7 Things to Know Before Buying Precious Metals

A Beginners Guide to Gold (and Silver)

The dramatic increase in the price of Gold and Silver in the last few days has increased investment interest in the precious metals. TheFMN.com has been supporting such purchases for a long time. But for new readers, it is important to be aware of many things before making the decision to purchase:

1.     When buying physical gold and silver, get coins or bars. They are the most liquid (easily sold) way to hold the metals. Jewelry and gold nuggets/flakes are not easily valued and difficult to trade.

2.     Avoid Collector’s Coins (Numismatic). These are coins sold at much higher prices because of collector value. If you are buying gold for financial and savings purposes, look for the simplest, non-collector versions of the metals. The premium paid for numismatics will only be worth it if you can find a willing buyer at that price, which can be difficult.

3.     Don’t Buy Gold Plated Coins. These coins look nice and shiny and are much cheaper. However, they have minuscule precious metal content. Also, buyers should be aware not to mistake gold plated coins for real one ounce coins.

4.     Know the spot price before you buy. Just today, in one of the major financial papers, there is an advertisement selling silver coins currently valued in the low $40 per ounce range, for $120! Those buyers will not make a dime even when silver triples.  The price you pay for the coin should not be that much off the spot price.

5.     Don’t be a trader. Whether you work for a commodities firm and live, eat, and breath the metals, or you are a regular Joe: avoid trading you stash of gold and silver. Accumulate them and ride the bull market.

6.     Keep most of it physically, in your personal possession. Paper gold and silver (miners, ETFS & certificates) can have high returns, but you don’t really own anything until you have the metals in your hands and under your own watchful eye.

7.     Finally, be patient. We have been buying physical gold and silver for years and continue to accumulate. Though the end of the bull market is getting closer, do not be panicked into selling too early.

To You Success – John Masters

Editor, theFinancialMarketNews.com

3 comments to 7 Things to Know Before Buying Precious Metals

  • twisted titan

    Dollar cost averaging is the key to sucess.

    When its up buy less
    When its on par buy the same
    When its on sale get more.

    You cant loose.

  • horxy

    I agree with most except No. 7. The bull market hasn’t even got near to starting.

  • obamanke

    I believe you should not store it in a safe deposit box.Did you ever wonder why you can claim a deposit box as a tax deduction?

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