How & where do you buy gold?
wonder.bread11 asked:
My husband said we could buy funds that invest primarily in gold but wouldn’t it be safer now to physically have the gold? What is the difference between bullion bars vs gold coins? Thanks!!
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My husband said we could buy funds that invest primarily in gold but wouldn’t it be safer now to physically have the gold? What is the difference between bullion bars vs gold coins? Thanks!!
March 4th, 2009 at 10:53 am
Very few professional traders use Bullion or gold coins…… Both are expensive to ship and store and are always subject to very high rip-off commissions (mostly hidden fees… in the price).
The ETF “GLD” invests 100% in gold. Most on-line brokers will sell you plenty for between $4.95 and $14.95 commision. This ETF has more gold than most countries. You can trade these shares every trading day. They are always liquad.
WARNING: Do not invest more than 2% of your investment portfolio into gold…. The risks are simply way too big. As a general rule I would caution anyone without years of trading experiance from buying any metal.
March 7th, 2009 at 1:35 am
Your first part of the question is technically correct, you would in fact be safer if you bought the gold physically. With gold funds you have to pay management fees, broker costs and future roll costs. Also, if the fund goes under you could lose some of your money or have it suspended by administrators for years (although for funds like the SPDR Gold trust that is very unlikely).
The difference between coins and bars is just that, one is a coin and one is a bar!! Don’t forget that gold is valued by the oz (Currently $960), the two most usual bullion bars are London delivery weight which weighs 400 oz (one bar = more than $380,000) and Kilo bars which weigh 32.15 oz (one bar = more than $30,000). Then you have to pay for bank storage.
In the USA you can buy Gold Eagle coins that are pure gold and trade at gold spot price They weigh 1 oz and less. There is often a premium to be paid and a spread by the dealers. It is worth mentioning that the US Mint has stopped production of these coins as there is a speculative bubble forming in gold.
Be very careful if you are going to buy gold as an investment. It will not protect you against inflation for the long term. It will only protect against market perceived inflation. There is also a much higher percentage of investor bought gold, just like the dot.com bubble in 2000. There is a very good chance gold can rise to $1200 to $1300 per oz in the next 6 months. But if you hold this non yielding asset for long term you will lose money.
September 5th, 2010 at 3:09 pm
I think buying bullion is becoming more common. I think that the only difference between gold coins and bullion is the fabrication costs. which is the premium paid above the cost of the metal.