How to Buy Gold Safely

Why People Consider Gold

Throughout history, gold has been used as a store of value during times of economic uncertainty. Some people include physical gold as part of their broader preparedness planning. This guide explains the basics of how gold purchasing works—the mechanics, not recommendations.

Common reasons people consider gold:

• Hedge against currency devaluation or inflation
• Asset diversification
• Portable wealth for extreme scenarios
• No counterparty risk (physical gold you hold)

Important limitations to understand:

• Gold prices can be volatile—you can lose money
• Physical gold has storage and security challenges
• Converting gold to cash quickly may mean accepting lower prices
• Gold doesn't produce income like stocks or bonds
• There are tax implications for buying/selling

For a balanced view of risks, see: Risks and Limitations of Gold

Types of Physical Gold

Gold Coins

Government-minted coins are popular for several reasons:

• Recognized worldwide: American Eagles, Canadian Maple Leafs, South African Krugerrands, Austrian Philharmonics
• Easier to verify: Known weights, designs, and anti-counterfeiting features
• Various sizes: 1 oz, 1/2 oz, 1/4 oz, 1/10 oz
• Higher premiums: Cost more over spot price due to minting costs and recognition

Gold Bars

Produced by private mints and refineries:

• Lower premiums: Generally cheaper per ounce than coins
• Various sizes: 1 gram to 1 kilogram (1 oz bars are common)
• Assay cards: Often come with certificates of authenticity
• Less recognizable: May require more verification when selling

Gold Rounds

Coin-shaped but privately minted:

• Lower premiums than government coins
• Not legal tender
• Various designs from different mints

For preparedness purposes, many people prefer recognized government coins for their liquidity and ease of verification.

Understanding Gold Pricing

Spot Price

The spot price is the current market price for immediate delivery of gold. It changes constantly during market hours based on trading. You can check spot prices on financial websites.

Premium

The premium is the amount above spot price you pay. It covers:

• Minting/refining costs
• Dealer markup
• Distribution costs
• Supply and demand for that specific product

Buy vs. Sell Spread

Dealers buy gold from you at below spot price and sell to you at above spot price. This spread is how they make money. Understand that you may not recover your full purchase price if you need to sell quickly.

Finding Reputable Dealers

Types of Dealers

• Online dealers: Often lower premiums, wider selection, but shipping required
• Local coin shops: Can inspect before buying, build relationships, no shipping
• Shows and conventions: Multiple dealers, can compare, cash transactions common

Signs of a Reputable Dealer

• Established business: Years in operation, physical address, verifiable contact
• Industry memberships: Professional associations in their country
• Transparent pricing: Clear premiums, no hidden fees
• Good reputation: Check reviews on independent sites, not just their website
• Clear policies: Return policies, shipping insurance, payment methods
• Proper documentation: Receipts, invoices, certificates where applicable

Red Flags to Avoid

Avoiding Common Scams

Gold scams exist because gold is valuable and many buyers are unfamiliar with the market. Common scams include:

• Counterfeit products: Fake coins and bars, often tungsten-filled
• Bait-and-switch: Advertise low prices, then push expensive "numismatic" coins
• Grading scams: Overgraded coins sold at inflated prices
• Storage scams: Selling gold that doesn't exist or isn't allocated to you
• Advance fee fraud: Asking for payment before delivering non-existent gold

Protection strategies:

• Buy from established, reputable dealers only
• Learn basic authenticity tests (see Gold Authenticity Testing)
• Start small until you know and trust a dealer
• If a deal seems too good to be true, it probably is
• Keep all documentation and receipts

The Buying Process

Step 1: Research and Compare

• Check current spot price
• Compare premiums across multiple dealers
• Verify dealer reputation
• Understand total cost including shipping/insurance

Step 2: Decide What to Buy

• Consider your goals (liquidity vs. lower premiums)
• Government coins for easier selling later
• Bars for lower premiums on larger amounts
• Smaller denominations (1/10 oz, 1/4 oz) for flexibility

Step 3: Make the Purchase

• Payment methods vary: bank wire, check, credit card (often higher fees)
• Some dealers lock price at order time; others at payment receipt
• Get written confirmation of your order

Step 4: Receive and Verify

• Inspect packaging for tampering
• Verify product matches order (weight, design, condition)
• Perform basic authenticity checks
• Document and store receipts

Step 5: Store Securely

See our guide: Gold Storage Options

Frequently Asked Questions