4 Considerations to Keep in Mind Before Buying Precious Metals
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Purchasing precious metals isn’t as simple as stepping into a store and buying a gold/silver bar or coin. There are many factors you need to consider before you make your purchase.
Let’s take a look at some of them:
1. What Precious Metal Should You Buy?
Most people choose to invest in either gold or silver; gold happens to be more popular for investment purposes. Even though silver is used across major industries, gold has a greater liquid market, which is primarily driven by the demand for gold jewelry.
That being said, the demand for silver is closely related to economic activity. Because silver has so much industrial usage, even when the market is down, industries continue to purchase it; in fact, the demand for silver increases during down cycles because of its low prices.
The biggest advantage of silver is that it is significantly cheaper than gold, making it more accessible to investors on a budget.
2. Bullion Coins VS Bullion Bars
People who’re looking to invest large amounts of money should purchase bullion coins like Gold American Eagles. Sovereign coins are easily recognizable making them easy to trade too. Compared to bars, sovereign coins sell at higher premiums. Bullion can be purchased easily but they are more difficult to sell back and they have higher transaction costs.
Bullion bars are more suitable for institutional buyers who are purchasing large quantities of precious metals because of lower premiums.
3. What Are The Best Bullion Coins to Buy?
If you’re a North American investor, you should look for Canadian Maple Leaf coins and American Eagle coins in gold and silver. Austrian Philharmonics and Eagles are best for European investors.
The South African Krugerrand coin happens to be one of the most popular gold coins traded by investors all over the globe.
4. Where Should You Buy Precious Metals?
Today, the best way to buy precious metals is through a trusted online dealer that has a buy-and-store program.
It’s best to avoid physically possessing gold and silver coins unless there is an emergency. It’s best to store bullion bars and coins in secure vaults.
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