Once someone has decided on a purchase, the obvious question is – how do I buy gold? The whole business of buying gold can seem daunting, an affair best left to connoisseurs and experts.
This need not be the case at all, but before answering the “how to buy gold” question, the would-be purchaser needs to decide in what form they plan to hold their gold and where they choose to buy gold from.
Different forms of gold
Physical vs. “Paper” gold
The immediate choice is between physical gold and a “paper” version, such as an Exchange-Traded Fund (ETF), a type of security that tracks gold but trades on the stock market, like a share.
Should the buyers opt for physical gold, new choices will present themselves. Should they buy gold bars or coins? Will the buyer take possession of the gold or store it in a vault? And if the latter, will the gold be “allocated” – in other words, will specific Bullion be earmarked with the owner’s name on it – or will it be “unallocated” – a cheaper storage option that simply entitles the owner to gold of a certain value?
Can I Buy Gold on the Internet?
Despite being the oldest monetary medium, dating back millennia, buying gold, and selling it, is increasingly done over the internet, a forum for doing business that barely existed 25 years ago.
Should the buyer prefer to buy gold through a more traditional route, such as over the telephone or even on the vendor’s premises, the internet is probably the best research tool in terms of comparing dealing charges, service and other factors.
Buying Gold ETFs
Gold ETFs are available through a stockbroker or a bank. Despite their “paper” or electronic status, they are usually backed by physical gold of a certain standard, although this gold may be stored in a different country – such as Switzerland – or even on a different continent, as in gold stored in New York. The buyer is most unlikely ever to lay eyes on it.
Buying physical gold
Physical gold can also be bought through a bank or, perhaps more commonly, through Bullion dealers. Along with the up-front charges, when buying gold it is important to compare any other fees and to look at the provision (or not) of carriage and insurance in cases where the buyer wishes to take delivery of the Bullion. For those who prefer to leave their Bullion with a bank or dealer, there will be vaulting charges to pay, which can vary considerably from one institution to another.
Buying gold coins or bars
In such cases, the decision between coins and bars usually settles itself by reference to the funds available to the buyers; coins are more suitable for those making a modest outlay while bars offer a straightforward means of acquiring larger quantities.
It is usually the case that the larger the bar, the lower the premium over the value of the gold contained within it.
That said, larger bars lack flexibility in terms of changing the size of someone’s holdings, of buying and selling. An advantage provided by buying gold coins. Furthermore, The Sovereign, Britannia, Lunar and Queen’s Beasts ranges of coins, being legal tender, are Capital Gains Tax (CGT) exempt in the UK.
It is important to be aware of the differences between Bullion coins and commemorative coins that carry a premium because of their numismatic value, their appeal to coin collectors. When buying gold as a monetary asset, select only standardised Bullion coins, such as the Britannia and The Sovereign, as they offer a lower premium over the precious metal value.
Buying gold from The Royal Mint
Buying Bullion coins direct from The Royal Mint couldn’t be easier. Create and verify your Royal Mint Bullion account in less than 10 minutes, add funds and purchase gold and silver Bullion immediately. All Bullion is purchased at the realtime prices and you can choose to have it delivered or store your gold in The Royal Mint Vault. For gold stored in The Vault there is a guaranteed buy-back service at a competitive market price. Create your account today and begin buying gold from Royal Mint Bullion within minutes.