Balance Gold Prices with Your Goals

Start making money in the gold market

One of the most difficult challenges you’ll face as a new investor is deciding on the type of bullion you want to own. Some investors decide they don’t care whether they own bars or coins, as long as premiums are low and gold prices indicate it’s time to buy. However, this isn’t the case for everyone.

You may for example prefer to own American Eagle coins instead of bars, even though you will pay a higher premium. This is one of the nicest things about investing in precious metals today: you have choices and you can own whatever type of gold you wish.

It’s a fact that when it comes to investing in precious metals, you cannot regain the dollars you spend on premiums. The spot price of your precious metals may go up such that you earn a profit over time, but that is not the same thing as regaining premiums. Consider, too, that when it is time to sell your gold bullion, you will lose dollars again when you receive slightly less than current spot gold prices.

Accepting these facts about premiums should make you think carefully, yet it shouldn’t sway you from buying the exact bullion bars or coins you want to own. Rather, it should motivate you to look for the best possible value on premiums. You can shop around and balance important factors such as customer service and selection with premiums to find the best possible value when you buy gold.

When it comes to precious metals, an ounce is an ounce, and from an investor’s standpoint it makes sense to pay as little as possible to own gold. Yet there’s more to purchasing decisions than considering only the premiums you’ll pay above gold prices.

As an example, coins such as American Eagles are popular and easily recognizable, which means they are easy to sell. If the coins you buy are in very good condition, you’ll obtain the best possible price when you do sell.

By contrast, you’re likely to receive a lower price when you sell if you own ugly, scratched up and dented coins or bars. You will have paid slightly more for the better coins in terms of premiums, but you will also receive slightly more when it’s time to sell. The point is to understand why you’re paying slightly more at the time of purchase and balance this with your goals for purchasing.