How and Where to Buy Gold

Gold is currently a hot commodity. While jewelers make it glitter and adorn beautiful people with it, people, banks, nations, investors, hedge funds, ETFs, and even the International Monetary Fund buy, hold and sell gold. The reason? It may be a hedge against swings in the markets.

The problem is the word "may". No one knows and no one can assure you that gold will go up or down. But you can count on the fact that it will be volatile and that is a problem for the short term investor. If you are buying gold for a short term hold you are taking a risk. The reward may be good but it is just as likely to be bad.

Before investing in gold, consider these four tips on how and where to buy gold.


Define Your Objective
Why you are buying gold will determine how you buy gold. Decide if this is an investment, emergency currency fund, hedge against inflation fund, or short term profit oriented strategy. Your answer as to what your objective is sets how you will take possession. The choices are to take personal possession of bullion or coins, to have someone hold your gold for you, or to invest in the stock of a gold mining company or ETF.

Select Your Broker There are many entities who handle different types of gold transactions. You can buy bullion through large gold resellers, local gold stores, or coin dealers depending on what you are looking for in your purchase. Most stock brokers can also sell you gold mining company shares or ETF shares. Each specialize in different commodities but there is one constant: make sure your dealer or broker is reputable as you normally have to advance the funds and receive delivery days or even weeks later.

Time Your PurchaseLately gold has been moving as much as $100.00 an ounce up and down in a single trading session. As with any investment purchase it is best to avoid buying at the top of the market. No one can tell you what will happen in the next hour much less 24 hours so you should do your own research before making apurchase. Observe how the market reacts to news events and other variables that you feel may force the price up or down. Listen to your broker or vender and try to learn from them how trends will likely unfold always remembering that they make money off your purchase and sale; not off the gold they are selling. So they want you to buy or sell. The reputable ones will value your business and try to be helpful. Then make your decision based on your best guess as to where the market is going.

Verify What You Have Bought There are many ways to defraud a gold buyer. Make sure you count or weigh your purchase to ensure it has not been 'shaved' to some degree. Make sure the coin is the coin you specified. Make sure the purity and weight markings are what you specified. Take it slow and ensure that you have received what you agreed to buy at the price originally agreed upon when you sent your funds.

While buying gold is not a negotiation the same techniques of preparation and patience apply. The due diligence you put into your research before making a purchase will pay dividends down the road. You understanding the needs and wants of the broker help you filter the information he or she is providing you. By your having the ability to decide when to buy or sell, it gives you the power to resist the pressure of a gold salesman. In this negotiation the broker is a middleman. You are the buyer and the variable is time and strike price. You are negotiating against the market and the market is insensitive to your manipulations.