Michael Kosares has nearly 40 years experience in the gold business and is the founder of USAGOLD. He is the author of The ABCs of Gold Investing: How to Protect and Build Your Wealth With Gold as well as numerous magazine and internet articles. He is frequently interviewed in the financial press. He is well-known for his ongoing commentary on the gold market and its economic, political and financial underpinnings.
Answer. We probably get that question more than any other -- pretty much on a daily basis. The answer, however, is not as straightforward as you might think. What you buy depends upon your goals. We usually answer the "What should I buy?" question with one of our own: "Why are you interested in buying gold?" If your goal is simply to hedge financial uncertainty and/or capitalize on price movement, then contemporary bullion coins will serve your purposes. Those concerned with the possibility of capital controls and a gold seizure, or call-in, often include historic pre-1933 gold coins in their planning. Both the contemporary bullion coins and historic gold coins carry modest premiums over their gold melt value, track the gold price, and enjoy strong liquidity internationally.
Every ounce of gold is basically the same as every other ounce. There is no way for a company to create unique value in the gold it produces. And, as such, gold is a commodity that trades based on supply and demand. Physical gold is usually traded in the form of bullion, which is simply a gold bar or coin stamped with the amount of gold it contains and the gold's purity. (Bullion is different than numismatic coins, which are collectibles that often trade based on demand for the specific type of coin and not on their gold content.)
"Gold's return is solely based on the price going up. Thus when you sell gold you create a capital gain, that in most cases will be taxed at the more favorable capital gains tax rate," he says. "However, if one invests in gold in a tax-deferred account, the gains one receives will be taxed based on their income tax bracket, which is typically higher than their capital gains rate. So if an investor does want to own gold it should be done using taxable assets."
Krugerands became politically controversial during the 1970s and 1980s because of the association with an apartheid government. As a result, production of the coins varied, with levels of production increasing since 1998. The Krugerrand weighs 1.0909 troy ounces and is made from 91.67 percent pure gold (22 karats). As a result, the coin has one troy ounce of gold with the remaining weight in copper. Three sizes have been available since 1980 including ½ oz, ¼ oz, and 1/10 oz. Proof Krugerands are also available for collectors. They differ from bullion coins because the proofs have 220 serrations on the coin's edge, rather than 160.
Answer. Since, for one reason or another, it is difficult to take delivery from any of the ETFs, they are generally viewed as a price bet and not actual ownership of the metal. Most gold investors want possession of their gold because they are buying as a hedge against an economic, financial or political disaster. When disaster strikes, it does not do you much good to have your gold stored in some distant facility by a third party. For this reason, over the past couple of years the trend even with hedge fund operators has been away from the ETFs. In 2011, ETF sales plummeted while purchases of physical coins and bullion for delivery skyrocketed.
Buying Gold bars is one of the most cost-effective, safest and easiest ways to own physical Gold. Gold bars generally match sovereign coins in content and purity, but cost less over Gold spot price than Gold coins because they’re usually minted privately. APMEX sells Gold bars produced by Heraeus, Credit Suisse, Valcambi, Perth Mint and other respected Gold companies. Each Gold bar is stamped with its exact Gold weight, fineness and a serial number for added security.
The United States Mint is the sovereign mint of the United States of America and the only one authorized to produce American gold coins. Since 1794, the US Mint has issued both circulation gold currency and bullion gold coinage. From 1794 to 1933, the United States issued circulation gold coins in 22-karat gold (1794-1837) and .900 pure gold content (1838-1933). In 1986, the United States reintroduced gold coinage with gold bullion coins for investment and collection. The following are examples of American gold coins for sale:
A. First, and most important: Check the Better Business Bureau's profile on a company before you do business with it. Check not only its rating but the number of complaints lodged against it and how those complaints were handled. A consistent record of complaints can be a warning sign even if the company has managed to keep an A+ rating. This is a simple and straightforward step every first-time investor should take, but it is amazing how many ignore it. Second, choose a gold firm that has a solid track record. Ten years in business is good; fifteen years or more is even better. Third, choose a firm with a commitment to keeping you informed, i.e., one that is interested in answering your questions now and keeping you informed in the future. If a sales person gives you short shrift or hits you with a heavy sales pitch take it as a warning.
Many banks offer gold accounts where gold can be instantly bought or sold just like any foreign currency on a fractional reserve basis. Swiss banks offer similar service on a fully allocated basis. Pool accounts, such as those offered by some providers, facilitate highly liquid but unallocated claims on gold owned by the company. Digital gold currency systems operate like pool accounts and additionally allow the direct transfer of fungible gold between members of the service. Other operators, by contrast, allows clients to create a bailment on allocated (non-fungible) gold, which becomes the legal property of the buyer.
Where can I buy Silver bullion? APMEX deals in top-quality Silver bullion, coins and rounds. Silver bullion is one of the easiest and most cost-effective Precious Metals investments one can make. Begin today by browsing APMEX's unparalleled inventory of Silver bullion. Interested in learning how to invest in Silver? We provide up-to-date information about the ins and outs of investing in Silver.
In 2007 the Royal Canadian Mint produced a 100 kilograms (220 lb) gold coin with a face value of $1,000,000, though the gold content was worth over $2 million at the time. It measures 50 centimetres (20 in) in diameter and is 3 centimetres (1.2 in) thick. It was intended as a one-off to promote a new line of Canadian Gold Maple Leaf coins, but after several interested buyers came forward the mint announced it would manufacture them as ordered and sell them for between $2.5 million and $3 million. As of May 3, 2007, there were five orders. One of these coins has been stolen when it was on exhibition at the Bode Museum in Berlin.
Like most commodities, the price of gold is driven by supply and demand, including speculative demand. However, unlike most other commodities, saving and disposal play larger roles in affecting its price than its consumption. Most of the gold ever mined still exists in accessible form, such as bullion and mass-produced jewelry, with little value over its fine weight — so it is nearly as liquid as bullion, and can come back onto the gold market. At the end of 2006, it was estimated that all the gold ever mined totalled 158,000 tonnes (156,000 long tons; 174,000 short tons). The investor Warren Buffett has said that the total amount of gold in the world that is above ground could fit into a cube with sides of just 20 metres (66 ft) (which is roughly consistent with 158,000 tonnes based on a specific gravity of 19.3). However, estimates for the amount of gold that exists today vary significantly and some have suggested the cube could be a lot smaller or larger.[by whom?]
Since its discovery, the precious metal gold has never ceased to fascinate. Initially used heavily in pieces of jewelry and currency, today it can be found in a number of other various industries due to its impressive conductivity and malleability. Though currently it's not often found in circulated pieces of currency, the precious metal is still widely collected across the world by civilians and governments alike. While gold coins or rounds are still popular, frequently gold is stockpiled in bar form due to a number of factors like the number of available sizes and how easy it is to track, stack, and store. Here at the U.S. Gold Bureau, we take a lot of pride in the wide variety of gold we offer. This is especially true when it comes to our stock of gold bars. Ranging in size from 1 ounce bars to 100 gram bars, you should be able to find whatever sized ingot you're looking for. What's more, we carry bars from a number of different refiners and manufacturers. Get bars made by International Trade Bullion or take a look at package deals that contain gold bullion from a number of different refineries like RMC, Perth Mint, and PAMP.
The primary benefits to gold bullion bars for gold buyers are diversity and affordability. Gold bullion bars have lower premiums over the spot price of gold when compared to gold bullion coins, and the variety of options is far more diverse. Gold bullion bars are available not only in the aforementioned weights, but also styles including cast, hand-poured, and minted ingots. Gold bullion bars are struck continuously to meet the demand for gold, with the following refineries and mints representing some of the greatest refiners of gold bars:
Numismatic simply means collectible. Numismatic coins are rare, old or valuable coins that are worth more than just their melt value because they are collector’s items. A gold or silver coin (even platinum and palladium) can be both bullion and numismatic. By their manufactured nature the coins are bullion, but some specific years and types add value on top of the metal spot value of the coin, making them numismatic. Some specific coins can earn substantial premiums above and beyond the metal’s bullion value simply due to the fact that the coin issue is extremely hard to find. Additionally, coins in very good or perfect issue condition will often be worth far more than circulated bullion coins. Finding a protected, rare issue makes a bullion coin unique, which is why collectors will pay a high price to get their hands on it.
Bullion coins can be defined as high-grade precious metals coins suitable for investment purposes. Bullion coins are predominantly issued by a government agency, however, there are some cases where coins are produced by private institutions. That said, in almost all cases, the coin is almost completely made of a precious metal (90% purity and above), it has the amount of that metal stamped on the coin based on a standard metric, and it is also stamped by the agency that created the coin. So, for example, a Gold Eagle is crafted by the U.S. mint, authorized by the U.S. government, and has both the weight (1 troy ounce) and the purity, in some cases, included on its surface (see the Gold Buffalo issued by the U.S. mint).
APMEX: (OK) 405-595-2100 and press 1 unless you want to be on hold forever. For purchases of one to 19 coins there is a 5% markup; for 20 to 99 coins it’s 4.8%; for 100 or more it’s 4%. You must open a free online account. You’ll pay $25 shipping for orders under $25,000; shipping is free if you buy more. Payment by check or wire transfer is preferred.
United States Gold Bureau is a private distributor of Gold, Silver & Platinum coins from the U.S. Mint and is not affiliated with the U.S. Government. Information on this web site is intended for educational purpose only and is not to be used as investment advice or a recommendation to buy sell or trade any asset that requires a licensed broker. As with all investments there is risk and the past performance of a particular asset class does not guarantee any future performance. The United States Gold Bureau, principals and representatives do not guarantee to clients that they will realize a profit or guarantee that losses may not be incurred as a result of following its coin collecting recommendations, or upon liquidation of coins bought from the U.S. Gold Bureau. All content and images are owned by USGB and may not be reproduced without written authorization.
Gold can be a profitable investment when all others fail. If you are concerned about inflation or the devaluation of your country’s currency, you may want to add gold to your portfolio. That said, understand the specific gold investment you’re considering thoroughly before you actually invest. For example, exactly how much will it cost you to store and insure physical gold? What are the tax differences for your income tax bracket between investing in a gold ETF or a gold mining ETF? Knowing the details can make a big difference when it comes to profitability.
Silver has many different uses both industrially and as an investment vehicle. Silver is a very interesting precious metal which has unique malleability, strength and ductility. It can endure extreme temperature changes, and its electrical and thermal conductivity make it extremely versatile in modern industry. The fact is, silver can accomplish things that other elements cannot come close to and, therefore, demand for it is likely to continue to rise. Silver is most commonly used today in electrical components, silver oxide batteries and various areas of radiography
Gold bars are often the least expensive form of bullion and are perfect for large purchases. They’re often easier to store and ship. 1-ounce coins are probably one of the most common and instantly recognized forms of gold. Coins allow investors to buy batches of gold in smaller increments (though there are also 1-ounce bars). Coins can sometimes be more convenient to liquidate, since you can sell off your gold savings one ounce at a time, rather than finding a buyer for a large bar of gold.
Investors who are solely interested in Silver’s stable purchasing power can find security in buying Silver rounds. Silver rounds are circular discs often manufactured by private mints, though sometimes produced by government mints. They have no “face value” and are not recognized as legal tender. Silver rounds are not quite as diverse or collectible as Silver coins, but are an excellent choice for those who want to invest in Silver as an anti-inflation hedge.
One of the most frequently asked questions is, "What gold bar should I buy?" In addition to the size of the gold bar having an impact on overall price and premium above the fluctuating gold spot price, the gold bar’s mint may affect a gold bullion bar’s pricing slightly. A highly recognizable government gold bar may sell for a few dollars more than a like kind gold bar from a less recognizable privately minted gold bar when you decide to sell your gold bar back to a gold bullion dealer. A gold bullion bar guaranteed and produced by a sovereign national mint such as the Royal Canadian Mint (RCM) will typically have a higher premium or slightly higher price when buying, but government guaranteed gold bars typically receive a higher buy back premium when you go to sell your gold bar back to gold dealers or other investors. Similarly, a gold bullion bar from a highly recognizable private gold mint may sell for a slightly higher premium than a smaller less recognizable private gold mint. Live buyback prices for gold bars can be found online on the corresponding product page.
As alluded to above, investors often make the mistake of buying so-called rare coins. These numismatic or semi-numismatic coins are meant for collectors, speculators, and hobbyists rather than people looking to reliably preserve and build wealth. Rare coin buying is exceedingly risky and often buyers pay inordinately high premiums and do not recoup their value. Rare coins are not really a gold investment… they are more akin to artwork. Some collectors buy coins for pleasure, because of their history or beauty, or because they have excess money to tie up in illiquid assets. Gold coins that are priced close to their actual melt value is a more prudent way to invest in precious metals.
Good question. There are thousands of dealers in the country, but there is no federal regulation and little state regulation. The U.S. Mint has a list of national dealers and dealers by state that it checks but doesn’t vouch for. White says that the Mint checks those dealers against the Better Business Bureau list for complaints, as well as online to see whether there is “any negative information about the firm and to get a feel for how the company conducts and promotes itself.”
White says that American Eagle Bullion coins, one of the most popular coins for investing in gold, first make their way into the market when they are sold to the Mint’s “authorized purchasers.” (See the list below of the authorized purchasers and their prices, terms and conditions. If you’re new to buying gold, they are a great place to start.) Gold coins are also sold in commemorative editions directly to the public, but these are more expensive. The Mint marks up the price of the coins to cover the value of the gold and the actual minting, as well as shipping and other costs, White says. Dealers say that markup is about 3%. Then the authorized purchasers -- some of whom sell directly to the public and all of whom sell to other dealers -- add their own markup, as do the dealers who buy the coins.
Physical Gold adds security to your investment portfolio. As there is a finite amount of Gold in the world, Gold’s relative purchasing power tends to remain stable during periods of inflation. For example, in 1985, the cost of an ounce of Gold was about the cost of a nice men’s suit. Allowing for some peaks and valleys in the market, today, one ounce of Gold still costs about the same as a nice men’s suit, even though the price in dollars has nearly quadrupled. Gold prices do fluctuate, but they generally move independent of the stock market. For a stable investment independent of stocks and bonds that can protect your purchasing power long term, buy physical Gold.
That said, bullion coins usually command a premium over the melt value in the actual marketplace. On newly minted bullion coins, the premium charged over market value can be attributed to the relative liquidity and small size of bullion coins compared to bullion as well as the costs involved in manufacturing and distributing them. In secondary trading, however, additional premiums can develop specific to the coins. This is due to the numismatic value rather than the melt value. Numismatic value refers to the higher value that is commanded due to the relative rarity or particular beauty of a specific edition of a bullion coin. Unlike the melt value, discerning the numismatic value is more art than math.
People with limited capital to invest in precious metals may not divest as much as they would desire into gold bullion. Hence, such buyers should stick to cheaper low-risk gold bullion products with lower premiums over spot, offering them solid appreciation over time – granting them with inflation-proof, financial protection. This is the best way to hedge against inflation and is recommended by financial advisors as a good method of balancing portfolios.
The difference between mint bars and cast bars are just the tip of the iceberg when it comes to variations in gold bars. The U.S. Gold Bureau carries a plethora of different sized bars, both cast and mint. One of the most important factors people take into account when buying gold is what size to purchase. As stated previously, gold can be found in almost any weight you can imagine. The single gram or 1 gram bar is about about as small as you can go when it comes to gold bars with investment potential. Sometimes referred to as the "small bills" of the gold world, these tiny bars are just about the size of a thumbtack. The 5, 10, and 20 gram bars are the next steps up in terms of gold bar weights.
Southwest Numismatic Corp. is a PCGS authorized dealer operating by appointment only. Though they have little internet presence, they are known for high-grade coins at reasonable prices. They specialize in rare coins including early U.S. coins, such as copper, small cents, and colonial or territorial issues. Southwest Numismatic also deals in ancient and foreign coins, paper currency, and gold and silver bullion coins.
Buying Silver bars is one of the most cost effective, safest and easiest ways to own physical Silver. Silver bars are the bullion of choice for many investors because they cost less over Silver spot price than Silver coins. Additionally, their uniform shape and size mean Silver bars are easy to store, count and transfer. APMEX sells Silver bars produced by Sunshine Mint, PAMP Suisse, RCM, Johnson Matthey and other respected Silver mints. Each Silver bar is stamped with its exact Silver weight, fineness, and a serial number for added security.
Gold coins minted pre-1933 come in a range of monetary values. Each of these coin values also has a number of varieties for each denomination, depending on which year it was produced. Gold pieces were coins that were produced in small denominations such as 1-dollar, 3 dollars, and 4 dollars. The eagle was another major variety that comes in four denominations: 20-dollar double eagle, 10-dollar eagle, 5-dollar half eagle, and 2.50-dollar quarter eagle.
A silver round is exactly what it sounds like. It is a round piece of pure silver. This form is similar to a coin, but unlike a coin it does not carry any face value. Because silver rounds cannot be used as legal tender, these bullion products may be produced by government and private mints, as well. Silver rounds come in various sizes, but like silver bullion coins the most common size is 1oz. Silver rounds carry the smallest premium over the spot silver price, making them a very good choice for investors looking to accumulate silver.
A. Traditionally, wealthy, aristocratic European and Asian families have kept a strong percentage of their assets in gold as a protective factor. The long term economic picture for the United States has changed enormously over the past several years. As a result, that same philosophy has taken hold here particularly among those interested in preserving their wealth both for themselves and for their families from one generation to the next. In recent years, we have helped a good many family trusts diversify with gold coins and bullion at the advice of their portfolio managers.
Banks offer us a way of looking after our money, with the promise of a small return every year in the form of interest. Other investments such as equity in a high performing company or a hedge fund offer the potential for enormous returns and can be attractive for those looking to increase their wealth. However, while maximising your wealth is one way to increase your financial security, are these types of asset, for all their potential returns, a safe choice? There are often huge levels of risk involved in these investments and businesses, banks, and other financial institutions are all vulnerable to economic collapse. Even leaving your money in the bank, the lowest risk of these options, can offer very low returns at times and, although they seem stable institutions, are vulnerable to collapse, leaving your hard-earned money in severe danger of being lost entirely.
Over the trailing five year period through March 31, 2018 the standard deviation of gold, using ETF SPDR Gold Shares (NYSEMKT:GLD) as a proxy (more on this gold-owning ETF below), is 16. The annualized return over that span was a loss of around 4%. Putting those two numbers together, there is a reasonable probability that gold will provide a gain of between 12% and a loss of 20% in any given period. That's a pretty big range that dips soundly into negative territory. By comparison, the standard deviation of the S&P 500 Index over the same span was a little under 10 with an average annualized return of about 13%, suggesting the expected range was between a gain of 23% and a gain of 3%. Which one sounds safer to you?
When people buy physical gold, they can store it themselves, have someone store it for them or do a combination of both. Some people keep it in a home safe, storage boxes, or in coin capsules at home. Others store it in a safe deposit box at the bank or other secure location. Safe deposit boxes at the bank are affordable but may offer limited access, based on the hours of the financial institution. The bank does not insure the contents of the box, which means separate insurance should be purchased.
It is generally accepted that the price of gold is closely related to interest rates. As interest rates rise, the general tendency is for the gold price, which earns no interest, to fall, and vice versa. As a result, the gold price can be closely correlated to central banks[clarification needed] via their monetary policy decisions on interest rates. For example, if market signals indicate the possibility of prolonged inflation, central banks may decide to raise interest rates, which could reduce the price of gold. But this does not always happen: after the European Central Bank raised its interest rate slightly on April 7, 2011, for the first time since 2008, the price of gold drove higher, and hit a new high one day later. Similarly, in August 2011 when interest rates in India were at their highest in two years, the gold prices peaked as well.
For all these reasons, it's easy to jump to the conclusion that gold is an unsafe investment. Which would be true if the only thing you owned was physical gold or gold-focused mutual funds and exchange-traded funds (ETFs). If you use gold as part of a larger, diversified investment plan, however, it is not only safe to own but can provide you with positive returns when the rest of your portfolio is struggling. Here's why gold can be a safe investment, when used the right way.
Gold coins are also flat, disk-shaped 0.999+ pure gold pieces. However, most gold coins, unlike gold rounds, carry an official face value (legal tender value) in the country of issue. These investment instruments carry one of the highest premiums over the spot price of gold due to collector demand and official recognition from sovereign governments.
Bullion Coins offer investors the intrinsic value of the gold, along with the numismatic value of the actual coins. Coins are produced in world renowned mints such as the US Mint, Royal Canadian Mint, or the People's Republic of China and come in limited mintages, therefore increasing their value. They are also recognized as legal tender, wherein gold bars are not. Bullion coins usually come with a higher premium because they are considered legal tender and they are produced in respected Mints. Depending on where they were minted, some coins come in fractional sizes, along with the typical and most popular, one ounce increment. Gold bullion coins provide investors and collectors a product with value that will always be recognized all over the world.
The average investor prefers to purchase silver coins issued by sovereign mints. These coins are known commodities around the world. Each one features the same weight and metal content with every release year. A central government and/or central bank backs the purity and weight of each, and in most cases issues a nominal face value for the coin even though the value of its silver content outweighs any denominational value. There is great diversity in the silver bullion coin market, with the following coins representing the most popular from mints around the world: