How to Buy Gold?
Published on 12/24/2020 by APMEX
Gold is one of the most well-known and frequently used assets in world history. It's been a store of value since at least 1500 B.C. when Egypt took advantage of the Gold-bearing regions of Nubia to solidify it as the standard. The first pure Gold coins were struck in Lydia in 560 B.C., setting a precedent for years of money to come.
Today, Gold isn't used in day-to-day commerce anymore. From the time those first Lydian coins were struck through the early part of the 20th century, Gold coins were circulated in many countries worldwide. Since that time, though, paper currency and base metal coins have taken over.
What hasn't changed is Gold's position as a store of value.
Gold as a Hedge and Store of Value
Gold's chief advantage today is its stability. Over the last century, the dollar has lost most of its purchasing power as it has been affected by inflation, but Gold has stayed relatively flat. That makes Gold the asset of choice for people who want to safeguard their money against economic shocks.
Since the advent of the Krugerrand, investment-quality, portable Gold coins have been the vehicle of choice for many Gold investors. The Krugerrand was the earliest and still one of the most common. Still, other bullion coins like the American Eagle, the Canadian Maple, the Chinese Panda and the Austrian Philharmonic have made their own inroads with their own unique designs and value propositions. Bullion coins are distinguished from regular coins in that they may have a face value, but if they do, it is nominal, and no one would use it — the Precious Metal value is far higher. All of these coins will have their fineness and the amount of fine Gold stamped somewhere.
The appeal for many investors is the universal recognition of the design. Gold coins backed by governments are still checked for fineness by buyers to avoid counterfeits, but they are more widely recognized and traded than bars.
Gold bars are the other regularly-traded form of Gold. These are usually cast and stamped by a private issuing authority and come in many different sizes. The London Good Delivery bar may be the standard for major investors, but it is well out of the average investor's price range at a minimum of 350 ounces. Most privately-owned bars are around an ounce or two.
In either form, Gold is an easily recognized store of value and the design or issuing authority may confer additional security to the buyer and seller.
Buying and Selling Gold
Gold in coin, bar or round form for investment can be bought and sold several different ways.
- Pawnshops: These often have bullion coins and bars, but their premiums tend to be high.
- Jewelry stores: These sometimes buy and sell Gold coins and bars as well, but it's not their primary business.
- Coin shops: Coin stores will sometimes stock bullion coins as well as their numismatic selection.
- Online, mail order and phone retailers: These retailers stock and sell Gold around the country, and in some cases, worldwide. Premiums tend to be lower, especially for larger companies.