Gold is considered a safe investment because of its opposite reaction to devaluation of currency. To buy gold online requires some forethought and a little bit of homework. There are also a few pitfalls that investors can learn to avoid when shopping the online gold market. This article will discuss how to buy gold online, some safety protocols that investors can use to improve risks of buying online, how to understand gold pricing, and where may be the best sources for buying gold online.
Buy Gold Online – Determine what kind of gold is right for your investment portfolio:
The first question that must be answered before even beginning to buy gold online is what kind of gold are you looking for. This is a question about your investment portfolio and how adding gold as investment may change the portfolio for the better. There are many different forms in which gold can be purchased. Gold bullion is one of the more popular forms of gold for investors. Gold bullion, however, implies gold bars but that is not always the case. Sometimes gold bullion is sold as gold coins, gold blanks, and not as bars. The primary difference between these forms of gold bullion is weight. It is also important that when the decision to buy gold online is made that all gold that is purchased in the same weight factor. The typical and primary weight for investors is in troy ounces. Once the investor has determined what kind of gold they are shopping for, they can begin to look for outlets that sell gold online.
Buy Gold Online – Storage:
Gold is not only heavy it is very valuable. This is one reason that investors may choose to store gold off-site. Gold vaults are more secure than a home storage facility. Home storage usually depends on stealth as a primary method of safety. Stealth is not a barrier, and if the gold can be found, it can be removed. Even strong boxes and safes may not be adequate protection to keep gold from thieves. Another issue that should be considered is that having gold in your home puts your family at risk. If someone were to break in and try to steel the gold stored in your home, it is likely they would encounter your family and cause harm. Storing gold off-site is usually a better alternative to storing gold in a home. Banks offer safety deposit boxes as storage and banks are pretty secure from everyone except the government. The government has in the past raided banks to acquire gold that was stored in safety deposit boxes. A gold storage vault makes a great deal of sense. How the gold will be stored, is a question that should be answered before buying gold online. Storing gold is a cost that will affect the premium price of gold. This cost should be considered when it is time to sell gold online.
Buy Gold Online – Premium Price of Gold:
The premium price of gold is basically the price of the gold plus all of the costs associated with buying the gold. This is a comparison between the spot price of gold and quoted price of gold. There is a formula that can be used to determine what the premium price of gold is. The formula is the quoted price of gold subtracted from the spot price of gold. The result is divided by the spot price of gold. This result is then multiplied by 100 so that the answer becomes a percentage. The percentage is the premium price of gold.
QP – SP = X, X/SP = Y, Y x 100 = PPG
Understanding the premium price of gold is the first step in being a wise gold shopper. Most expert investors know that the best price for gold is the price that is closes to the spot gold price. This is because as the price of gold fluctuates a profit can be achieved quicker if the premium price of gold is close to the spot price of gold. The spot price of gold can refer to either the monthly average price of gold or the daily price of gold. The spot price is an average of the lowest and highest price of gold. For the daily spot price, the average is taken in the last two minutes of trade. The spot price of gold is important because that is the reference point to what the current price of gold is.
Where To Buy gold online?
Gold can be purchased from many different venues. The recommend choise is www.goldmoney.com and a favorite of mine. One of the best places to begin shopping for gold is at various mints. Mints typically have a premium price of gold that is around 4%. This means the spot price plus 4%. A good investment is determined by return on investment (ROI). To make a profit on mint gold, the current price need only rise 4% to break even. This is better then any other deal where the premium price of gold is over 4%.
Online Auction houses can also be a good place to consider buying gold from. There are risks involved in buying gold online. It is critically important that the buyer is certain that they are getting exactly what they are paying for. Be aware of hidden charges and mark-up costs. It is advisable to never make a purchase without doing the research. Transactions that are rushed or pressured from the seller can be extremely dangerous. Reputable brokers will usually have an association with a mint. Investigate potential sources of gold by contacting the agencies that they are affiliated with. The web page of each broker should have a great deal of information on it. This is a good place to extract information about whether or not the broker in question is reputable. One key piece of information that should appear on the website is a full address and contact person. It is advisable to send a letter to the address and request a brochure. This is a simple way to verify if the address is legitimate.
Buying gold online can be a positive investing experience, but some safe guards should be maintained. It is our hope that this article will help to make the process to buy gold online a positive experience by showing a little bit about the background of buying gold as well as a few of the common safety practices that investors may find helpful. If the desire is to sell gold online, then the investor should follow these same guidelines. The best practices of investing should return a profit while maintaining the smallest risk possible. Shopping around for the best deal should include more then just price. Whether the goal is to buy gold online or to sell gold online, following these simple rules will make investing a joy. Enjoy investing by buying gold online.