How To Buy Gold Bullion

How To Buy Gold Bullion Overview

With gold prices today at or above $1,000 per ounce, investors are trying to figure out the most cost effective way to buy gold bullion. Buying gold bullion is not as easy as buying shares of stock. However, through the use of gold ETF funds, learning how to buy gold bullion has become easier.

But gold ETF funds are not the only way to buy gold bullion. Gold bullion can be purchased in many different forms. If a gold investor is looking to purchase physical gold to hold and store, he can purchase gold bullion bars, scrap gold, gold bullion coins, or rare gold coins with numismatic value.

How To Buy Gold Bullion Coins

Mints around the world sell gold bullion coins for investors and collectors. Some of the most desired gold bullion coins are the American Eagle Gold Coins sold by the United States Mint. However, some other popular gold bullion coins are Gold China Panda Coins, Royal Mint Sovereign Gold Coins and South African Krugerrand Gold Coins.

There are four main drawbacks to buying and selling gold bullion coins. The first is the acquisition cost. Gold dealers will not sell you gold coins at the gold spot price. Instead, the Mint charges a premium to cover its overhead and profit and the dealer that you purchase from charges a premium to cover its overhead and profit. If you are buying online or through the mail, there will also be transportation fees. In addition to the acquisition costs, buying gold bullion coins includes a storage cost, insurance cost and sale transaction fee often in the form of a sale price below the current gold spot price when you go to sell the gold coins.

A best practice for how to buy gold bullion coins is to find a local gold bullion coin dealer to buy from. If you buy regularly or in bulk, you can often get lower prices from a local gold bullion coin dealer. This is especially true if you tell the dealer that you want to buy XX ounces ahead of time. The coin dealer can acquire the gold bullion coins and sell them to you right away knowing he has a client. I think that this is the best way to buy gold bullion coins. But, it is not the most cost efficient way.

How To Buy Gold Bullion Through Gold ETF Funds

Buying gold bullion using gold ETF funds is the most cost efficient way to purchase gold bullion. The purchase commission and sale commission on gold ETF funds transactions is often much lower than the premium you pay when buying gold coins. If you would like to read more about investing in gold using gold ETF funds, I encourage you to read my primer on Gold ETF Funds. While you are at it, you might want to also read our popular article on understanding gold market prices.

I believe that buying gold ETF funds is the most cost efficient way to invest in the gold market. However, many investors want to own physical gold. The reason being that ETF funds are still more subject to government regulations. But at the end of the day you can’t actually turn in your shares in the gold ETF fund for the physical gold in the vault.

Therefore, if you want to buy physical gold bullion, I recommend buying gold bars and gold coins. If you have any additional questions for how to buy gold bullion, please ask them in the comments below.