How to Buy Gold

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

Many people are interested in investing in gold but aren’t sure if it’s a worthwhile investment or even how to get started. This article will give you a step-by-step process for how to buy gold in 2023.

Why should I consider investing in gold?

As fears of an upcoming recession continue to mount, there’s never been a better time to invest in gold. Moreover, gold has several attractive features that make it a great addition to any investment portfolio. Here are four reasons why:

  • 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.
  • 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.
  • 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.
  • 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: This is what most people think of when they imagine owning physical gold. Gold bullion is a form of pure gold that has been certified for weight and purity. It usually comes in the form of gold bars.
  • Gold coins: Investors often buy physical gold bullion coins at a premium price. They are a popular option because the small size makes them easy to store. And it’s easier to find reputable dealers to sell you gold and silver coins.
  • Gold ETFs: If you’re not interested in directly purchasing gold, you can buy gold-based exchange-traded funds (ETFs). These shares can be purchased and sold like any other stock. Gold ETFs provide investors with a convenient and cost-effective way to invest in gold without having to purchase and store physical gold. They are typically backed by a portfolio of gold-based securities.
  • Gold mutual funds: These are mutual funds that invest in companies involved in the production, mining, and exploration of gold. Gold mutual funds may also invest in gold bullion, certificates, and derivatives.
  • Gold futures contracts: A gold future is a type of futures contract that allows investors to buy or sell a specified amount of gold at a predetermined price on a specific date in the future. Gold futures are usually best for more experienced investors.
  • Gold jewelry: Jewelry accounts for 49% of global gold production. This isn’t the most profitable strategy because retail jewelry prices will involve pretty hefty markups. You can find bargains at estate sales and auctions, but this process will be much more time-consuming.
  • Gold mining stocks: With mining stocks, you don’t actually own gold, but rather a share in a gold mining company. Gold mining companies are typically large, global enterprises that are involved in the extraction and processing of gold ore. Investing in gold stocks is another way to profit from the rising gold prices.
  • Gold IRAs: Gold IRAs are just like traditional retirement accounts, but your investment is backed by gold and other precious metals, such as silver, platinum, and palladium.

Step 2: Learn How Gold is Priced

Once you know what kind of gold you want to invest in, you need to learn how it’s priced. The gold spot price constantly fluctuating, based on the demand at that time. The “spot price” of gold simply refers to the price of one ounce of gold.

It’s a good idea to do your homework and then pay attention to what’s happening in the market. This will make it easier for you to buy when the gold prices are low.

Step 3: Find a Trusted Seller

You should take the time to find a reputable gold dealer to buy from. It is possible to purchase gold online, but you have to watch out for scam artists.

If you’re interested in buying gold bullion or gold coins, you can check with the U.S. Mint to find gold dealers in your state. But even after you’ve found a seller, you should do your homework to make sure you’re getting a good deal.

First, you want to find out what that person’s reputation is. Are there any customer reviews about that gold dealer? Are they rated by the Better Business Bureau? This will give you a clear indication of whether they’re trustworthy.

You should also spend some time researching the seller’s buyback policies. Get a copy of their policies in writing and hang onto it for safekeeping.

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

And finally, you need to have a plan in place for how you’ll store 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.

Things to Keep in Mind

Investing in gold can be a great investment strategy when done right. Make sure you know what type of gold you want to invest in right from the start and buy from a reputable dealer.

You also want to consider the logistics of your investing strategy. For instance, if you buy gold bars, you have to think about the practicality of that solution. How will you store your precious metal and keep it safe? How will you eventually sell it? After all, you can’t just cut the bar in half.

You also want to think about your rate of return on any gold you do end up buying. Make sure that the gold you’re purchasing will outpace inflation. Otherwise, you’ll end up losing money over the long run.

And finally, make sure that you don’t end up putting all your money into gold. Gold and other precious metals can be an excellent investment, but they should only be one aspect of your investment portfolio.

How to Buy Gold FAQs

Is gold a good investment?

Gold doesn’t generate cash flow like other assets. However, it can be beneficial for diversifying your assets and helping you to better withstand a recession.

What is the best way to buy gold?

The best way to buy gold is to purchase it from a reputable dealer, such as a bank, investment firm, or online gold retailer.

Be sure to do your research to find a dealer with competitive prices and reliable customer service. Additionally, it’s important to know the spot price of gold, the current market price, and to purchase it in the form that best meets your needs.

How much gold should I buy?

The amount of gold you should buy depends on your financial goals, risk tolerance, and budget. If you are looking to diversify your portfolio and protect it from market volatility, gold is a viable option.

How much does gold cost per ounce?

The price of gold can fluctuate significantly. Factors such as supply and demand, currency exchange rates, and political stability can significantly affect gold prices. Gold is priced in U.S. Dollars and is generally quoted in troy ounces, which is equal to 31.1 grams.

What is the safest way to store gold?

The safest way to store gold is to use a secure depository, a safe deposit box, or an at-home safe.

Depositories are third-party storage facilities that offer maximum security and insurance, making them an ideal choice for protecting valuable assets.

Safe deposit boxes are typically located in banks and require a key to access.

At-home safes are also a secure option, as long as they are properly installed and maintained.

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.