You’ve decided to buy physical gold bullion and want to find the best price. In this guide, we will show you how to determine what type of gold makes the most sense. We will also provide insight into gold bullion pricing, with a focus on finding a reputable, low cost dealer. Buying gold is easier than gold forums and dealer websites make it seem. The goal for this guide is to provide enough information for you to make your first gold purchase, while getting the best price possible from online gold bullion dealers.
We will show you the most popular products at top dealers to narrow our focus, then discuss which type of gold is best for most buyers. Finally, we will explain how to calculate premiums over spot so that you can compare dealer prices. Ultimately, you should learn enough here to be able to make your first gold bullion purchase. Let’s start with a table that compares common gold coins and bars:
|Image||Gold Bullion||Physical Gold Product||Details||Best Price Found|
|1 Oz Coin||American Gold Eagles|| • 2016 or Backdated
• The Most Trusted Gold Coin
• Liquid, Widely Recognized
|1 Oz Bar||Provident Metals Gold Bars|| • Any Qty $18.95 Over Spot
• Brand New .9999 Fine Gold
• Certified Purity w/ Assay
• American Made Bars
|1 Oz Bar||Pamp Suisse Gold Bars|| • Brand New .9999 Fine Gold
• Certified Purity w/ Assay
• Sealed with Certicard
|1 Oz Coin||Canadian Gold Maple Leafs
Classic Gold Bullion Coin
| • Brilliant Uncirculated
• Lower Cost than Eagle
• Fine .9999 Pure Gold
• Micro-Engraved Security
|1 Oz Coin||American Gold Buffalos|| • Nice Alternative to Gold Eagle
• U.S. Mint’s .9999 Purity Coin
• More Pure Gold Coin
• Ships in Original Mint Sheet
|1 Oz Coin||S. African Gold Krugerand
| • Classic Gold Coin
• With 1 Oz Pure Gold
• Brilliant Uncirculated
• Widely Owned
How to Compare Gold Dealer Premiums
If you want to buy at the best price, you will need to do some comparison shopping. You want to know the premium over the current spot price of gold that you will pay for any given gold investment. The total price of your gold should be calculated on a per ounce basis. You will want to determine how much your gold will cost, per ounce, with all shipping and fees included and then determine how much more per ounce this happens to be than the current spot gold price.
The best gold dealers will fully disclose prices on their web site and you will not need to speak with a salesperson. Calculate how much the gold you are considering will cost on a per ounce basis by dividing your total cost by the number of ounces. Next, look up the current spot price of gold. The difference between spot price and the gold you wish to buy is your total premium over spot. This will be different than an advertised price because your shipping and fees may be different, as well as the gold price, due to a different sized total order. You can compare the premium for coins, rounds and bars, or compare premiums between dealers for identical products.
A U.S. Gold American Eagle will command a higher premium over spot than a generic, privately minted gold round (we will discuss gold products later in the article) because it is better known and provides a higher level of confidence and security for the buyer.
When you buy gold in bulk, you can expect to pay a lower premium over spot. Further, since gold dealers operate with thin margins, you will pay more when using a credit card because the dealer will incur transaction fees. This may be acceptable if you are in a hurry to take delivery, but generally, to minimize your premium,pay by wire transfer or personal check.
Some dealers may charge shipping while others won’t. Sometimes, shipping will be waived for purchases over a certain amount. Like buying anything online, this is where you need to pay attention because what looks like a good deal may not be. Free shipping isn’t free if you are overpaying for the gold itself!
To make things simple, calculate the total cost of your gold, shipping and credit card and handling fees, if any, and then divide the total by the total ounces of gold you will receive. Look up the spot price at the link above and the difference is your premium. Do this with each dealer and you have a simple method for comparing prices.
What is the Best Type of Gold to Buy, Coins or Bars?
If there is one tip we might share on buying gold, it would be “Keep it Simple!” Basic gold coins and bars will get you the most gold for your dollar. Whether one or the other is probably more a matter of personal preference. First-time gold investors should buy the gold product that will provide them with the most pure gold for their dollar, remain liquid and is still enjoyable to look at, accumulate and own. To achieve this, keep your premiums over spot low and buy products readily available and easily sold. That is, buy gold that is liquid. Leave the more complicated gold investments to hobbyists and professionals.
Buying gold as a hedge against inflation, for wealth preservation in the face of a falling dollar or for speculative investment purposes should be kept as simple as possible. The best gold for you is that with which you are most comfortable, provided that it remains liquid and can be easily sold at a later date when it comes time to cash in on your investment. With this in mind, the most popular physical gold products most-frequently bought by other investors should point you in the right direction.
We have done this work for you and have listed the physical gold bars and coins most frequently purchased by experienced physical gold buyers. This doesn’t mean you can’t look around and find other gold investments that you may like, but our belief is that these products make the most sense for a first-time gold buyer. Don’t get led astray from your task at hand, which is to acquire physical gold easily, quickly and confidently.
Gold coins are produced by the mints of sovereign nations. These are real coins issued by governments, so they tend to provide the highest level of liquidity and investor confidence. Gold coins, whether U.S. Eagles, Canadian Maple Leafs, Austrian Philharmonics or Chinese Pandas make an excellent first-time gold investment. These coins may cost a bit more, as they do often command a higher relative premium over spot prices than generic gold rounds. Nevertheless, coins should also retrieve a higher selling price when you go to sell them.
American Gold Eagles and Canadian Gold Maple Leafs
The most popular gold coins include American Gold Eagles and Canadian Gold Maple Leafs. Gold Maple Leafs are 99.9% pure gold. The American Gold Eagle contains 91.67% gold, 3% silver and 5.44% copper. The alloy makes the Gold Eagle a bit more “durable” and less subject to nicks and dents that may detract from the appeal of the coin at resale. In addition to the 1 oz size, the American Gold Eagle is issued in 1/2 oz, 1/4 oz, and 1/10 oz denominations, making them available for any physical gold buyer’s budget. Nobody can dispute the beauty of these coins.
American Gold Buffalo Coins
In 2006, the U.S. Mint’s came up with an answer to 99.9% pure gold coins issued by other nations with the 1 Ounce American Gold Buffalo coin. Like Canadian Maple Leafs and South African Krugerands, the Gold Buffalo coin is a true 24 karat gold coin, with 99.9% purity. Just like the Eagle, the Buffalo is legal tender with a face value of $50.00. Featuring an American Indian on the front and a buffalo on the back, these coins are a bit smaller than the Eagle, since they do not contain the additional metals to make it more durable.
Gold Bullion Bars
If you are looking to accumulate physical gold and want to reduce the premium you pay, Gold Bars are your best option. Well-known and trusted mints that produce gold bars include Englehard, Johnson Matthey, Credit Suisse and Pamp Suisse. You can also find bars from Sunshine Minting, Ohio Precious Metals (OPM) and Australia’s Perth Mint, among others. The purity of a gold bar should be .999 fine gold.
Sizes of Gold Bars
Like gold coins, bars can be found in multiple weights, ranging from from 1 Gram to 400 Ounces. The most common sized gold bars for retail investors are 1 Ounce, 10 Ounce and 1 Kilogram, while smaller sizes like 1, 2, 5, 10 and 20 gram bars are available.
Making an Initial Gold Investment
If it is your first time buying gold, we always suggest starting with a simple, small investment in one of the most popular gold coins or bars. Your choice should appeal to your personal taste and sense of value. At this stage, don’t worry too much about making the perfect investment at the perfect price or at the best possible time. For now, your objective should be to get the process started and to become comfortable buying gold so that you can more confidently proceed with acquiring in greater bulk. Further, with a smaller investment, as your first purchase, you can’t really make a big mistake, especially if you stick with the tried and true.