If you’re looking to hedge against economic uncertainty, inflation and currency devaluation, you may want to consider investing in gold as a way to protect your wealth. Gold is a relatively stable investment that doesn’t experience the same degree of volatility as stocks and other tradable assets, and it’s historically preserved wealth during market downturns and geopolitical turmoil. Gold’s intrinsic value, limited supply and global recognition make it a reliable store of value and portfolio diversifier for investors seeking stability.
Find out how to buy gold bars, gold coins and other forms of this popular precious metal and what, if any, tax benefits and implications may apply.
Physical gold has been considered an asset for thousands of years, with its use dating back to ancient civilizations such as the Egyptians, Greeks and Romans. And it’s largely maintained its value over time. Gold’s historically exhibited low correlation with other assets, helping reduce overall portfolio risk, and it protects against currency devaluation and rising prices during inflationary periods. What’s more, physical gold acts as a safe-haven asset during economic and geopolitical turmoil.
Gold bullion is a type of physical gold that is at least 99.5% pure and has been transformed into bars or ingots or minted into coins. Gold bullion is the form in which gold is traded on commodities markets worldwide and comes in the form of gold bars or coins:
At most institutions, there is a limit to how much gold you can purchase daily. For instance, most banks have a daily limit of around $10,000 worth of gold, but this can vary. Whether you are a customer may also influence your daily purchase limit and price.
Gold bars generally range in size from 1/10 of a troy ounce to one kilogram (kg), but bars of up to 500 troy ounces are available. One troy ounce equals 31.1 grams.
Gold bars come in two types: cast bars and minted bars. Cast bars are produced by pouring molten gold into an ingot mold, while minted gold bars are manufactured via a minting or stamping process.
Cast bars are cheaper to produce, but minted bars look better and are generally easier to sell.
The best place to buy gold bars online can depend on factors such as reputation, reliability, pricing and customer service. Some reputable online dealers and platforms for purchasing gold bars include:
Gold coins are typically smaller than bars and ingots, and they may be considered a more convenient option for many investors because of it.
However, due to additional factors such as manufacturing costs, design and collectability, gold coins may cost more than gold bars per ounce. But they still make it easy to liquidate a small portion of your investment if you need cash. Coins contain between one-twentieth and one troy ounce of pure gold.
These coins also have a nominal monetary value and can be accepted as legal tender in the country where they’re made — examples include the Australian Kangaroo, the American Gold Eagle, the Canadian Maple Leaf and the UK’s Gold Sovereign. The same online dealers and platforms that sell gold bars typically sell gold coins.
Physical gold isn’t the only way to invest in this precious metal. Gold stocks and exchange-traded funds (ETFs) offer convenient ways to diversify your portfolio and get exposure to gold’s price action without having to worry about handling and storage.
Investing in gold stocks and ETFs offers several advantages:
Retirement-minded investors may consider gold individual retirement accounts (IRAs) for their bullion investing. These types of self-directed IRAs let you invest in physical gold and other precious metals through a tax-advantaged retirement account.
A gold IRA can be structured as a traditional IRA, a Roth IRA or a simplified employee pension (SEP) IRA.
Follow these steps to buy gold in a IRA:
The graph below tracks the spot price of gold, which is the current marketplace price per ounce of gold.
There are numerous pricing factors to consider and compare before selecting your gold.
A safe haven investment is typically stable in times of market volatility. It is also useful for investors looking to diversify their portfolio, decreasing exposure to riskier assets or investments. Investors view gold as a safe haven for several reasons:
If you’re searching for ways to protect your wealth or diversify your investments, gold bullion, stocks and ETFs may be a practical addition to your portfolio. These securities provide a means to add gold exposure to your portfolio, either through physical acquisition or exposure through the stock market. Regardless of how you choose to invest in gold, remember that, like all investments, it carries risk.
Yes, it is safe to buy gold online, provided you’re purchasing from a reputable gold dealer. Before deciding whether to buy, thoroughly research the legitimacy of any dealer by checking to see how long they’ve been in operation and whether they’ve been flagged for any breach of compliance.
Aside from buying gold as a physical commodity, there are a couple of other ways you can potentially make money from gold. For example, it’s possible to invest in exchange-traded funds that track the price of gold or invest in gold mining companies. Of course, these options also come with a certain level of risk attached, and there’s no guarantee of making a profit.
Once you’ve purchased your gold, you’ll also need to find a safe place to store it. There are several options to consider, including the following:
The best type of gold to buy depends on your individual preferences, investment goals and risk tolerance. Physical gold is a tangible asset that can serve as as a reliable hedge during crises, ensuring access to wealth in times of need. But it can be burdensome to store. On the other hand, gold ETFs provide exposure to gold prices without the need for physical ownership or storage. Each type has its pros and cons in terms of liquidity, storage costs, counterparty risk and potential returns.
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