Among the many ways by which you can invest in gold such as ETFs, stocks and physical gold, it is wise to purchase physical gold in the form of coins and bars.
If you are interested to know how to invest in gold bullion, the following paragraphs are just for you.
Coins or bars?
Gold bullion can mainly be bought in either bar or coin form. Coins allow you more flexibility during trading as compared to bars since you have a larger breakup of your investment. On the other hand if you intend to buy a lot of gold then bars make more sense.
Investing in gold coins
You will find all sorts of coins in the market ranging from American Eagle to Chinese Panda. You can also get rare and antique coins that are more expensive than others. Such rare coins are called numismatic coins and have a collectible value too.
However, for an investor, it is best to avoid such antiques and focus mainly on the ones that offer the least premium over spot price.
Krugerrand, the first gold coin was produced in South Africa and its denomination was one ounce. This coin trades the least over spot price and is hence a good buy. Few other good investment options are the Britannia and the Sovereign.
How to buy
Before investing in gold bullion, it is imperative that you consider costs and research potential gold dealers before making a purchase. The price of your bullion will depend on where you buy it from, current demand and supply scenarios and the type and quantity of the bullion. The major benefit of buying gold bullion is that it guards you against a financial breakdown.
Gold can best be described as an insurance that will come to your rescue if the stock market takes a big dip and you need liquid assets. It rides on the sentiments of the public and keeps itself insulated from market curves. Thus bailing the owner out of tough financial times.