How To Buy Gold

How To Buy Gold

There is no better choice than gold bars if you are looking to invest in physical gold at the lowest possible price. Coins may appeal more but the manufacturing and packaging of coins, adds up the cost whereas gold bars are the most in demand form of gold in the industry. Everyone from an average investor to banks,, buys and store gold bars. There is very little to go wrong with, here are some tips to help you buy the right form of gold you are looking for.

Bars Over Coins

The advantage gold bars have over coins is that they are less expensive than coins because premiums are lower on bars. Coins have designs and patterns on them that require more labor and machine costs.


Bars come in all weights and sizes; you can have small one ounce bars as well as big 400 ounce ones. Firstly, the size and weight depends on the funds you have available with you, secondly it depends on your needs. The premium on bars reduces as the size increases because bigger bars are less costly to produce, however bigger bars reduce the mobility and the ability to divide the gold into smaller denominations. This is why it is preferable to mix up the sizes. Big bars maybe difficult to liquidate, although it is not very difficult as banks will always purchase the bars but it maybe difficult to find individual buyers for big bars if you are not so keen to use the banking channel.


Investors with deep pockets can afford to buy bigger bars but once again, it will be preferable to buy bars in smaller denominations as well. However there is one downside to owning a lot of smaller bars and that is the premium cost, small bars have a higher premium and buying many small bars will take the premium cost up as compared to buying a big bar with the same volume.

Stamps And Hallmark

Next step is to look for proper stamping and hallmark. Make sure to buy bars that have a recognized hallmark and proper stamping. Hallmarks and stamps indicate the authenticity and purity of a gold bar, some private mints do not include this information and this could mean that their gold is either not pure gold or not up to the required standards of purity that they claim to have.


The gold should be stamped with its purity value and weight and the hallmark refers to the brand of the refiner or manufacturer. There aren`t many so it will do well to have a bit of info about the main refiners and manufacturers, the more known ones with a reputation in the market. One of the advantages of a highly reputable hall mark is that it makes the gold bar highly liquid as buyer trust it and do not have to check the bar further.


Some of the world's most recognized refiners are Johnson Matthey, Argo and Harrah’s, PAMP, Suisse Valcambi and sovereign mints such as the Royal Canadian Mint. There are others such as Sunshine mint and Republic metals.

​​​​​​​Buy From A Reputable Dealer

You should always buy gold from reputable dealers, ones with an established reputation in the market. You can check the websites of different dealers, go through testimonials, read through their policies and check if they have a buy back policy. An honest dealer will not only guide you towards the best bar for your needs but they will also educate you along the way.


In order to assess the reputation of a dealer you can check Better Business Bureau or Trust Pilot ratings, these rating agencies prefer dealers with experience and repeat customers. Do not just fall for the certified logo on the dealers` website, instead check out the listings of rating agencies to make sure that they are listed. For example, if you are buying gold with your retirement account be sure to check the BBB rating, TrustPilot rating and reviews of the many Gold IRA companies out there before making a purchase decision.


Another way to find out about the dealer is to see if they try to sell or deal only in expensive products. For example a dealer may try to steer you away from bars and coins towards more expensive rare coins, this is usually a sign that they may try to rip you off. They will push you to try the expensive product, not because it is better but because they can make a better margin or commission over it.


As mentioned above, it is important that your dealer offers to buy back the gold from you. Look for a buy back policy because if a dealer is not willing to buy their own gold back from you, this is a major red flag that indicates that there is something wrong with the gold they are selling. Having a buy back policy will mean that you will always have an available buyer, most dealers also offer to buy back at an attractive resale price. ​​​​​​

Online Store Or Walk In Store

Once you have carried out your search and identified trusted or trustworthy dealers, the next point to consider is the mode of purchase. Online purchase or a walk in store? It has been observed that online stores have certain advantages over walk in brick and mortar stores.


Online stores make the process quick, easy and convenient, purchases can be made at any time of the day and many online dealers are cheaper than walk in stores because online stores have much lower overhead costs.


Keep these tips in mind when looking for gold or precious metals and you should steer clear of any major problem. Once again remember, carry out proper due diligence before selecting the dealer of your choice as proper due diligence can help you avoid shady dealers.