Having decided that I did want to get into precious metals investing, I had to figure out how and where to buy gold and silver. It’s the most basic question, right?

Here’s what I came up with…

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1. Local Coin Dealers

Local Coin Dealer

Numismatics is the act of collecting of coins, paper money, and medals. One part if that hobby is collecting gold and silver coins; another might be collecting Roman coins, pre-war coins, war medals, etc. Local coin dealers service that need. So they’re always a good port of call if you’re looking to buy or sell coins.

Gold coins are going to be more rare as they don’t go into general circulation. Silver coins have gone into circulation in the past though so it’s a bit easier to find such coins. Prior to 1965 in the USA, most silver colored coins actually had a high percentage of silver in them. Today, they’re worth considerably more than their face value.

Pros:

  • Prices are generally better than if you buy online. A coin dealer should charge only a couple of percent over the spot price. If you’re charged a higher premium (as it’s called), then simply take your business elsewhere.
  • If you regularly go to a coin dealer, you can strike up a relationship with them and they might give you better buy and sell prices as a result or show you stuff the general public doesn’t get to see.
  • There are no shipping or insurance charges to worry about when buying over the counter. Depending on where you are in the world, that could lead to a significant saving.
  • In European countries, there’s VAT (Value Add Tax – a sales tax) on silver. If you buy from a local dealer, the VAT is already included in the buy and sell prices. If you import from abroad, you’ll have to pay your country’s VAT when you get your silver. That tax can be as high as 23%.

Cons:

  • A coin dealer likely has limited supply of gold and silver coins. Bars are probably even harder to come by.
  • If you’re into coin collecting, and you’re looking for a particular coin, it’s much more difficult to find what you’re looking for at a local dealer.

2. Local Bullion Dealers

Local Bullion Dealers

The next option to look at are local Bullion Dealers. These deal exclusively in gold and silver bullion (coins and bars) and may offer other precious metals, such as palladium, as well.

Pros:

  • You can place orders over the phone (local phone rates) or face-to-face.
  • There is unlikely to be a shortage of any given product. Rarer coins (or coins from a specific series like the Chinese Silver Panda or Perth Mint Lunar series) might command a higher price but still be available, whereas a local coin dealer might not carry such coins.
  • Bullion dealers can store your bullion in secure vaults at various locations around the world. That’s obviously a lot more secure than keeping your horde at home.
  • Should your government ever introduce gold confiscation legislation (as happened in the USA in the 1930s), your bullion is protected if it’s stored in another country.
  • Bullion dealers buy from reputable sources such as government mints and other minting companies (e.g. Perth Mint), so you can be sure of the provenance and quality of the metal you buy.

Cons:

  • Not all bullion dealers offer an over-the-counter service. The precious metals you buy are housed in a vault somewhere in Zurich, New York, Toronto, London or Singapore.
  • If you store your bullion in a vault, you will be charged storage fees. These vary with each vault. Some charge a flat 1% per annum fee, regardless of how much or little you have stored with them. Others charge a lower annual fee (e.g. 0.12%) but require a minimum daily or monthly storage fee. Unless you have $10,000-$20,000 worth of bullion stored with them, the fees will eat into your holding.
  • You can request delivery but then you’ll have to pay insurance and shipping fees. And, if you’re in the EU, any silver you bring in from outside that zone will also have VAT charged on top. On the other hand, if you leave your bullion in storage, you’ll end up paying an annual storage fee.
  • Depending on where you live, the number of dealers you have easy access to may be limited.
  • There may be a minimum order requirement, especially where silver is concerned. If you’re buying silver coins, you may have to buy a roll, which contains 20 or 25 coins.

3. Buying Online

Buy Gold Online

The last option is to buy gold online (and other precious metals). There’s a much greater number of bullion dealers online and you can compare prices from various suppliers, so you get the best deal. There are several ways to buy online:

eBay

You might be surprised to learn this but a lot of gold and silver coins and bars are sold on eBay. But you need to be careful here.

Pros:

  • Many items are sold at auction so there’s always a chance of picking up some bullion cheaply.
  • Prices may be cheaper than when buying locally but make sure you factor in all extra charges before you bid or buy.
  • It’s a good option if you have no local dealers to buy from.

Cons:

  • While some companies and dealers do sell through eBay, many people selling there are private individuals. So the chance of being scammed is much higher.
  • Before you buy, check the shipping charges. These are frequently higher than you might expect, and sellers often cover their listing expenses by charging higher shipping fees.
  • If you’re in the EU, you will have to pay VAT on any silver bullion you buy from outside that zone, so that’s another factor you need to think about when evaluating prices. If you’re buying from someone in the EU, then no additional VAT will be payable.

Amazon

Amazon USA Logo

Again, this is probably not a place you’d think sells gold and silver bullion. These items are listed on Amazon by various dealers and not sold by Amazon itself. The same caveats as for buying on eBay apply.

Also, if you’re buying from outside the USA (but buying from amazon.com), many dealers will not ship internationally.

Always take time to read the customer reviews before you decide to buy or not. There’s almost always someone who’s had a bad experience with a merchant on Amazon ((whatever they’re selling) so you need to do your due diligence and weigh up the good vs bad opinions.

Pros:

  • It’s Amazon, so there’s a lot of buyer protection should something go wrong.
  • You can buy bullion with your credit/debit card.
  • There’s a good selection of bullion items – coins and bars – on offer from a variety of suppliers.

Cons:

  • Same as eBay. You could be buying from private individuals and not know the provenance or quality of the item beforehand. Check the shipping charges, whether insurance is included and, if not, how much extra that will cost.
  • Prices may be higher than when buying from dedicated bullion dealers. Items on Amazon are aimed at people who don’t know a lot about buying gold and silver.

Online Bullion Dealers

Buying Gold And Silver Online

This is where most people who invest in gold and silver buy their bullion. There’s a wide range of merchants to choose from and, since they’re competing online, they often run deals and charge slightly lower prices for precious metals.

Pros:

  • It’s easy to order online and you can do it from anywhere you have a computer and at any time of the day or night.
  • Best prices. The deals and lower prices are attractive for buyers. If you’re in the USA, shipping and insurance are generally free. A nice bonus.
  • There’s a wide selection of bullion on offer – coins, rounds, bars and other items of interest.
  • Dealers buy from government and other recognized mints so you can be sure of the provenance of anything you buy.
  • There’s no minimum order (unlike local Bullion Dealers who may require you buy a tube – 20 or 25 – silver coins in one go).
  • Payment methods (depending on the dealer) include wire transfer, credit/debit card, PayPal and Bitcoin. Some other payment options may also be available.

Cons:

  • If you’re  outside the USA, many dealers will not deliver internationally. You’ll need to check the shipping policy of any dealer you’re thinking of buying from.
  • If a dealer does ship internationally, check the shipping and insurance charges. These can add a substantial amount to your bill of you’re not careful. You may be able to get free shipping if you spend at least a certain amount of money.
  • Again, if a dealer does ship internationally, they may require you to place an order by phone rather than directly online and you’ll incur international phone charges to place your order.
  • Where you have to pay shipping and/or insurance fees, placing small orders is not economical. The more you buy, the less of a hit the fees are.

BitGold

BitGold Logo

This is the new kid on the block. They only sell gold. However, there’s no minimum order. You can buy fractions of a gram if you want. With BitGold you’re buying gold directly, as a raw resource, not in coin or bar format. This makes it the easiest option for buying  gold.

Pros:

  • You can order online, so placing an order is extremely easy.
  • You can buy gold for within 1% of the Spot Price.
  • Payment options are credit/debit card, wire transfer, SEPA, Bitcoin, China UnionPay and Interac.
  • You get free vault storage, so no extra fees to worry about.
  • There’s 100% insurance coverage on your physical gold value through the London market by The Brinks Company.
  • Any gold you buy is fully reserved, allocated, and redeemable.
  • They offer a prepaid card, backed by Mastercard, that you can load up from your account.
  • You can redeem your physical gold value back to your bank account or your prepaid Mastercard at within 1% of official gold price.
  • If you sell anything, you can take payments via credit card or China UnionPay directly into your BitGold account.
  • They offer 2-factor authentication to secure accounts.

Cons:

  • There’s a 2% fee to process credit/debit card transactions.
  • You don’t have the gold in your hand, but that’s the same situation as you have with any dealer where you have them store your precious metals.
  • They’re a new company (founded in 2014) so they don’t have a long-term, established record yet.

Conclusion

A Small Precious Metals Investment

For the small investor, buying online is probably the best option, certainly so if you have no local bullion dealers or they require you to place a minimum order.

If you like having easy access to your precious metals, then buying coins and bars and having them shipped to you is the way to go. With gold, the smallest amount you can buy is a 1/20th oz coin which at today’s rate (April, 2016) costs about $80. The premium on these coins is high though when compared to buying a 1 oz coin.

Silver is a better option for the small investor given that coins cost about $17-$18.

BitGold is a very good option if you do want to invest in gold but can’t afford to buy coins outright. You can build up your holding over time and not have to worry about storage fees cutting into it. The prepaid card is a fantastic option too, allowing you to spend directly from your account should you need to.

When I was learning how and where to buy gold and silver, those were the options that I discovered. I don’t have any local coin dealers that sell gold or silver coins on a regular basis, so that option was out for me. There are three or four local bullion dealers I’ve looked at and one whom I bought tubes of silver from. I have bought items from online dealers too, especially when I wanted specific items in small quantities. And I’ve become a big fan of BitGold.

Where To Buy Silver And Gold Bullion Online

BitGold – they’ll add 5% to your initial order with this link
JM Bullion
SD Bullion
BullionVault
Gold Bullion and Silver Bullion on Amazon USA
Gold Bullion and Silver Bullion on Amazon UK
Gold Bullion and Silver Bullion on Ebay

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