Buying physical silver or gold and make it as an investment is not always as easy as it sounds. Newcomers that are new to this kind of investments sometimes get lost in different options:
“Should I invest in valuable sovereign coins or minted bars?”
“Are limited and rare coins a good investment?”
A wise investor evaluates the bullion options by its prime and the premium on the gold spot price. The thing is, the premium is only a small part of the equation. It does not mean that you will get the premium back once you sold the item. The worst part is, there are untrustworthy and fraudulent dealers out there whose only goal is to take advantage of unsuspecting investors.
These people will trick you into buying numismatics or collectibles that have pricey premiums but do not retain their value over time. Because of this, it is imperative to get a better understanding of the industry as well as the precious metal you are planning to buy before you try investing your hard-earned money into this market. In this article, we will answer some essential questions you need to ask yourself before spending your money on precious metals like gold or silver.
What is the surefire way to invest your money in precious metals?
You can invest in these precious metals looking for gold or silver bars for sale and buying bullion coins or bullion bars. You can also purchase through financial products like ETFs or gold and silver exchange-traded funds. While investing your money in silver or gold using ETFs is quite appealing because of its convenience, there are some significant issues that all investors need to know concerning this kind of investment.
For example, if you are investing using exchange-traded funds, you do not own the precious metal. You do not have a claim on the gold or silver that is within the fund. It means that you can’t use the precious metal if you needed it.
In contrast, one of the key advantages of buying physical coins, bars or bullion is that you own the items. Not only that, you now own an expensive asset that you can store outside of the financial system. It minimizes the counterparty risk or getting broke if the great depression strikes again. Counterparty risk is a risk that other parties under the agreement will fail to live up or default its obligations. Because of this, it is a better option to buy precious metals like gold or silver as an investment.
Should people buy silver bars or gold bars?
While both have attractive features, gold is a better investment compared to silver for an average investor. It has a more significant market value that is driven by jewelry demand and investment. The price is less volatile compared to silver; meanwhile, it has a stronger relationship to any economic activity and more speculative.
It is because silver has a lot of industrial uses. Because of this, it is used during times when its price is very low. One key advantage of silver over gold is that it is a lot cheaper. That is why it is more accessible to investors that do not have enough money to invest in gold.
Which is a better investment, bullion coins or bullion bars?
Coins like American Eagles are one of the best types of valuable metals to invest in. It is because sovereign coins are very recognizable, sells at a higher premium and easy to trade compared to bars. You can buy small bars like a 1-ounce bullion bar, but they are harder to sell and the transaction can cost a fortune. Want to know more about American Gold Eagle? Visit https://en.wikipedia.org/wiki/American_Gold_Eagle.
For people who are looking to purchase large quantities of gold or silver or better known as institutional buyers, larger bullion bars are your best option because of lower premiums. With all this uncertainty that is happening in today’s global economy, it is imperative to add and diversify the security in your physical, valuable metals to your investment strategy. The thing is, it is good to invest in gold or silver bullion bars, but you need to make sure you know everything about the industry.