What type of gold bullion should i buy

Legitimate bars are stamped with the manufacturer's name, purity and the weight. Gold bullion bars and rounds are generally sold and then mailed to you by online gold retailers, which can offer discounts for members of the military and for buying in bulk.

Some well-known retailers include:. You may also be able to buy smaller gold bars, ranging from half a gram up to grams, in stores that specialize in numismatics, pawn shops or some jewelry stores. Several governments, including the U. Coins issued by the U. Mint are technically legal tender, meaning that they could in theory be used to pay for goods at a retail store. However, the value of their gold tends to be much higher than their face value.

Collectible coins may have an even higher market value due to their rarity or if there is high demand. Their purity is usually between 22 and 24 karats, with the purity guaranteed by the mints that produce them. When buying gold jewelry, keep in mind that the price you pay will be tied to the craftsmanship of the piece and that the amount of gold it contains will be just a percentage karat of its overall weight. For instance, the most common type of gold used in jewelry in the U.

Other common mixtures of gold are 18K, and 22K. Some jewelry merchants take steps to reassure customers their gold does not come from areas of armed conflict. Buying physical gold comes with drawbacks — like price markups by sellers, and the need for storage — so financial advisors typically recommend you invest in gold indirectly, through securities like gold funds and stocks.

Gold ETFs exchange-traded funds own physical gold on your behalf. Investors buy shares in the fund through a stockbroker, whether in-person or online. ETFs do charge fees, although these tend to be lower than fees charged by gold mutual funds.

They may also be lower than what it costs to insure and store gold in a facility like a safety deposit box. On average, ETFs charge annual fees of 0. The information, including any rates, terms and fees associated with financial products, presented in the review is accurate as of the date of publication.

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The information on this site does not modify any insurance policy terms in any way. When economic times get tough or the stock market looks jittery , investors often turn to gold as a safe haven. Savers and investors like gold for many reasons, and it has attributes that make the commodity a good counterpoint to traditional securities such as stocks and bonds. One of the more emotionally satisfying ways to own gold is to purchase it in bars or in coins.

One of the largest drawbacks is the need to safeguard and insure physical gold. This is in contrast to owners of a business such as a gold mining company , where the company can produce more gold and therefore more profit, driving the investment in that business higher.

A pawn shop may also sell gold. Thus, a miner may actually produce gold as a by-product of its other mining efforts. Miners begin by finding a place where they believe gold is located in large enough quantities that it can be economically obtained. Then local governments and agencies have to grant the company permission to build and operate a mine. Developing a mine is a dangerous, expensive, and time-consuming process with little to no economic return until the mine is finally operational -- which often takes a decade or more from start to finish.

The answer depends partly on how you invest in gold, but a quick look at gold prices relative to stock prices during the bear market of the recession provides a telling example. Between Nov. When capital markets are in turmoil, gold often performs relatively well as investors seek out safe-haven investments. Here are all the ways you can invest in gold, from owning the actual metal to investing in companies that finance gold miners.

The markups in the jewelry industry make this a bad option for investing in gold. Once you've bought it, its resale value is likely to fall materially. This also assumes you're talking about gold jewelry of at least 10 karat. Pure gold is 24 karat. Extremely expensive jewelry may hold its value, but more because it is a collector's item than because of its gold content.

These are the best option for owning physical gold. However, there are markups to consider. The money it takes to turn raw gold into a coin is often passed on to the end customer. Also, most coin dealers will add a markup to their prices to compensate them for acting as middlemen.

Perhaps the best option for most investors looking to own physical gold is to buy gold bullion directly from the U. Mint , so you know you are dealing with a reputable dealer. Then you have to store the gold you've purchased. That could mean renting a safe deposit box from the local bank, where you could end up paying an ongoing cost for storage. Selling, meanwhile, can be difficult since you have to bring your gold to a dealer, who may offer you a price that's below the current spot price.

Another way to get direct exposure to gold without physically owning it, gold certificates are notes issued by a company that owns gold. These notes are usually for unallocated gold, meaning there's no specific gold associated with the certificate, but the company says it has enough to back all outstanding certificates. You can buy allocated gold certificates, but the costs are higher. The big problem here is that the certificates are really only as good as the company backing them, sort of like banks before FDIC insurance was created.

This is why one of the most desirable options for gold certificates is the Perth Mint , which is backed by the government of Western Australia. That said, if you're going to simply buy a paper representation of gold, you might want to consider exchange-traded funds instead. If you don't particularly care about holding the gold you own but want direct exposure to the metal, then an exchange-traded fund ETF like SPDR Gold Shares is probably the way to go. This fund directly purchases gold on behalf of its shareholders.

Another way to own gold indirectly, futures contracts are a highly leveraged and risky choice that is inappropriate for beginners. Even experienced investors should think twice here. Essentially, a futures contract is an agreement between a buyer and a seller to exchange a specified amount of gold at a specified future date and price. As gold prices move up and down, the value of the contract fluctuates, with the accounts of the seller and buyer adjusted accordingly. Futures contracts are generally traded on exchanges, so you'd need to talk to your broker to see if it supports them.

The biggest problem: Futures contracts are usually bought with only a small fraction of the total contract cost. This creates leverage, which increases an investor's potential gains -- and losses. And since contracts have specific end dates, you can't simply hold on to a losing position and hope it rebounds. Futures contracts are a complex and time-consuming investment that can materially amplify gains and losses.

Although they are an option, they are high-risk and not recommended for beginners. One major issue with a direct investment in gold is that there's no growth potential.

An ounce of gold today will be the same ounce of gold years from now. That's one of the key reasons famed investor Warren Buffett doesn't like gold -- it is, essentially, an unproductive asset.

This is why some investors turn to mining stocks. Their prices tend to follow the prices of the commodities on which they focus; however, because miners are running businesses that can expand over time, investors can benefit from increasing production.

This can provide upside that owning physical gold never will. However, running a business also comes with the accompanying risks. Mines don't always produce as much gold as expected, workers sometimes go on strike, and disasters like a mine collapse or deadly gas leak can halt production and even cost lives.

All in all, gold miners can perform better or worse than gold -- depending on what's going on at that particular miner. In addition, most gold miners produce more than just gold. That's a function of the way gold is found in nature, as well as diversification decisions on the part of the mining company's management.