When you decide to put your money in gold bullion, you are following thousands of years of tradition in putting your money in an investment that will endure through times of instability – and if you are choosing bullion coins, you’ve also got an exciting new hobby. But for first-time buyers, there are plenty of questions to be answered.
What is bullion, anyway? Bullion, gold or otherwise, is defined as a bulk quantity of precious metal of a defined weight and with gold, bullion comes in both bar and coin forms. Bullion coins are considered distinct from other gold coins because they exist primarily as an investment vehicle and are legal tender.
Why buy gold bullion? The simple answer: Insurance. Over the centuries – including this one – gold has proven itself time and time again to be a safe, solid and easy to sell investment, serving as a store of wealth secure from crises like stock market collapses and banks going bust. Many buyers are also attracted to the metal because, unlike shares or bonds, it represents a physical investment that they can choose to store in their own home – and its value does not depend on any particular person or institution’s ability to pay.
What kind of bullion to buy? Experts say that ounce gold bullion coins such as South African Krugerrands can be an excellent way to put your money in gold, especially if you are just getting started. They are easy to buy, easy to store and should you need to sell some of your bullion, it is a lot easier to sell 10 of 100 coins than a tenth of a gold bar. But bars – which come in sizes from one gram to 400 ounces – can turn out to be a more practical way of investing in gold if you are looking at investing very serious amounts of cash.
How much to buy? This is a tough question for any investor – and much will depend on how optimistic they are about the state of the world economy! As a general rule of thumb, gold expert Michael J. Kosares recommends putting anywhere from 10% to 30% of your assets in gold, depending on your take on the outlook for the world’s financial and political situation.
Where do you buy gold bullion? This will depend on how much bullion you are buying, and which variety you have chosen – and remember that gold dealers have bills to pay just like everybody else! Experts say Hong Kong represents one of the cheapest places in the world to buy gold coins but instead of hopping on a place, most investors opt for large, established dealers, whether they are planning to have the physical gold in their possession or to have it stored somewhere. There are also plenty of options online, though obviously they need to be treated with caution – ensuring the right degree of purity is a must, as is obtaining a Certificate of Authenticity
When to Buy? This is another tricky question for the investor, and will depend on why they are buying gold, and how long they plan to keep it. Experts say that the time to buy gold is “When you need it” – and if you foresee uncertainties ahead, that time could be now.