of 2024.

Step 2: Learn How Gold Prices Work

Before investing in gold, it’s essential to understand how gold prices work. The gold spot price, which reflects the cost of one ounce of gold, can fluctuate considerably based on market demand.

To ensure that you make wise investment decisions, research the market and stay up to date with its trends. In doing so, you’ll be poised to make the most of the opportunities presented by decreases in gold prices.

Step 3: Find a Trusted Seller

When investing in gold, you need to choose a trustworthy dealer. While purchasing gold online is convenient, be sure to exercise caution to avoid falling victim to scams.

To ensure that you purchase gold bullion or coins from a reputable source, consider consulting the U.S. Mint for a list of gold dealers in your area.

Once you have identified a potential dealer, make sure you evaluate their credibility. Gather information about their reputation through customer reviews and the Better Business Bureau.

It’s also a good idea to research the dealer’s buyback policies. Obtain a written copy of these policies and keep them in a safe place for future reference.

Step 4: Buy Physical Gold that You Can Sell

If you buy gold that is in demand, it will be easier when selling it at a later time. Stick to the most familiar gold coins and gold bars.

Gold Coins

The following are the most popular gold coins:

  • American Gold Eagle
  • Austrian Philharmonic
  • British Britannia
  • Canadian Maple Leaf
  • South African Krugerrand

Gold Bars

The most popular gold bullion bars include:

  • Credit Suisse
  • Perth Mint
  • Valcambi
  • Englehard
  • Johnson Matthey
  • PAMP Suisse

Step 5: Decide How You’ll Store the Gold

Finally, make sure you have a plan in place for storing your physical gold. Sticking several gold bars under your bed probably isn’t the wisest strategy. This puts you at greater risk of having your investment stolen.

Your best bet to store physical gold bars and coins is likely to purchase a safe for your home. You can also use a safe deposit box at a bank or rent a secure storage facility.

Conclusion

Investing in gold can be a rewarding journey, but only if you approach it with caution and foresight. First, decide the type of gold that aligns with your investment objectives, whether it be coins or bars, and make sure to source from a reputable dealer.

Additionally, take into account the practical aspects of your investment strategy. For instance, if you opt for gold bars, consider the storage and security of your precious metal, and how you plan to sell it in the future. Gold bars can’t be easily divided, so take that into account.

Furthermore, you’ll need to factor in the rate of return on your gold investment. Ensure that the gold you purchase will not only keep pace with, but also surpass inflation, or you may end up with a loss in the long run.

And finally, avoid the common mistake of putting all your eggs in one basket, especially when it comes to gold investment. While gold and precious metals can be a lucrative component of your investment portfolio, they should never make up your entire investment strategy.

How to Buy Gold FAQs

Is gold a good investment?

Gold is a unique asset that doesn’t provide regular income in the form of cash flow, unlike other investments. However, owning gold can still have many advantages for your overall investment portfolio.

By including gold in your asset mix, you can diversify your investments and reduce your overall risk exposure. This is particularly important during times of economic uncertainty, such as a recession.

When other investments may perform poorly, gold has historically held its value, helping to protect and stabilize your wealth. This characteristic of gold makes it a useful tool for managing risk and preserving your wealth over the long term.

What is the best way to buy gold?

Acquiring gold can be a smart investment choice, but it’s essential to choose the right seller. Reputable sources include banks, investment firms, and online gold retailers.

To ensure you make a wise decision, do your due diligence and find a dealer with a good reputation, competitive pricing, and dependable customer support.

Furthermore, being aware of the current spot price of gold and market trends is crucial to making an informed purchase. Ultimately, the best form of gold to buy is the one that aligns with your investment objectives and needs.

How much gold should I buy?

Experts generally suggest investing 5% to 10% of your portfolio in gold. During economic downturns and periods of high inflation, some recommend allocating a larger portion.

The ultimate decision on how much to invest in gold should be based on personal financial objectives, comfort with risk, and available funds. As a diversification tool and a hedge against market instability, gold is a consideration worth making.

How much does gold cost per ounce?

Gold can experience significant price swings due to a multitude of factors. These include the ebb and flow of supply and demand, the fluctuation of currency exchange rates, and the instability of political climates.

The value of gold is expressed in U.S. Dollars and is most commonly reported in troy ounces, a unit equivalent to 31.1 grams. As of this writing, gold is priced at around $1875.00 per ounce.

What is the safest way to store gold?

For the ultimate protection of your gold investments, consider utilizing a secure depository, a bank safe deposit box, or an at-home safe.

Depositories provide comprehensive security and insurance coverage. They are an excellent option for safeguarding valuable assets.

Safe deposit boxes, located within banks, offer added protection with key-controlled access. An at-home safe, properly installed and maintained, can also provide a secure storage solution.

Jamie Johnson
Meet the author

Jamie Johnson is a freelance writer who has been featured in publications like InvestorPlace and GOBankingRates. She writes about various personal finance topics including student loans, credit cards, investing, building credit, and more.