The first time you buy gold and silver is a memorable experience as precious metals are a famous and ancient store of wealth. I remember holding my silver dollars and small gold bar the first time.
Below are several things to consider as a first-time buyer for excellent investing.
How to Buy Gold and Silver Online
It’s usually easiest to buy physical gold and silver online so you can quickly find the best price and have an ample selection to choose from by following these steps:
- Research current prices: Determine the current spot price for your desire to compare the current coin and bar prices and avoid expensive premiums. I also suggest researching free shipping minimums and larger order discounts.
- Find a reputable dealer: Many online dealers and gold IRA companies make it possible to buy gold safely. Start by researching customer reviews on platforms, including Trustpilot and Google Review, to find the dealer you’re most comfortable with.
- Ask questions: While dealers can’t provide personalized advice, you can start by asking them or yourself:
- Which offerings are the best store of value?
- Is silver or gold the better investment?
- Which metals have the lowest premiums?
- Should I buy gold coins or bars?
- Is buying rare coins or bullion better?
- Are coins or rounds better for my strategy?
- Is it easy to store?
- Can you sell back your metals quickly and for a high profit?
- Do you need IRA-eligible metals for tax-advantaged investing?
- Decide on the metals: There are many gold and silver investment options. Funding your account with an ACH or wire transfer is usually best to minimize transaction fees versus credit card or PayPal payments. You can also roll over a 401(k) or IRA.
- Purchase your precious metals: Bullion coins, rounds, and bars are favored since estimating their market value and investor demand is easy. Shipping usually occurs a few business days after your payment clears.
- Explore storage options: Home storage is the most affordable and suitable for small collections you want immediate access to. However, vault storage is required for precious metals IRAs and is ideal for sizable amounts to attain peace of mind.
I walk through the above process when I’m ready to buy gold and silver.
First, I make an initial list of what I can afford with my budget. Next, I compare several trustworthy dealers to find the lowest price to recoup the buyer’s premium and shipping costs sooner.
5 Best Ways to Buy Gold & Silver
Several affordable and convenient options exist for buying physical or paper precious metals.
Gold or silver IRA
A gold IRA lets you purchase physical coins and bars of the highest purity levels. You can enjoy traditional or Roth IRA tax benefits. Current IRS tax rules require storing your IRA-eligible metals at an approved storage vault.
Physical gold and silver coins or bars
You can also buy gold bullion with a cash account to store at home or a vault of your choice. Consider this option to have flexible investment options and to avoid IRA fees or early withdrawal penalties.
Gold ETFs and mutual funds
Shares of gold-linked funds track the metal’s spot price, have more liquidity, and don’t require storage. This investment choice is ideal for short-term trades or when you don’t want to hold a tangible asset.
Gold mining stocks
Buying individual stock shares of companies that mine precious metals can produce outsized investment gains over a short period. However, these investments are more volatile and may not rise in price while gold’s spot price is.
Futures and options
Purchase commodity contracts to predict future prices and earn potentially outsized gains on successful trades. This strategy may require a margin account and is better suited for experienced investors who can manage risk.
I hold several of these investment choices to diversify my portfolio and take advantage of different market opportunities.
While I prefer owning physical metals, I also buy gold and silver stocks since these indirect investments can be cheaper, better for short-term trades, and do not require storage.
Why buy precious metals?
Here are several potential benefits of allocating a small portion of your portfolio to buy gold and silver.
- Portfolio diversification: Precious metals negatively correlate to stocks and can outperform the stock market during recessions to minimize downside risk.
- Economic security: Gold, silver, and other metals have constant industrial demand and can make them an excellent long-term investment.
- Protection from inflation: Physical metals have a limited supply that usually increases their value as central banks increase the money supply, devaluing cash and stocks.
- Wealth preservation: Buying gold coins and bars lets you build generational wealth and preserve your purchasing power as fiat currencies come and go.
Once you have an established equity portfolio, a common suggestion is to invest between 5% and 10% in precious metals to benefit from its upside potential and serve as an inflation hedge.
Should I buy gold and silver?
Historically, gold and silver have been reputable long-term investments, especially during high inflation or stock market recessions.
For millennia, civilizations have viewed precious metals as a store of wealth, especially when dollars and national currencies depreciate.
I like buying gold and silver with cash to diversify my portfolio and have the flexibility to sell it anytime without IRA withdrawal penalties.
Precious metals can also be a good retirement asset as you shift away from riskier assets such as stocks, but don’t want to rely solely on bonds and fixed income.
As a reminder, no investment is risk-free and each precious metal type performs differently.
Further, premiums and taxes reduce your potential investment returns. You may start with a silver IRA as this metal is cheaper than gold and easier to buy with little money.
FAQs
Can I buy gold and silver from my bank?
Most banks don’t sell physical bullion as the gold standard no longer exists. An exception can be for private bank clients. Usually, you must contact an online bullion dealer, coin shops, or self-directed IRAs.
Is it better to buy gold or silver?
Gold typically offers better returns and is less volatile, although it’s more expensive. In contrast, silver is more affordable, but its historical performance is more volatile as it relies heavily on industrial demand.
What is the best way to buy gold as a retiree?
A gold-backed IRA offers tax advantages as you can roll over an existing 401(k), IRA, or a similar retirement plan instead of having to invest new money.
