How to Buy Gold Online
Updated 26 February 2021
With interest rates at historic lows around the world, it’s no surprise that people are investing their hard-earned money in gold.
Historically, gold is a safe investment giving complete reassurance during tumultuous periods.
If you consider yourself a Ron Swanson and are looking to invest in gold, you must purchase your gold from a reputable investment company.
To help you understand more about buying gold online, we’re taking an in-depth look at why gold is such a good investment, as well as the advantages and disadvantages of buying gold bullion.
If you are intending on purchasing gold bullion by post, you should undertake due diligence on your chosen provider. And if you are buying gold as an investment, always speak to a financial advisor to get up-to-date advice.
Is Gold a Good Investment?
If you are new to investments or you simply want a ‘safe’ investment, then historically, gold has always been a good choice for your investment portfolio.
This is because the price of gold typically remains stable, regardless of any political strife or fluctuating markets.
For centuries, gold has retained its value, and its rarity means that prices will not fluctuate in the same way that property or pensions might.
What Are the Different Ways That You Can Invest in Gold?
There are many ways for investors to dip into gold.
We may all dream of diving into a pool of gold coins (à la Scrooge McDuck) but you may be surprised by the diversity that a gold investment portfolio can bring.
Let’s take a look at a few of the most common ways to invest in gold:
A gold bar (also known as gold bullion or a gold ingot) is the most traditional way to invest in gold.
Each bar typically weighs around 400 ounces and has a serial number attached to it for security purposes.
Many people are drawn to gold bars because they have a physical object to hold, reducing any reliance on third-party agencies being involved in the investment.
However, choosing to own gold bars will mean that investments can only be made or sold based on an entire bar. You can’t choose to sell only a small part of your gold investment, which is why many prefer the flexibility of gold coins.
Gold coins are often sought after by investors because they are issued by sovereign governments all around the world.
The nature of gold coins means that you purchase smaller sizes, giving you greater control over your investment.
Some collectors like to invest in rare coins that have a slightly higher value.
The most common gold coin is the South African Krugerrand. Other coins include the Sovereign and the Britannia (both still legal tender in the UK) as well as the Chinese Panda and the American Eagle.
However, like gold bars, the owner takes physical hold of the gold coins which can lead to security implications.
Many people choose to invest their money in gold jewelry, and for those who are looking for an emotional connection to their investment, it’s easy to understand why.
Financially speaking, however, it’s not the best way to invest your money in gold.
This is because there is such high demand for gold jewelry that your investment is unlikely to rise in value. There will always be jewelers able to make gold jewelry for other people, so it doesn’t have the exclusivity that gold bullion bars may have.
Exchange-Traded Funds (ETF)
If you don’t want a physical product, you could invest your money in gold exchange-traded funds (ETFs).
These are relatively new (they launched in the US in 2004) so this method doesn’t have the history (or the glamour) of gold bullion. However, they have proved extremely popular.
This is because gold ETFs are shares that represent a specific amount of gold.
Like other stocks, you can buy or sell them with ease and, because you are in control of how many ETFs you purchase, they can be ideal for smaller investments.
It’s important to remember that with ETF investments, you will need to find a reputable gold company/stock broker to act on your behalf. They will purchase the funds for you and are likely to charge management fees and expenses.
Yet many investors are drawn to ETFs because they don’t necessarily need to be actively managed. A benefit of ETFs is that they can be easy and safe for investors with small budgets and little time.
Simply put, a future is a contract to buy or sell a piece of gold on a specified date.
These contracts (which typically represent large amounts of gold) can be traded.
Due to the complexity around futures, they aren’t suitable for beginner investors. They require a lot of detailed understanding and knowledge to be successful.
Experienced investors are often drawn to gold futures because there are typically low commissions. However, the drawback is that prices may fluctuate, and the futures market is notoriously volatile.
Gold Mining Shares
Gold is both an element and a mineral. As such, it’s incredibly difficult to find. Gold mining companies will scour the earth to try and extract the precious resource.
As a result, some people choose to invest in gold mining shares.
These are options whereby you can buy shares from the companies that mine the gold. This, in turn, gives the mining companies the investment to continue mining.
Investors are drawn to gold mining shares because the value is far more sensitive to the current price of gold.
However, a gold mine’s reserve is never really known. There is no guarantee that they will be able to mine the gold, so the share price can fluctuate quickly.
A gold certificate proves that you own gold.
These can be bought directly from your bank (if they physically store gold).
The advantage of a gold certificate over gold bullion or a gold coin is that you can have more flexibility over its value. You will technically own gold (and the bank will honor your investment), but if your gold certificate is for unallocated gold, you won’t physically own bullion with a specific serial number.
However, there is a risk that if something happens to your bank and they are liquidated, you could lose your investment.
You can also purchase a gold certificate for allocated bullion. This means that you do physically own a specific gold bar but it remains in the bank’s vault.
Many new investors are drawn to gold certificates because it’s one of the easiest ways to invest in gold. You can simply forget about it, safe in the knowledge that the gold is held securely at the bank.
What Are the Advantages of Investing in Gold?
There are many reasons why an investor may choose to invest in gold over and above any other investment.
Here are just a few of the key advantages:
- It’s inflation-proof – As an investment strategy, you can feel confident that your investment will remain stable, regardless of what is going on in the world. Gold tends to be inflation-proof – it typically holds its value extremely well and it’s rare for your investment to depreciate.
- You can be in control of your investment – Gold is unlike other investments in that you may have a physical product to retain. This means that you can be in complete control over your investment. You can decide on your security systems and processes (whether you choose a safety deposit box or a bank vault) and you may not need to pay expensive management fees or expenses to third-party agencies. If you physically hold gold (perhaps bullion bars or gold coins), you always have this at your disposal. For those worried by economic crises or political uncertainty, having physical control over your gold investment can be reassuring.
- There will always be a demand for gold investment – Due to the global popularity of gold, there will always be investors willing to buy your gold. This means that liquidity is high, making it easy to buy and sell at a time that suits you.
- It’s a good way of diversifying your portfolio – Investing in gold is not dependent on the stock market, so gold can be an option for those looking to have a diverse investment portfolio.
What Are the Disadvantages of Investing in Gold?
As you know, no investment is ever foolproof. There are also disadvantages to investing in gold:
- You take responsibility for security – As much as this is an advantage, it’s also a disadvantage. You will need to find a way to safely store your physical gold bullion. You may need to invest heavily in secure deposit boxes or have a personal vault or bank vault where you can store the gold. Whilst this means that although you can choose the security system that you prefer, you have full responsibility if something goes wrong.
- Trading and storage costs can add up – Like many investments, if you choose to trade your physical gold, you can expect to pay trading costs. If you are storing your gold in a bank vault or a secure storage facility, you may expect to pay fees to extract your gold ready for trading.
- Short-term volatility – Although the price of gold increases over time, in the short-term it does fluctuate. If you are looking for fast investments that you can trade quickly, then gold may not be the right investment for you. Typically, gold increases in value by 9% over a year so if you’re looking for a quick investment portfolio to provide you with an income, you may be better off looking elsewhere.
What Determines the Price of Gold?
Supply and demand play an important role in determining the price of gold.
Sovereign governments and central banks are vital to the demand for gold as it is a core feature of most currencies.
The investment demand from those investing in ETFs can impact the price of gold as can mining capabilities. The scarcer physical gold is, the more it will soar in value.
The price of gold is also determined by the value of the US dollar. This is because the price is always listed in dollars. A weak dollar will mean that investors can purchase more gold which drives the price higher.
Where Do You Buy Gold?
There are many different ways to buy gold.
In some places, gold vending machines have appeared, making it quicker and easier than ever before to purchase gold. But these are gimmicky, and if you are a serious investor, they should be avoided.
Globally, the cheapest place in the world to purchase gold is Hong Kong. Within the central district, it’s not uncommon to find global banks selling gold at low prices.
However, if flying to Hong Kong is a bit beyond your budget, it’s worth looking at companies that sell gold bullion by post.
There are reputable companies who will deliver your gold bullion or your gold coins directly to your house, through insured couriers. Alternatively, you should speak to your bank who may be able to advise whether they sell gold directly, or whether they sell gold certificates.
Another option is to look for a specific bullion dealer. These are professional gold experts. They deal in gold bullion and will be able to offer you advice about your gold purchase.
However, it should be noted that bullion dealers may charge transaction fees as well as storage fees if they are responsible for securely storing your gold.
A final option is to speak to a stockbroker.
They will be able to advise you about gold ETFs, gold mining shares or gold futures.
Like many investments, they will likely charge fees for buying or selling your gold, as well as for proactively managing your investment on your behalf.
The Best Gold IRA Companies to Invest In
To get you started, here some gold IRA (Individual Retirement Account) companies that you may wish to explore as you begin your gold investments:
1. Regal Assets
Regal Assets is a company that allows you to diversity your investment portfolio.
You can choose to invest in physical assets (such as gold and other precious metals) as well as digital assets such as cryptocurrencies.
Designed as 'the world’s first Alternative Assets IRA', Regal Assets can be used to effectively plan for your retirement.
It is thought that investing in digital assets can boost your profits whilst additional investment in hard assets can lead to protection from fluctuating market prices.
With over a decade’s experience, the firm is one of the US’s highest-rated alternative asset firms. It has been recognized by the likes of Forbes, Bloomberg and The Huffington Post and boasts that high-profile figures such as Dennis Miller, Laura Ingram and Lars Larson are amongst its clientele.
Regal Assets is a great option if you want to diversify your investment portfolio into a variety of different precious metals. As well as purchasing gold online, you can also choose to invest in other metals such as Silver, Platinum and Palladium.
It is quick and easy to set up an account with Regal Assets to purchase your gold online.
Within just four simple steps, you can be on your way to fulfilling your investment purchase. And with multiple storage options available throughout the US, as well as in Singapore, you can feel confident that your investment is held securely.
BullionVault specializes in buying and selling (and storing) gold and silver.
It is one of the largest online bullion dealers in the world, with more than 90,000 users, reassuring you that your investment is in safe hands.
The company prides itself on its ease of use – within just two hours you can own any quantity of gold or silver bullion.
There are typically four types of fees you will be expected to pay if you invest via BullionVault:
- A dealing commission (currently 0.05%)
- Storage and insurance
- A burglar alarm
- A fund wire fee for US and international transfers (typically no more than $30)
Another benefit of BullionVault is that you can choose where to store your physical gold.
The firm has professional-grade security vaults in London, New York, Singapore, Toronto and Zurich. You have complete control over your storage choices.
3. Birch Gold
The Birch Gold Group is an experienced precious metal dealer, specializing in selling gold, silver, platinum and palladium.
It excels in helping individuals look after their retirement plans and has a team of wealth managers, financial advisors and commodity brokers to help you make the most of your investment.
Birch Gold allows you to purchase gold online in two different ways:
You can either take physical possession of your gold bullion and maintain responsibility for its security, or you can convert your IRA or 401(k) to protect your savings.
Whatever your choice, the Birch Gold team is available to help you understand what to expect from your investment and how you can maximize your savings.
For those new to buying gold online, the Birch Gold website has a highly informative website that provides detailed analysis and insights into why purchasing gold (or other precious metals) is so beneficial.
As well as explaining why you should invest in precious metals, there’s also a historical and interactive price chart that allows you to see at a glance how gold has held its value during difficult economic times.
Birch Gold is endorsed by Ben Shapiro, and over the past five years, the company has worked with Mr Shapiro to explain why investing in precious metals can be an effective way of protecting your retirement savings.
This may sound confusing; after all, it’s combining online currencies with physical items, but it is growing in popularity, with over 31,000 customers around the world.
Many people choose to invest via Vaultoro because they appreciate the low charges.
They also appreciate that when you purchase your gold bullion via Vaultoro, the allocated gold remains your legal property so you can take physical hold of it, or you can trade it in for cryptocurrency.
If you’re nervous about investing in gold bullion bars, why not ease in with collectible coins?
We mentioned above that some investors like to collect rare gold coins. The UK Coin Company offers a wide range of collectible coins that fit in with any investment plans.
The company doesn't only sell UK coins but offers a large variety of collectible coins from around the world.
A favorite is the ‘2020 Royal Mint Gold Proof 2 oz James Bond 007 £200 coin’ which is retailing for £4,900 (or $6,500). This is likely to grow in value.
A benefit of choosing to invest in rare collectible coins is that you can tailor the coin to your interest.
From the 2017 Jane Austen coins (issued by the British Royal Mint) through to the ‘1998 W American ¼ oz Gold Proof $10 Ten Dollar Eagle’ issued by the United States Mint, there is something for everyone.
There is a reason why gold has been an investment choice for millennia. Its steadfast nature and strong performance mean that it’s a clear choice for those who are looking for long-term investment and a safer return on their money.
A positive about investing in gold is that the multitude of investment scenarios make it far more accessible for first-time investors. The low starting point with gold coins means that they are not just for serious investors, it can also be a hobby.
We recommend that before you invest in gold, you pay close attention to the changing prices. The price of gold can alter quickly so you need to feel confident that you are buying at the right price.
If you are planning on purchasing physical gold, you need to factor in how you plan to store the bullion and whether there are any storage fees in place.
When it comes to investments, there are no guarantees. Always take advice from a qualified financial advisor before making any final decisions.
WikiJob does not provide tax, investment or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor, and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.