A Complete Guide to Buying Gold in 2020
Gold. Just the sound of it alludes to riches. Gold has been a precious commodity since time immemorial. In fact, gravesites dated back as far as 4500 B.C.E.1 have been reopened only to find a person buried with his gold, revealing just how precious gold was to many men throughout history. This goes to show how gold, unlike many other commodities, has passed the test of time. Even today, its economic attractiveness and stability remain unprecedented.
It comes as no surprise therefore that you’re here, looking to invest in a worthy investment such as this. This article will give a complete guide to buying gold, to make sure that you secure the best form of investment in your purchase.
First things first, why invest in Gold?
As stated, gold is a precious commodity that has remained precious through centuries. Investing in gold is not like buying shares or dealing in volatile stock deals. As the price of bonds and stocks changes with the economic environment, gold has continued to retain its value even in times of inflation. It is, therefore, better than currency-based investments, which drop in value as currency value shifts.
Where can an investor purchase gold?
Gold is purchased in the physical form of gold coins or gold bullions, which are the popular gold bars seen in movies. They normally have a stamp that shows the amount of gold contained in the bullion as well as its purity levels. Gold is also sold on paper, through gold exchange-traded funds (ETFs). Each unit of the ETF equals a gram of gold.
Either form of gold can be bought online or physically from brokerage firms, dealers, and gold-focused exchange-traded funds (ETFs) for paper gold. The U.S Mint and some banks also sell gold coins and bullions. Another authentic place to purchase gold is from gold mining companies. Whichever source you choose to go with review its credibility.
Golden tips to consider when buying gold in 2020:
1. The safest way to buy gold is in physical form.
Many people are seeking to back their wealth using gold which a stable commodity, since world currencies are not backed by government-held gold. As such, many online dealers in the exchange market are appealing to their customers by claiming to back up their proper money with gold. The peer market for gold has therefor grown immensely as people seek to buy money that has gold backing it, to safeguard their future investment.
While this might be a smart move, consider a scenario where every single investor who bought the paper money backed by gold decided to claim their share of the gold. Would there be enough gold for everyone in the system? The smile answer is no. When choosing to buy gold as wealth insurance, make sure you buy it physically.
2. Make sure the Gold is under your direct ownership.
Buy small gold coins directly, and keep them in your vicinity, other than get into deals for more gold that will not be yours to control. With more money, you could move into jurisdictions like Liechtenstein and Switzerland, where they have strong private property rights and select an appropriate gold storage company that keeps the gold directly under your name, and the government recognizes the importance of property rights especially with regards to precious metals.
When the gold is under your name, the company is not allowed to lease, pledge, or hedge it, which is crucial. A safe jurisdiction to store the larger part of your wealth in gold will be a shrewd move, but be sure to also keep a few coins with you. Finally, when choosing a storage company, do not choose financial institutions. They are subject to the system so, in the event of a crisis, your gold may be affected.
3. Don’t get into debt for Gold.
Gold is bought as collateral against a fragile economy. Going into debt for it is simply appraising the habits of the economy you’re trying to secure against. Therefore, before investing, save up then purchase the gold, put it aside, and get along as you wait for your gold to accumulate in value. You should never make your life miserable just to own a few bars of gold.
4. Build up your stock.
As with any investment, the more, the higher the value in the future. A person who bought gold worth $340 in 2004, would have an amount worth $1300 today. It is a means of building up your savings, rather than a means of survival. Do not buy a few ounces today to sell one year later. Keep buying and setting aside, and a few decades later you’ll be richer than you could’ve imagined. Can you imagine that in 1970, $100,000 in physical gold would be worth $2,000,000 today?
5. Abide by existing laws.
Some laws require purchase and ownership of large amounts of gold to be registered. Depending on your jurisdiction, establish the existing laws and make sure you abide by them to avoid complications later which could be as extreme as confiscation of the gold.
With these, you are now ready to make the best choices as you buy your gold!