Beginners Guide to Investment in Physical Gold

Gold is a popular form of investment that allows you to hedge your portfolio against financial uncertainties. They generally provide stable returns and do not experience extreme volatility in returns as is common with stock market investment. The precious metals are also effective in combating the effect of inflation in eating away the purchasing power of your hard-earned savings.


You have the following options when it comes to buying physical gold.

  • Gold Bullion and Bars
  • Gold Bullion Coins
  • Collectable Gold Coins
  • Gold Jewelry

Gold Bullion and Bars

Purchasing gold bullion or bars is the easiest and safest way to invest in gold. There are a large number of gold dealers that specialize in buying and selling of gold bullion and bars. In selecting a gold bullion dealer, you should consider the premiums they charge for selling the gold. Gold dealers charge premiums to offset the cost of storing and insuring the gold. Most online dealers offer the lowest premium on gold as they entail lower cost as compared to brick and mortar gold dealers.

The value of physical gold bars depends on the weight and purity of the gold. Purity of the gold is measured in Karat with 24-karat gold being the most pure gold with no alloy mixture.

Before buying gold bars, you should consider where you would store them. Some people place the physical gold in their own homes citing the 1930s era when government confiscated gold stored in banks vaults of most Americans due to economic meltdown.

However, placing physical gold in the home increases the chance of theft, which is the reason why most Americans feel secure in placing their gold bars in their banks vaults.

Gold Bullion Coins

Gold bullion coins are another investment option available to you to invest in physical gold. Similar to gold bars, there a number of gold coins dealers that specialize in these physical gold items and charge a premium on sale. The premiums on these gold coins are greater as compared to gold bars due to their smaller size.

Generally, gold bullion coins have the following characteristics.

  • Have purity of no less than 900 thousandths
  • Printed after 1800 and have been or still are legal tender in their country of origin
  • Available in the fractions or multiples of 1 toy ounce
  • The ISO currency code of gold coins is XAU

The American eagle coins are the most popular gold bullion coins available in 22-karat. Next in popularity are the Canadian Maple Leaf series that is available in the form of gold, silver, palladium and platinum.

Collectible Gold Coins

Collectible gold coins possess certain aesthetic values for which they are in demand with gold investors. The value of these coins exceeds their original gold value and is determined by their numismatic value. Professional graders appraise the coins and assign numismatic value to these coins that range from one to seventy. The value of collectible gold coins is determined by certain factors like the year in which they were minted, the type of coin, the place they were minted, aesthetic appeal, and condition of the coin.

You have to research properly before buying collectible items, as the buying process is not that straightforward. However, if you properly research before buying these collectible gold coins, you could earn windfall returns on the investment.

Gold Jewelry

Finally, gold jewelry is the most traditional form of investing in gold. Gold jewelry has never gone out of style and even today, it is popular with many investors. Gold jewelry, however, is not available in pure form. They are available in 10, 14, and 18-karat gold. The reason is that pure gold (24 karat) is soft and malleable and cannot be used practically as jewelry.

Investing in physical gold is a perfect option to protect against future economical, financial, and political uncertainties. It also a great investment option to safeguard against speculative investment. Most financial experts recommend that you should put a certain part of your investment in gold to gain from the myriad benefits of investing in gold.


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