Factors to Consider When Buying Physical Gold

For centuries, gold has been paving the way to financial security. With time, diversification has become the goal of smart investors. Investing in gold is no longer restricted to the physical limitations of the past. Gold is now a prized asset AND a prized collectible.

With gold coins and bars more popular and more accessible than ever and options such as the Gold Accumulation Plan, the Gold Monetization Scheme, and the Gold Exchange Traded Funds, are drawing the interest of many investors.

But for anyone interested in investing, whether it be in non-tangible assets or in precious metals, it is imperative to consider all factors, good and bad, before making your move. Here is a list of things to consider when adding precious metals, particularly gold, to your investment portfolio.

Factor #1: Storage

When you are purchasing any asset, it is essential to know about the additional expenses that come along with safely storing your new investment. With gold, proper storage is a must to ensure that your investment will stay safe and secure from harmful effects.

Storing gold at home is not the wisest or safest way to keep your gold. Fires, burglaries, misplacements, and more are all things that can damage or destroy your gold. The best place to store them is in a secure location, such as a safe deposit box at a reputable bank. Here the gold is safe from fires and is very safe from theft. Plus, its location is always known.

Of course, there are costs associated with storing gold in an offsite facility such as a bank. But cutting corners with your gold investment is not the place to save a few bucks. You should always buy the safest and most secure storage space that you can afford.

These are the three common options when it comes to a storage facility for your gold investment:

  • Safe deposit box at a bank. Storing gold, other precious metals, jewelry, and other important objects in a safe deposit box is much safer than storing them at your home. 
  • Bullion bank vaults. These involve banks (the Too Big To Fail banks) that purchase, sell, lease, and lend bullion. Since these banks only buy and sell large quantities of gold, they only allow large gold deposits in bar form only.
  • Bullion depositories. These private security companies specialize in storing and transferring bullion. Their storage facilities use the highest grade of steel and are fully insured. Companies such as Brinks have vaults available for gold storage. Though the fees for storage can be high, these companies offer the highest level of security available.

No matter which option you choose, making sure that your gold is in a safe and protected space should be your top priority.

Factor #2: Manufacturer

Another factor that can affect the value of your asset is the manufacturer(s) of your gold. Make sure that you do your research before settling on a gold manufacturer for the first time. What seems like a good deal price-wise may turn out to be costly down the road. Here are some tips for choosing the right gold manufacturer for you.

Major jewelers carry a representation of quality and service, but their prices tend to be more than a precious metals dealer. The reason is that jewelers incorporate additional charges into the cost. This isn’t necessarily a bad thing, since the jeweler usually offers a good warranty. But getting the same piece for less is certainly possible if you do your research. Gold prices can fluctuate greatly among precious metals businesses.

Certification of purity is important. This gives you the assurance that the manufacturer is selling you the purity stated. Meeting that hallmark is the goal of every gold seller.

Factor #3: Purity

If you are a regular investor, you will know that the value of the metal depends largely on its purity. But with gold, 100% purity is not desired. Why? Gold is a very soft and delicate metal. Adding other metals to gold gives it strength. Therefore, manufacturers routinely use metals like silver, copper, or nickel to form the alloys of gold.

The measurement of the purity of gold in the alloys happens in terms of the unit called “karat.” A higher karat implies that the purity of gold is higher. So, the next time you visit an online or offline store, you will know what it means by 18-karat, 22-karat, or 24-karat, with the latter being the purest form sold commercially. Any karat said to be above 24 is false and should not be bought.

Factor #4: Insurance

Owning anything of value entails risk. Risk of loss, risk of theft, risk of being destroyed in a fire or other catastrophic event, etc. Understanding that risk and ensuring that your investment is covered in case of disaster is vital, especially when the economy is not as healthy and strong as it should be. To protect your investment’s value, investing in the best insurance plan for your gold is a very wise investment in and of itself.

Finding the right insurance policy offering complete protection for your gold’s value against damage or loss requires research and asking questions. Seek advice and compare insurance companies. The perfect policy for you IS out there


Avoid sellers who are not professional dealers or people you do not know. You can save yourself a lot of emotional and financial heartache by avoiding buying from dealers who are not reputable, do not have a strong position in the precious metals industry, and who do not guarantee the purity and quality of their gold in writing. Sometimes a deal that is too good to be true is, indeed, too good to be true.

When you buy from unlicensed dealers and businesses, you risk financial loss that could impact your overall investment portfolio. Being smart and diligent about researching companies from whom you may buy gold is the best way to ensure you get exactly what you are paying for: the best gold available that will appreciate with time and provide a solid financial foundation!


TBN Editor

Time Business News Editor Team