The US may have gone off the gold standard in 1971, but that didn’t change how valuable gold is to our economy. These days, the US still has the world’s largest gold reserve-almost as much as the next three countries combined.
Gold continues to be the best long-term investment out there for how well it retains its value. You, just like the US gold reserve, can buy gold bars and store them as a guarantee for your future. The thing is, buying gold can be a tricky process with a lot of pitfalls and full-out scams.
So read along with us as we discuss 10 helpful tips on the best way to buy gold bars and store them properly.
1. Buy Gold Bars, Not Paper Gold
There are thousands of companies out there that will gladly take your money in exchange for a gold bar. Not all of them, however, will give you physical gold.
Some companies sell paper gold, essentially collateral for real gold that they store somewhere else for you. They make promises to keep it safe for you and relinquish it on demand.
You’ve likely spotted a big problem with paper gold: you have to trust someone else. If their company goes belly-up, there’s a good chance your gold investment will, too.
Plus, paper gold may take on its own liquid market value independent of gold itself-thus being worth less than gold, at times.
That’s to say nothing of the rampant scams in the gold industry, either. Many companies with dubious intentions use paper gold promises to swindle honest investors like yourself. Instead, purchase bullion that you can hold in your hands.
2. Know Which Bars to Buy
Gold bars have four important aspects you should always keep in mind. These include purity, weight, form, and manufacturing.
Purity is obviously the most important characteristic. Pure gold is 24 karat, which is somewhere north of 99.99% purity, and only trace amounts of non-gold material.
Anything less than this is an alloy and is not investment quality. Strive to always purchase gold that is 24K.
Weight and Form
Bars come in all sizes, beginning with the smallest 1-gram (0.03 troy ounce) bars. They go all the way up to the largest, most distinguished 400-gram (12.8 troy ounces) bars.
Then there is the distinction between cast and minted bars. Cast bars are rapid-production ingots with a “natural” gold texture. Minted bars, on the other hand, feature that classic reflective, polished texture.
Choose smaller bars if you want to break up your investment or sell a portion of your gold. Minted bars are the most desirable and retain the highest value.
Believe it or not, the company that mints the gold bars has an effect on its value. Owning a PAMP Suisse or a Perth Mint means your gold is trustworthy, of high caliber, and sought-after by other investors.
Owning gold from less reputable organizations may make it difficult to trade or evaluate your gold.
3. Seek a Reputable Vendor
As we’ve hinted previously, the market is awash with scams of all sorts. New companies spring up every day, making bold promises. You can easily become their next victim if they’re not careful.
First, do your research. The most reputable gold vendors are known throughout the industry. Shy away from those that the experts don’t have a good reading on.
Second, look for assurances of some sort. Check for BBB ratings, backing from financial institutions, and others telling you that an organization is trustworthy.
Finally, read carefully through the documentation and any contractual agreements. With something as expensive as gold, you always want to read the fine print. This can alert you to possible issues with the company you are dealing with.
4. Consider Testing Your Gold
You might purchase a bullion with a trustworthy stamp, but still be skeptical of its quality. A gold seller can put any mark they desire into the bullion, even a fake one. It can bring a lot of peace of mind to test your gold before finalizing a purchase and moving it to storage.
There are a number of ways you can test gold from home. Consider hiring a verified third-party assayer who uses an XRF machine or acid test. This can give you a highly accurate result with a certificate of authenticity that you can use to prove your gold’s quality.
5. Get Your Gold Securely
Depending on the company you buy from, you will either physically retrieve your gold or have it shipped in the mail.
If you are picking it up in person, exercise all necessary precautions. Make sure the gold is not visible and is stored in an unassuming container.
Bring it quickly from the pick-up location to your vehicle, then straight home. Consider bringing along a friend as “backup” along the way. Avoid routes that take you through dangerous neighborhoods and drive defensively.
When shipping gold, there is a procedure. Make sure to take care of the following:
- Insure the gold for shipment
- Get pictures for verification
- Use a padded and secure shipping box
- Track the shipment in transit
- Receive and sign for the shipment
- Verify the content
A lot can happen from A to B. Take the time to weigh the gold, check for scratches or imperfections, and so on. Consider having the gold tested at this point.
6. Buy a Safe
It goes without saying that you shouldn’t store your gold under the mattress. Purchase a high-quality safe that provides all the necessary protections. Safes that are fireproof, waterproof, and tamper-proof are ideal.
Avoid buying the cheapest gun safe at your local hardware store. Reputable safe makers include warranties and guarantees and have a long history of safe-making. These are the sorts of safes thieves won’t be able to compromise.
Avoid electronic safes and biometric safes, as these have the potential to be compromised. Classic lock and tumbler safes are ideal, as no one can bypass them with malware or false biometric data.
Keep your safe in a secure location where it’s difficult to access. Consider hiding it behind a wall or somewhere in your home where no one would stumble upon it.
7. Store With a Third Party
While it’s not a good idea to trust paper gold companies to store your bullion, you can trust other security solutions.
The best option for storage with a third party is a safe deposit box. These are in near-impenetrable buildings with several layers of security between your gold and thieves. They only allow access to you and any trusted confidants.
Another alternative is to trust a custodian. Custodians specialize in handling your valuables, but it will depend on the custodian in question. Make sure to establish their bona fides before trusting them.
8. Exercise Good Storage Practice
Even when your gold is in storage, there are a few helpful tips to follow while handling it.
First, avoid frequently taking your gold in and out of storage. Limit contact and keep it locked up for as long as possible. Anytime you remove it from storage, you’re opening the possibility for something to happen.
Second, avoid transporting gold from one place to another more than you need to. For example, when you remove your gold to get it tested by a third party. Return it immediately to its storage location after testing to reduce the risk of incident.
Finally, avoid trusting other people with your gold. Even close friends and family could betray your confidence. Only give access to your gold to a very small circle of confidants-if any at all.
9. Get Insurance
Insurance is vital, especially if you are storing gold at home. If there is a robbery or a natural disaster, you want a surety for your gold in case something happens.
Insurance options can be costly, especially to insure all of your gold, rather than a portion. How much you insure is up to you. Just know this might be the last bulwark protecting your investment.
Make sure to provide detailed information and documentation to your insurance provider. Have a certificate of authenticity detailing the purity, weight, and manufacture of your bullion. This ensures you get full compensation for the real value of your gold in the event you lose it.
10. Don’t Store It All Together
Consider storing your gold apart from other valuables. As the saying goes, don’t keep all your eggs in one basket. While it’s good to have one secure storage location, you may wish to have multiple.
You could store a portion of your gold at home. Then, you store the remainder in a third-party safe deposit box. If something happens to one of your stashes, the other remains unaffected-preventing your entire investment from getting wiped out.
Buy a Gold Bar From CMI Gold & Silver
When you buy gold bars, there’s a lot more to the process than just finding good market prices. Buy physical gold from a reputable vendor in the proper amount for your investment strategy. Insure your gold, and store it on your own or with a third party you trust.
CMI Gold & Silver is a trustworthy, straightforward way to get access to real gold bullion. Get started with our 1-oz gold bars from Perth Mint, Royal Canadian, and other world-renowned manufacturers.