The Cheapest Way to Buy Gold: 2021 Tips

Investors choose to invest in gold for many reasons. Some are seeking an inflation hedge as supply disruptions and demand increases push gold prices higher at the start of the 2020s. Others fear that the pandemic will worsen or that some other calamity will send the currency exchanges and stock markets into chaos.

Gold and other precious metals have long been a refuge for investors in uncertain times. However, the decision to buy gold raises several other questions.

  • Where do I buy gold?
  • How do I know I’m getting a good deal?
  • What is the cheapest way to buy gold?
  • How do I protect the gold I buy?
  • How can I maximize the return on my gold investment?
  • Should I invest in physical gold bullion, coins, jewelry, gold mining stocks, or gold ETFs?

From one investing standpoint, the best part about obtaining an investment in gold is never needing to use it. To explain further, if you are investing in gold as a hedge or refuge, and if gold prices plateau or decline, it may signify that the economy is doing well and that the rest of your investments should be showing a profit.

Other investors are seeking gains in every part of their portfolio in bull and bear markets. There are two components to maximizing returns for any asset. The first is buying the asset at the lowest possible price. The second is reducing the ownership costs so that any value increase translates into tangible gains.

Let’s consider each of these factors in turn.

Ways to Purchase Gold Cheaply

Gold is traded worldwide and has an agreed-upon value. Consequently, there are two ways to reduce costs when buying gold. The first is to buy from a trader who knows the value of gold. The second is to buy from someone, such as a private seller, who might or might not understand the value of what they are selling.

Buying from Bullion Traders

Bullion traders are highly knowledgeable about gold transport, storage, and prices. Their expertise can keep the overhead low, and they are better able to capitalize on dips in the spot price for gold in order to acquire gold at an advantageous price. They could then sell at a relatively low rate and still make a profit.

Buy in Bulk

Buying in bulk from a bullion trader is one of the cheapest ways to acquire gold from a knowledgeable seller. A bullion trader would be more likely to shave off a bit of their profit margin in order to make a large sale. Some gold transport and storage costs are fixed, so buying a large quantity of gold means that these costs contribute to a lower price per ounce.

While a professional trader in gold and other precious metals is most likely to be in the position to arrange a bulk sale, other sellers could provide gold in quantity as well.

Buying from Banks

a bank that accepts gold

Not all banks buy or sell gold, but some banks are authorized to do so. In general, you will be responsible transporting and storing the gold you buy from a bank. Therefore, you will take on the responsibility for anything that might happen to the gold after you take possession of it.

Commercial banks, like bullion sellers, will be able to authenticate the purity of the gold that they sell.

Buying from Jewelers

Jewelers are an excellent source of gold, but they are not as likely to have large quantities of gold bars and coins available for sale. However, they should have the expertise to evaluate the purity and value of gold. Additionally, some pieces of gold jewelry have value as collectibles and art pieces above the value of the gold they contain.

Buying jewelry in bulk might be more complex because you cannot simply calculate the value of jewelry based on weight. Each piece must be appraised individually. Buying jewelry at auction could be a way to purchase many pieces simultaneously, but it is possible to overpay for jewelry if you are not knowledgeable.

Keep in mind that the value of jewelry often comes from its artistic and aesthetic appeal and its provenance. Therefore, jewelry might be affected by factors that might not affect the value of physical gold bullion. For example, minor scratches, a decline in artist popularity, or changes in fashion could alter the value of your investment.

Can I Buy Gold from the U.S. Mint?

Individuals cannot buy gold directly from the United States Mint. The U.S. Mint sells gold directly only to “authorized purchasers.” Such purchasers are large firms with an established history of trading gold and precious metals. These groups must go through an audit and a lengthy application process before they are permitted to legally sell gold.

Buy at Estate Sales

Estate sales often offer a variety of items, including jewelry and, on occasion, gold coins or other precious metals. The heirs of a recently deceased person might not be knowledgeable about precious metals and might be primarily interested in decluttering. However, in most cases, families with the wherewithal to organize an estate sale are also able to appraise any coins, gold, and jewelry they find.

Storage lockers sometimes come up for auction due to non-payment, and these occasionally contain valuables. However, renters are likely to clear out valuables from a storage locker before abandoning it, and if the renter dies, their heirs often search through the locker for valuables. So, buying storage lockers in the hope of finding gold is generally a losing proposition.

Buy from Private Sellers

People sometimes sell gold or other precious metals online or in person. Some of them might offer a price that seems too good to be true. Such a fantastic deal can be a risky venture since it may be difficult to detect if the gold is counterfeit, stolen, or otherwise falsely advertised.

Ways to Reduce the Risks of Buying Gold

If you decide to purchase gold, you must take steps to avoid losing money on the investment through fraud, theft, loss, or damage.

Verify Gold Purchases

Verify the purity and the provenance of the metal before giving the seller any money. Be sure that the metal will not turn out to be some far less valuable alloy or authorities will not seize it because it was stolen or used in money laundering.

Assess the Reputation of Companies You Deal With

Do some investigative work before buying gold from a bullion dealer, bank, or coin dealer. How long has the business been operating? Are there complaints against them from customers or any history of action taken against them by authorities for their trade in precious metals? Avoid any institution with a shady past or one that is reluctant to disclose its business practices.

Arrange a Secure Place to Keep Gold

Once you take possession of physical gold, you will need a place to store it. An adequate storage area could be a wall or floor safe in your home or space in an offsite storage facility designed to hold precious metals. Some investment firms, including the Oxford Gold Group, provide space in a secure storage facility for your gold, saving you the risk and cost of storing the gold yourself.

Reduce Tax Obligations by Investing in a Gold IRA

One of the expenses associated with gold and other investments is capital gains tax on their increase in value. Gold and other precious metals are taxed at a 28% rate, higher than the rate assessed for stocks and real estate because the U.S. government views them as collectibles for tax purposes.

You can counteract some of these costs by buying gold with pre-tax dollars in a gold or silver IRA. Depending on your income bracket, the tax savings may be as great or greater than the capital gains taxes at withdrawal.

Note, however, that there are limitations on IRA accounts. For instance, there is a penalty on most withdrawals made before you reach age 59½. There are also limitations on where you can store your gold while it is in an IRA account. Consider these aspects carefully before you open a precious metal IRA. To find out more, read these publications on investing in Gold IRAs and Silver IRAs.

Balancing Security, Knowledge, and Trust

a balancing scale in a table

Searching for the absolute cheapest way to buy gold can leave investors vulnerable to scams and criminal activity. Working with a knowledgeable and reputable investment partner might cost a bit more, but it offers the security of a sound business relationship. For gold transport, storage, and investment guidance, you can trust the Oxford Gold Group.

Invest in Gold with the Oxford Gold Group

At the Oxford Gold Group, we are committed to providing secure investment vehicles in precious metals so that you and your family are secure in their retirement. Don’t let fears about the future prevent you from enjoying your life. Call 833-600-GOLD to speak with an investment consultant today.

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