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Quite
a few articles have been written about the importance of owning Gold and
other precious metals as a means of maintaining one’s wealth in the
face of rampant money printing by the world’s Central Banks.
Today
I’m going to share some ideas on how to actually buy bullion.
As
far as precious metals go, you need
to:
- Own actual Bullion
- Store it yourself (not in a bank)
I
do not recommend owning a paper gold-based ETF because frankly the custodial
risk is high (that is, there’s no telling if the Gold is even there or who would get it if the
ETF is liquidated).
In
comparison, physical bullion, stored
outside a bank, is literally money in hand. You know where it
is and you can find out what it’s worth. Compare that to a Gold ETF in
which you’re hoping
that the bank actually has
the Gold and that it could actually
send it to you if you requested (fat chance).
In
terms of actual gold coins, there are three coins that comprise the bulk of
the bullion market. They are Kruggerands, Canadian
Maple Leafs, and American Gold Eagles. I’ve been told to avoid Maple
Leafs by both a trader and a bullion dealer as they can easily be scratched
which damages the gold and reduces the coin’s value.
In
terms of silver, the easiest way to get it is via pre-1965 coins (often
termed “junk” silver). You can also get silver one-ounce rounds
(coin-like medallions) and 10-ounce bars. Or you can buy Silver Eagles coins.
I
cannot tell you which dealer to go with, but look for someone who’s
been dealing for years (not a newbie). You should always ask for
references from the dealer (former clients you can talk to about their
purchases/ experiences).
Some
warning signs to avoid are dealers who try to store your bullion.
Never, I repeat, never store your bullion with someone
else. Always store it yourself. Also, be sure to talk to the dealer
for some time and ask him or her numerous questions about the industry, the
coins, etc. (feel free to test him or her on the information I’ve
provided you with e.g. the three most liquid Gold coins, etc.). If they can
answer everything you ask in a knowledgeable fashion, their references check
out, and you verify everything they say with a 3rd party, you
should be OK.
Best
Regards,
Graham Summers
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