How to Buy Gold and Silver
Making any type of investment is nerve-wracking the first time you do it. Buying gold and silver is no exception in this regard, and we understand that you may be nervous.
A lot of that nervousness stems from uncertainty and fear of the unknown. If that’s how you’re feeling, you’re in the right place. The guide below will walk you step-by-step through the process of making your first silver or gold purchase.
Step 1: Decide which metal you want to buy
The first step is the most obvious. You have to decide whether you want to buy gold, silver, or both. You can also look to buy platinum, palladium, or copper, too. There’s no wrong answer here.
One reason you may lean towards gold is its timeless prestige as the precious metal. Everyone knows about gold, everyone has heard about gold, and everyone understands the value of possessing it.
However, this prestige comes at a cost – literally. Gold is far more expensive on a per-ounce basis than silver. So, even though gold is always appealing, it may not fit your budget. In fact, even if it’s in your budget, you may not want to spend so much during your first purchase.
Silver, on the other hand, is a very close second to gold in terms of its desirability. So, there’s no shame in making silver the primary thrust of your investing, but bear in mind that you’ll have a bigger storage question to answer if you do. Quite simply, the tonnage of your investment may come with a challenge concerning security and safety.
At the end of the day, there’s nothing wrong with either choice or – the third option – making your purchase a mixture of the two. In fact, it is likely wise to do so in order to protect against shortages or gluts in the market for one.
Step 2: Know the amount you’re going to buy
Because so much information is available these days, you should have a pretty good idea about the amount of gold or silver you’re going to buy for the first time. The amount can either be in terms of weight, individual objects, or a set amount, but you should have it in mind beforehand.
At this point, you’re likely familiar with the fact that gold and silver bear a constantly changing value known as a spot price. This price is the value that sellers are willing to part with their metal at any given moment.
However, you may discover different pricing tiers available based on how much weight you plan to buy. You should not go out of your way to buy in bulk, but if you already have a certain quantity in mind and a price tier is not much more to reach, then it may make sense.
You may also find that different types of products have different pricing structures, too. In general, coins are going to be the most expensive products to buy because they are more liquid than bars or rounds.
Coins are also certified by sovereign nations for their weight and purity, which renders them the safest buy of the three. However, with that certification comes production costs, as coins must be made to more exact standards than bars or rounds in terms of the precision of their designs.
Finally, you may find that your payment method may bear some discounts of its own. In general, the sooner that the dealer gets its fiat currency in hand, the better deal it may be willing to offer. So, if you’re paying in cash at a local store, you may be able to work a bit of a deal.
You can find similar deals on payment methods online, too. Silver.com has several different prices based on your chosen payment method. For more information, consult the Silver.com payments page.
Step 3: Decide between online and retail
The next decision to make is how you want to buy your gold and silver. The time-honored method is to visit a local coin shop and buy from its selection.
However, buying online has become a potent and viable method for all kinds of purchases, including those of gold and silver. The decision truly boils down to what matters most to you.
Pros and cons
Online dealers cannot be beaten in terms of selection, price, and convenience.
Unbound by the limitations of a physical sales floor, an online dealer can offer a much wider variety of gold and silver pieces than all but the largest retail stores. If there’s a specific coin or piece that you have in mind, you’re going to have a much easier time finding it online.
Online dealers also don’t have to cover the overhead of running a location, so they often have more competitive prices. Before you buy in person, you should make sure to consult with Silver.com to look for a better deal on the same order.
Best of all, online dealers are available around the clock and without setting foot outside your home. Precious metals aren’t always something you decide to get during business hours, and weather and traffic conditions can make it a difficult journey to boot.
However, retail shops may exceed online dealers in two areas: personalized customer experience and expediency. Although our Silver.com staff is friendly and helpful to any customers, there is no substitute for having “a guy” on whom you depend for your buys and sales for a decade or two.
The other nice thing about a retail store is that you can walk in and out with your new gold in a matter of minutes. Online dealers have streamlined processes, to be sure, but we haven’t reached the point where we can slap the gold into your hand in less than five minutes.
Step 4: Shop for a dealer
No matter which avenue you choose, it is critical that you don’t buy from the first dealer you find. As much as you may know your potential cost based upon the spot price, the reality is that you are unlikely ever to pay this amount for gold or silver, regardless of where you go. As a means of compensation for facilitating the purchase, dealers add a surcharge on top of the spot price – a fee known as a premium.
Every dealer has a different premium. So, be sure to shop around to find a dealer (or two) that seems to have some of the lowest premiums. Avoid any dealer that can’t seem to stick (relatively) close to spot. On the other hand, be wary of any offers that are at spot or quite close, as they may signal a disreputable dealer or the presence of hidden fees elsewhere.
Above all else, be sure to check the reputation and trustworthiness of any dealer that you choose for your purchase. Look for both word-of-mouth and independent reviews of dealers. It is paramount that you find a reputable dealer for your transaction.
