A Beginners Guide To Buying Gold

Posted on Jul 25 2013 - 1:52pm by Israel Brown

Golden People

Gold has been one of the most sought after metals for centuries across the globe. There is a multitude of reasons for this with perhaps the most important for the majority of us is the look of metal. With a very distinctive yellow glow, it is the most recognizable precious metal today. Gold has been utilized for many purposes over the years.  We all have or know someone who has at least one item of Gold jewellery whether it is a necklace, watch or more commonly a wedding or engagement band. If you have seen any history programs, you will have seen many examples of Gold in ancient times whether it was from an Egyptian tomb, a European King or Roman Coins. Our love of the precious metal has not diminished over the years with record breaking gold prices being hit regularly throughout the last eighteen months. If you are looking to dip your toes into the Gold buying market, we have a few points to note and tips to help make sure you get the right Gold item for you.

Making a Gold Purchase

There is a host of information online available for those seeking new investment opportunities in Gold. It can be a little daunting to start, but if you get the first few purchases right, you may find that there are some great benefits from investing in Gold. Gold can be bought in many forms from buying a quality piece of designer jewellery which you can then use while you own it and sell when you think the investment has peaked, or you want to change to another item. You can buy Bullion bars at many Gold Merchants, and you can either take the Gold home to keep safe under the bed or if buying a larger quantity you can choose to keep the Gold in the safe of the Merchants for a fee. Gold coins are another favorite with those looking to get started with investing in Gold. The most popular of these would be Sovereigns, American Dollar and Buffalo, Canadian Maple Leaf, Krugerrands and the Austrian Philharmonic.

Key points to note when purchasing Gold

  • Owning Physical Gold like Coins, Bullion Bars and Jewellery is a safer investment and gives you pride of ownership and can be passed to family members much easier than futures and other stock based investments
  • Buying Gold futures can be financially rewarding although this is classed as higher risk investment, if prices rise you can make a lot of money in very little time but if the price drops there is a chance of losing much of your original stake
  • Pure Gold is 24 karat. This means the gold is 24 parts Gold which is 100%. In the same token 18 karat denotes that Gold is 18 parts gold and 6 parts of other metals.
  • Authentication is very important. Use reputable dealers and you will be furnished with a certificate which will state precisely what you have bought. No certificate then no purchase.
  • Diversification is important if you are seriously looking to make an income from buying and selling gold. Having all your investment in high risk ventures may pay off most times but the losses can be big so make sure you have a good balance of high to low risk investments within your portfolio.

Conclusions of the Gold Market

In my experience of buying Gold, I have found that finding a good Gold dealer and sticking with them will benefit you tenfold as most merchants will take the extra time to explain the potential profits and the pitfalls of getting involved on the Gold Market.  For those who are looking to get involved at a lower level or juts have  a fondness for Gold, it is highly recommended buying Jewellery pieces, which you can wear. More importantly, buy items which will keep their style so when the time comes to sell it you will have no shortage of potential buyers.  I had a similar experience this year with an item I have had for a few years. One trip to the Gold buyers in Melbourne and I had recouped my investment with a tidy little profit which now frees up some money so I can go and get the next must have a piece of jewellery for my collection.

Photo Credit: Flickr/epSos .de

About the Author
Israel Brown

Israel Brown grew up in a typical English family. Mr. Brown is very inquisitive and is always open to learning more about everything. He keeps a close look at the developments in the economy and also invests in gold himself. Sometimes, he asks tips from his friends who are gold buyers in Melbourne.