How to Buy Gold and Silver

This webpage covers the best ways on how to buy gold and silver.

Not all of them are equal. Some are much better than others.


Gold and Silver Bullion - How to buy gold and silver Ownership of gold and silver bullion
(

silver coins, junk silver coins etc) is by far the best way to own these precious metals. By taking delivery on your gold and silver you have several advantages.

• There is never any question how much actual silver or gold you own.
• You have full control of the metals and can sell any amount at anytime you want.
• It is one of the least inexpensive ways to own these precious metals.

If you take possession of your gold and silver you should keep the metals in a safety deposit box at a bank or invest in a good home safe, or both.


Gold and Silver Coins


Storing of Precious Metals – Dangerous!

If you would rather store your precious metals (with a company that offers that service) look into bonded and insured silver and gold vaulting options.

But be very careful! Make sure you have a rock solid company to store your gold and silver. There are unscrupulous storage companies where people have lost a great deal of their holdings.

Before considering this option read the following article about the bankruptcy of MF Global and how they confiscated their customers precious metals.

Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global


Numismatics – How to buy gold and silver
A numismatic coin is a collector coin that has a value in significant excess of the base metal. When you purchase these metals you must pay:

• The cost of the silver.

• The dealer’s premium.

• The cost of the numismatics premium. This can be very high. Think 30-50% or more. Some dealers can be unscrupulous and charge much more of a premium than the coins are worth.

When you decide to sell your numismatic coins you are at the mercy of the current desirability of the coins. You might make a profit, but you might not.

Think of it this way. If the economy takes a dramatic downturn people will need money just to pay for basics such as food and rent. Many people will sell their numismatics (at whatever price they can get) just to pay their bills.

This would put a large downward pressure on the prices. The numismatic premium may drop dramatically and be near the price of the bullion gold or silver.

Consequently, you will get more bang for your buck purchasing gold and silver bullion rather than purchasing numismatics.

Unless you are an expert at numismatics there are significant pitfalls to purchasing silver and gold this way. Not Recommended.

Gold and Silver ETFs - How to buy gold and silver
When you invest in Exchange Traded Funds (ETFs) you do not own the silver. Fund managers contract with a custodian to hold your silver in a vault. Custodians are usually large international banks serving many different customers.

The precious metals are usually not moved around during buying and selling. Title to the gold and silver bars is transferred from sellers to buyers by book entries on massive computers.

There is a belief among the some metal experts that silver and gold ETFs may hold less than the amount of precious metals they are suppose to own. If we have severe economic problems there may be cause for significant concern. Although there are concerns for the long term, relatively short term ETFs are one way to consider making money in silver and gold.


Silver and gold stocks - How to buy gold and silver
Owning silver and gold stocks in mining companies is a common way people use to invest in silver and gold. You have moved up the supply chain significantly and are now in the stock market.

If you study stocks carefully and feel comfortable investing this is another option. However, if you are investing for wealth preservation for hard economic times, this is probably not a good strategy.


More ways on How to Buy Gold and Silver
The more exotic ways of buying silver and gold are:

• Leverage accounts, futures and options - Leverage accounts, futures and options are financially risky for most investors and even for the most experienced ones. This is not recommended unless you are very knowledgeable in these areas.

• Pools and Certificates - Purchasing pools and certificates makes you a creditor of the bullion bank storing your precious metals. Your gold and/or silver are held in unallocated storage which means that your metals are commingled with everyone else’s metals. When you buy these pools and certificates the bank becomes the legal owner of the precious metals.

If the bank gets into financial trouble, your gold or silver could be sold to stop a run on the bank. Because there isn’t deposit insurance on precious metals they aren’t covered in case of a band loss. Deposit insurance is only good for currency. Not Recommended - Very risky!


The Next Step
This page has covered how to buy gold and silver. Next, see: Where to buy gold and silver.

Return from How to Buy Gold and Silver to Buy and Sell Gold