How & Where To Buy & Sell Precious Metals

Years ago if one was wanting to buy gold or silver there were few places to buy. Unless you knew a gold miner and just wanted raw gold or nuggets, you most likely bought gold from the bank or a coin dealer. That gold came in the form of a gold coin. And in most cases a 1 oz. coin. Like the Maple Leaf, the Krugerrand or the Golden Eagle. If you were buying silver you would buy the Silver Dollar or maybe an 1 oz. ingot.

Today you can still go to the bank and buy the coin, pay all the fees and exchange rates if you wish, or you can buy online.

Some coin shops deal with just minted coins but there are those that handle other products as well. Some dealers sell gold bullion bars in various weights from 1 ounce to 100 ounces or larger. Study the differences between bullion gold coins, which are valued according to the market price for an ounce of gold, versus coins that have a collector's value.

Another place to find gold and silver in coins and even small ingots is in pawn shops. And you can always go and see what is happening on places like ebay. With metal prices on the rise, a lot of sellers have been cleaning out the closets and a lot of bidders have been showing up for items like these. A great place on the net to check out for coin prices vs. metal content is coinflation.

Places like Kitco, Gold Money and Bullion Vault allow you to buy gold and have it stored away. Kitco has a gold pool that allows one to buy gold by the gram. Each gram you buy is recorded and added into a pool. Having gold in this pool allows you to buy and sell as you wish. Bullion Vault allows you to buy gold by the gram and uses Brinks vaults to store your gold. With them your gold never leaves the vault. Safe. Secure.

Exchange traded funds (ETF'S). When buying physical gold there are always concerns about authenticity and purity, as well as storage, transfer fees and insurance costs. But one can still own gold by investing in exchange traded funds. This option makes buying and selling gold bullion as easy as buying and selling stocks.
The share price of streetTRACKS Gold Shares (GLD) roughly tracks the price of gold and represents an investment in gold bullion. You in turn own gold without the hassle of storing and insuring. "With GLD, each share is priced at about 1/10th the price of gold bullion. If gold goes to $700 an ounce, then the price of a share should be about $70.00. And of course there are fees associated with exchange traded funds, but they're usually low.

Mutual funds are more for the do-it-yourself investors that feel the safest way to play the stock market is to buy mutual funds. That advice probably holds up well when looking for a foothold in gold, too. They're not always pure plays on gold, but that helps lessen volatility. There are several out there that give you a little more investing in other areas, rather than just precious metals."

There are scores of mutual funds that seek to give investors a stake in gold. The Prudent Global Income (PSAFX) and Vanguard Precious Metals and Mining (VGPMX) are just 2 that come to mind. Be aware that some funds might be more volatile than others and that expense and transaction fees can vary widely. Some funds may also charge a fee if you cash out before a certain holding period, usually six months to a year. Personally speaking I do not like mutual funds as they are way to broad and not targetted on any particluar play. Also with the high cost of management fees and with the present credit crisis issues you can end up on the shorter end of the deal. Mutual funds don't cut their fees if the fund tanks. They still get paid. Win loose or draw.

Jewelry is another way to buy gold. A lot of eastern and Arab world countries buy gold in the form of jewelry. In North America it is wise to remember to buy gold jewelry because you like it, not as an investment. You pay a premium for jewelry. If you buy 14 karat gold, it's less pure than investment grade. When you sell you'll need to consider the purity of the gold and, more than likely, it will have to be refined to bring it up to investment grade.