Precious Metal Investment

Regardless of where you are on the planet, the chances of you being able to buy physical bullion is most likely available to you.

What you should know however is that is investing in gold or the bullion market right for you? Depending on where you are, you have to take into consideration things such as tax charges, regulations and buy back policies and thus comparing the advantages of different locations at which gold buyers can purchase gold, including those offshore, becomes a rudimentary task towards investing in the precious metal. The second part or stage two in buying gold as an investment is in knowing when, where and to whom you will ultimately sell it to.

Precious Metal Investment

Selling to individual owners is a good thing, however the risks are high, and on the other hand selling it back to the seller would be a more viable option as it reduces the steps in the selling process quite significantly. This is why most gold bullion buyers prefer to invest with suppliers that have transparent and the stability to buying back bullion at reasonable rates that does not short change investors extravagantly. Suppliers that are reputable are essential towards buying and selling gold bullion. As most reputable precious metal merchants offer transparent selling process that is simplified and more often than not advantageous to the investor.

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However, a word of caution here about ‘all-in-one’ pricing or ‘packages’ that obscure market values and are not very clear about the buyback rates. The standard deal offered by most precious metal dealers especially with regards to gold bullion bars, the buyback discount from the market price will only be only 2% or 3%, provided you purchased it from them and you did not pay a premium on the gold which was too high. The premium is almost always higher for smaller bars than higher bars, for instance a 1 gram gold bar would cost 100 USD, whilst the same brand, but a 5 gram gold bar might only cost you 470 USD, saving you 30.00 USD from the premium which becomes significant when you decide to sell them for a profit when gold prices become favourable.

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However, if you try to sell gold bars that were purchased from elsewhere, the buyback discount is normally much higher and at times an additional penalty of 4 % may be imposed on top of the 2 or 3 % discount that they add when they buy back gold from investors. This is due to the cost that they will incur for re-assaying the bars and restore their value or status to the good delivery category. It must be mentioned here that gold’s baseline, critical quality is its role as an asset that does not become another party’s liability, which is part of the reason as to why gold differs from the majority of capital assets that rely on another’s ability to pay for incurred liabilities.

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Regardless of what happens to an economy or its currency or even the stock and bond markets, those who own physical gold will discover that the shiny yellow metal is something that they can depend on when the economy looks frail as gold is bedrock that will protect their wealth.

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