More and more people are doing online shopping nowadays because of its advantages. First, online prices are usually lower than what you can find in traditional stores. An online shop won’t have to pay for what brick-and-mortar establishments do to keep their business running. Plus, online stores tend to have a national reach, sometimes even to international markets. For gold, online dealers usually sell higher volumes of bullion and enjoy significantly lower fixed costs. Because of this, they can pass on the savings to their customers in terms of lower costs.
However, not all gold buyers would be confident to buy from an online dealer. Gold is a very expensive commodity, so people are usually wary especially if they would buy it from a faceless representative they only met online. This is probably why up to now, with all the advances in technology, local gold dealers continue to remain in business.
Here are The Smart Investor Select’s picks for the top gold dealers:
Based in Texas, JM Bullion offers a variety of precious metals to buyers for purchase. Some of the metals available for purchase include gold, silver, platinum, palladium, copper, and other metals. Established in 2011, the bullion has built a strong business that aims to satisfy its customers.
JM Bullion takes this satisfaction to a new level by accepting a variety of credit and debit cards, PayPal, cryptocurrencies, and wire transfer for transactions. They also accept returns as long as they are made within five days from the date of purchase. The bullion also buys precious metals from sellers, although they only buy quantities higher than $1000, so small sellers may not benefit from this. JM bullion is rated A+ by the Better Business Bureau.
Goldbroker is an online investment platform with its head office in London, UK. It is a 100% real investment deal where clients have legitimate ownership of their assets by signing an agreement. The organization also puts stringent security measures in place, such as insurance for all the precious metals. These bullions are kept in a safe box and may be assessed at any time. Here, clients can own physical bullions like gold bars, silver bars, gold coins, and silver coins.
There is no intermediary between the owner and the bank; hence, it reduces potential risks. There have been many positive reviews on customer service and overall organizational performance. Trustpilot gives it a 4.7 out of five stars while Better Business Bureau awards it an A+ for business practices.
Money Metals Exchange
Investopedia recently named Money Metals as the “Best Overall” precious metals dealer on the Internet in recognition of its high integrity, value pricing, wide array of services, and beginner friendly approach
Money Metals Exchange ranks as one of the most successful vaulting facilities in America. Bullion coins are in various forms like the US, Canada, Britain, Mexico, and South African mints. A significant selling point is that assets are secured even while in transit until delivered to the investor. It is accredited by Better Business Bureau, which awards the company with an B+ for organizational performance.
SD platinum is an investment company that began in 2012, with its head office in Ottawa Lake, Michigan. It provides investors with bars and coins bullions in silver, gold, platinum and palladium. SD bullion permits investors to fund their accounts via credit cards or checks. It is known for its competitive rates and low prices while guaranteeing a safe and secure transaction. The company provides storage facilities for these precious metals and makes deliveries – shipping is free of charge on orders above ninety-nine dollars and within the US.
Investors can create accounts from their homes' comfort with live chat assistance, ready to answer the subject's questions. The live chat option is only available within the stipulated time. A significant attraction is the number of positive reviews and feedback from clients. SD Bullion is accredited by Better Business Bureau and is awarded an A+ for customer service and a Trustpilot score of 4.3 out of five stars.
Bullions Exchanges is an investment medium of precious metals with its head office in New York. There are the gold, silver, and platinum bullions and the recently emerging metals like palladium, copper, rhodium, and ruthenium. Unlike its contemporaries, Bullion Exchanges runs a rewards program as a way of appreciating long-term clients for years of support and patronage.
The billionaire club rewards program was introduced in 2013 and opened investors to enormous benefits. A live chat option is available to equip interested parties with the much-needed knowledge before creating an account. Rates are competitive, and there is a price match guarantee on products that are identical to other companies’. Trustpilot rates Bullion Exchanges with a 3.2 out of five stars for customer service. Better Business Bureau accredits the company and awards it an A+ for organizational performance.
Golden State Mint
Golden State is a minting organization located in Florida, specializing in silver, gold, and copper coins and bars. It also includes the recently introduced platinum and palladium metals. These metals are custom made for you; hence, minuses intermediation cost. It may come in various forms and designs to suit clients' tastes.
Golden State Mint has been operating in the market for over forty years and has grown to become a household name and a trustworthy brand. There are no minimum orders with the company, and customers can expect to get the best shipping rates on the market and a delivery time of one to seven days. American residents enjoy free shipping on orders up to $99 and above. The organization is accredited by the Better Business Bureau, which gives it an A+ for organizational performance.
Birch Gold also provides bullion investment opportunities for retirement through IR Accounts. It has been in the market for over 17 years and is located in California. Clients in up to fifty American states can invest in old, silver, platinum and palladium metals. Investors can withdraw bullions at any time via delivery through shipping or can be liquidated and withdrawn as cash.
Birch Gold is in partnership with companies like Kingdom Trust and STRATA Trust to provide top-notch IRA services. These metals are safely stored in vaults and insured up to $1 billion. Birch Gold is accredited by Better Business Bureau and scores an A+ for organizational performance. It has an excellent Trustpilot score of 4.8 out of five stars for a high number of positive reviews and customer feedback.
Goldmoney is an investment organization for precious metals. It allows you to buy and store bullions like gold, silver, platinum, and palladium. These metals may be shipped to the investors or stored in a safe vault. Clients have physical ownership of these metals and can manage their accounts online. Every investor has a relationship manager to deal with directly in case of any questions, complaints and updates. The stored bullions are insured and may be withdrawn at any time or liquidated for cash in nine different currencies.
There is no minimum purchase amount. Goldmoney provides direct ownership of all metals with no use of an intermediary. There is also a retirement plan that is available in gold and silver bullions. Better Business Bureau scores Goldmoney a C for overall organizational performance while Trustpilot gives an average score of 2.8 out of five stars for customer service.
The Royal Mint
The Royal Mint is one of the oldest and pioneering mint establishments. It is over 1100 years old, and it still contends with modern and more tech-savvy mints opened today. Established in 886 AD in Wales, the mint has served customers in the UK and worldwide, offering them access to bullions and a variety of other services. The mint's services include bullion account management, secure vaults for precious metals, and gold pension accounts. Users can buy gold through online accounts and have their metals delivered securely to them. They have improved their service over the years and created a chain of authorized distributors that help improve the logistics of delivering the commodities to buyers and improving the overall experience. The Royal Mint is rated 2.1 stars by The Trust Pilot.
The Perth Mint
The Perth Mint is a legacy bullion spin-off founded in 1899 as an exception of the British Royal Mint in Australia. The establishment has grown to become a national institution and has expanded its offering online to cater to its clients' 21st century needs. It has also recently become a tourist destination, and the mint is recognized as an online leader in contemporary coin technology.
The Perth Mint offers buyers bullion coins and host a third party e-commerce facility that allows them to buy and sell their commodities to other buyers. As one of the oldest in the business, they have adapted their strategies to ensure print delivery and super-efficient processes that allow them to offer customers top-notch service. The Perth Mint has a 3.4-star rating from The Trust Pilot.
Golden Eagle Coins
Golden Eagle Coins is a down to earth gold seller for small buyers and sellers. It was established in 1974 and had been waxing strong since its inception to date. It has grown to become a modern contender to other bullions by adapting its systems and processes. It offers buyers gold, platinum, silver, copper rhodium, palladium, and US coins.
The bullion accepts a wide range of payment options, including Credit cards, bitcoin, money order, cash, paper check, PayPal, and wire transfer. There is free shipping available for over $100, while products under will cost a few of $9.95 while buyers who want express and priority shipping would have to pay between $14 to $25. Golden Eagle Coins have an A+ rating from the Better Business Bureau.
Table of Content
Gold has always been considered one of the most important investments, especially during or when anticipating a bear market. This is because it can act as a hedge to inflation. It can do this due to its limited supply and its reputation as a store of value.
Long ago, gold was used as the main form of currency in the world. As recently as 1971, most of the currencies in the world were directly or indirectly pegged to gold.
While that isn’t the case in the modern world, gold is still considered the main safe haven for investors. Here, we will be exploring why or why shouldn’t you buy gold. More importantly, we will be looking at ways through which you can purchase gold, and how to find a gold dealer that is right for you.
What is a Gold Dealer?
You may like to think of your local jewelry store as a gold dealer. While that may technically be true, we in the investing world tend to think of dealers differently.
A gold dealer is anyone that is able to make a market for gold. A market maker is someone ready and willing to both sell and purchase a particular financial security or commodity.
Historically, a person or entity was considered a gold dealer if they were able to make a market for at least 500 ounces of gold. Nowadays, the term gold dealer has come to mean many things. It may even refer to wholesalers who purchase and sell gold to retail dealers and much more.
For you, a gold dealer is anyone who has the capability and the willingness to both sell and purchase gold from you. Whether or not it's physical gold is up to you. We will be looking at gold dealer types next, before venturing into what is the best way for you to hold gold.
Types of Gold Dealers
Since there is no set definition of a gold dealer, you can consider a lot of people to be gold dealers. Even those that are not involved in the financial markets. Here are various types of gold dealers that you can use to purchase and sell gold:
- Companies/Dealers of Precious Metals
Let’s take a detailed look at each of them.
1. Companies/Dealers That Deal in Precious Metals
This is the easiest way to get yourself gold. You can get gold bullion from one of the dealers that specialize in selling it.
Remember that many of these dealers will also offer to hold the gold for you, and give you certificates of ownership instead. If the dealer is respectable, then this is a hassle-free way to own gold.
Certain governments also have mints that produce gold coins. These coins are usually worth a lot more when melted, but you can purchase them for hoarding gold all the same. In the US, for example, the American Eagle comes to mind.
Yes, you can purchase and sell gold through brokerages. In fact, there are multiple ways to gain exposure to gold through your broker.
For one, you can gain exposure to gold by purchasing futures contracts. However, this will be a contract that will be settled by cash, and you will not own the underlying gold. While this is probably not the best way to expose yourself to gold for the long-term, futures can be a great way to hedge your positions.
You can also purchase gold mining stocks, and gold Exchange Traded Funds (ETFs). A gold ETF will own physical gold, whereas the mining stocks will be involved in the process of extracting the metal from the earth.
Yes, you can consider a jeweler as a gold dealer. While we would never recommend buying gold this way for investment or hedging, you can technically do it. The value of the gold will still rise or fall in the same way as it would if you held it in other forms.
Why Does the Price of Gold Increase?
Many factors can influence the price of gold. Like most other assets, the price that gold is sold for at any particular time is determined by the supply and demand for the asset. Numerous factors may influence this supply/demand. Let’s look at some of them:
- Gold is considered to be a very good store of value. As such, it is in high demand during times of inflation. People consider it to be a store of wealth, something that will hold firm no matter how much currency depreciates due to its limited supply and history as a store of value.
- Demand from major funds, especially Gold ETFs, can massively influence gold prices.
- A fall in the supply can also cause the price to increase. The only supply of gold is mining, and the mining of gold has not increased in the last few years.
- Demand for gold to be used in jewelry can also influence its price. India is one of the largest markets for jewelry and makes up a huge portion of the consumer demand for gold.
- Industries that require gold can also influence demand (e.g. electronics). However, remember that gold has very few uses in industry. As such, the vast majority of it is simply held as a store of value.
When people expect the economy to take a downturn, gold demand increases as it is considered a stable asset, and thus a hedge against volatile assets.
Remember that the price increase may not be based on what is happening now. Instead, it may be based on what may happen in the future. Investors, anticipating that there may be an inflationary recession around the corner, can purchase gold to hedge themselves against that risk.
How to Find the Best Gold Dealer?
There are numerous factors that you must keep in mind when it comes to selecting the right gold dealer. Let’s start by looking at the most important ones:
Pricing and Fees
Prices of gold can vary according to the dealer. As such, you want to spring for a dealer that does not overcharge for the gold itself.
On top of that, you must also keep in mind the fees when purchasing gold. If you are looking to use gold as an inflation hedge, chances are that you will not be buying and selling it too often. However, depending on the size of your portfolio, it is still possible for the fees to have a noticeable impact on the amount you end up paying.
Range of Products
Always make sure that your gold dealer can offer you a wide range of gold products. It is not possible to purchase gold to the decimal place (in terms of grams). As such, you will need a dealer that can best serve your needs, no matter how large or how small they may be.
Security of the Dealer
Go for a dealer that is trusted. If you are going to your local dealer, then you will be able to take physical delivery of the gold upon payment. Online dealers, on the other hand, must be vetted thoroughly before you make a purchase.
It is best to educate yourself about the asset before you purchase it. Gold scams are much more common than you think, and you do not want to be the victim to them.
Pick a dealer that can take payment in a wide variety of ways. On top of that, make sure that they are also able to pay you the way you want in case you want to sell.
It is also best to consult the reviews and make sure that the dealer does not delay payments unnecessarily. If you want to sell gold and buy stocks, you want to do it right now, not a week from now!
The Pros and Cons of Physical Gold
Physical gold can refer to a lot of things. Here, we are thinking of physical gold as gold bullion.
Gold bullion consists in the form of bars or coins and is used for investment purposes. Here are a few advantages and disadvantages of purchasing gold this way.
- This is the most secure way to hold gold. If you are in physical possession of your gold as opposed to holding it through a fund/company, you are not liable for the actions of the company. For example, if you hold gold through a third-party and that third-party goes bankrupt, you can lose your gold.
- You can diversify through gold however you want. Gold has one of the most active and liquid markets in the world, and it is not difficult to find a seller or a buyer of it. Depending on how your investment needs change, you can very easily increase or decrease the gold in your portfolio.
- Holding gold in its physical form is very simple. You do not have to worry about leverage or anything of the sort. The amount of gold you have is the amount of gold you can sell at its fair market price.
- Gold has had terrible returns historically. While gold is a great asset to have during market downturns, it fails to perform when stocks and other financial assets are doing well.
- Gold does not generate any income for you. As opposed to dividend-paying stocks or real-estate with rental income, the only way to profit from gold is by selling it at a higher price.
- Holding physical gold leaves you vulnerable to storage costs. This is the cost that you need to pay to store your gold in a safe place.
- Gold is taxed differently than other assets, leading to complications in your portfolio.
Should I Buy Gold in 2022?
This depends on your risk appetite and what you think the markets will do next. Here are the factors that you should consider before you purchase gold:
How Will the Do Markets Perform?
If the markets are doing well, then gold may be a bad investment. Over the last 100 years, stocks have massively outperformed gold and other precious metals. If your analysis shows that the stock market will rise in the next years, then investing in gold may not be a good idea for you.
What Will the Inflation Rate be?
Right now, inflation is very low. However, that could change. A rise in inflation usually leads to more and more people investing in gold. We just saw the governments introduce two huge stimulus packages in 2020 and 2021. These packages required a lot of money to be printed by the governments, and unfortenately, we already see the fruits in 2022, when inflation rate is higher in the last 20 years.
If you think that 2023 will be a year with high inflation, then investing in gold is a good idea. However, if you think that inflation will stay roughly where it is, then other investments will be more appealing than gold.
Consider Your Current Portfolio
Take a look at your current portfolio. It is possible that you already have enough gold (or Gold ETFs) that purchasing more gold does not make sense.
It is also possible that you have invested in other assets that are considered to be a store of wealth. While debatable, many people think that cryptocurrencies are a store of wealth.
If you are one of those people, your portfolio may be already appropriately hedged against inflation and market downturns.
How to Spot a Gold Scam
Gold scams are very common. Since there is not a lot of regulation surrounding the industry, it is not that difficult for you to find dealers that look very legitimate but aren’t.
Here is how you can spot a gold scam before purchasing or selling it to a dealer:
- Make sure you know what you are doing. Understanding the basics such as how purity works in determining the worth of the gold and how to properly weigh bullion is compulsory before you purchase gold.
- Always stick to dealers that have a stellar reputation and have been in the business for a long time. They can not only protect you from scams but can also offer you better products due to having a more reliable and capable network.
- If a deal seems like it is too good to be true, then it probably is. Always remember that there is no easy way to make a profit. Your objective when buying gold is to protect your wealth, not enhance it.
- Remember to avoid buying coins that are thought to be rare and are selling way above their actual value (the value they would have if melted). There is no indication that their prices will continue to rise or even stay the same.
- Avoid coins that are selling below their spot prices. As we said, offers that seem too good to be true probably are.
Online vs Local Gold Dealers
Schiff Gold, a company that is owned by one of the biggest advocates of gold in the world, summarizes this perfectly.
Purchasing gold from a local dealer is much easier, and it will give you greater peace of mind. However, gold at local stores is usually available at a significantly more expensive cost as opposed to online retailers.
Large, reputable online dealers can thus help you save the most amount of money if you go that route. As long as you can find one that is able to securely and reliably ship you gold that you want to purchase, then online gold dealers will be ideal.
How Do Beginners Buy Gold?
As a beginner, you should avoid complex instruments such as futures. There are essentially two main ways through which beginners can acquire gold.
The first one would be by purchasing ETFs. In fact, if you are a beginner who is already trading stocks and other assets, this is probably the best way to move into gold. You will be able to purchase the ETFs without much hassle, and there is almost no way that purchasing an ETF could result in you being scammed by the dealer.
The second way would be by purchasing physical gold. However, remember to follow our explicit instructions on how to avoid being scammed. Also, make sure that you do your research and understand gold as an investment product before taking the plunge.
How to Check a Gold Dealer’s Reputation?
As stated above, you should make sure that your dealer is reputable before going ahead with your purchase. Gold scams are rampant, and an unreputable dealer may have nefarious intentions when dealing with you.
Here is our guide on how to check a gold dealer’s reputation:
- Check online reviews.
- Confirm how long the dealer has been in business. The longer the better.
- Try to check as many news posts about the dealer as possible.
- Consider the selection of products that they offer.
- See how efficiently they communicate with you, and whether they try to offer you deals that are too good to be true.
Which Bullion Coins Are the Most Popular?
Bullion coins can become popular for a lot of reasons. Whether they do it because of their looks or their heritage, it shouldn’t matter to you as an investor.
However, going for popular bullion coins is always a wise idea. This is because they are the most liquid, and thus the easiest to sell if you are in need of a quick cash injection.
Here are the 5 most popular bullion coins in the world based on total sales:
- American Eagle: These coins are available through the United States Mint and come in various sizes. Considered the sign of American currency, this is by far the most popular bullion coin in the world.
- Canadian Maple Leaf: Showing a maple leaf on one end and Queen Elizabeth II on the other, the Maple Leaf is available through the Royal Canadian Mint. After the American Eagle, this is the most popular coin on Earth.
- American Buffalo: After the Eagle, this is the most prominent American gold coin. Released initially in 1913, it is still an extremely liquid coin to own.
- South African Krugerrand: Named after the first president of South Africa, the Krugerrand is available in many sizes. It is not produced anymore and is a little rarer compared to the other options. However, it is still traded widely, and you can readily find it through online retailers.
- Austrian Philharmonic: This is a very recent coin, first minted in 1989. The Austrian mint guarantees each coin and is available in multiple sizes.
How Much do Gold Dealers Pay for Gold?
Gold dealers understandably pay a little less for gold as compared to its market value. This is because they have to then pay for storing the gold, and eventually selling it for a profit.
If you can find someone to purchase gold from you at its current market price, it will be best for you. It might even be better for the purchaser, as dealers often sell gold at a premium.
However, when you sell to a dealer, you should expect to make a few percentage points less than the current market price of your gold. This is for when the gold is in bullion form. For jewelry, you can only expect to make between 70-80% of its intrinsic value when selling to a gold dealer.
Should I Buy Gold Coins or Gold Bars?
Gold coins can often sell for more than their spot price due to their value to collectors. Many coins regularly sell for over 30% of their spot price. In fact, the rarest coins are not even used as an investment vehicle, but rather as a collector’s item.
Coins are also purchased at a premium. Even the newly minted ones require more money to purchase due to the additional minting costs. Bars, on the other hand, are usually priced very closely to their spot price.
The value of a gold bar is much easier to determine than the value of a gold coin. As such, it is better to go for a bar as long as your sole purpose in purchasing gold is to have an investment that can easily be offloaded. Coins, on the other hand, can serve as a decoration and be a commemorative piece. They do not present any additional utility in terms of an investment.
3 Interesting Facts About Gold
To take a break from all the serious stuff, let’s take a look at three interesting and exciting facts about gold:
- Gold is actually edible in small amounts. Many delicacies exist across the world that use trace amounts of gold.
- Pretty much all the gold in this world initially came from meteorites that bombarded the Earth.
- Gold, while used sparingly in industry, is found everywhere in our daily lives. From radiation shielding and glass colorings to electric wiring, medicine, and electronics.
Now, back to the serious stuff!
Do Banks Sell Gold?
For the most part, they don’t. There are some banks that sell gold, but the number is increasing day by day. Even the banks that do sell gold, sell a very limited range of products. As such, if you are serious about investing in gold, then you will need to contact a reputable, large-scale dealer.
Usually, banks that do sell gold sell it in coin form. As such, unless you are okay with purchasing gold coins, you will need to look for other avenues to purchase gold from.
There are rare instances when banks may decide to sell gold. For example, it is common to see banks selling gold during times of crisis. Even the US central bank was selling gold during the coronavirus pandemic. During times of economic turmoil, gold prices often skyrocket. As such, banks want to take advantage of this by selling some of their reserves to ease the financial blow that they are facing.
How to Store Your Gold
Gold is simply a piece of metal. As such, it can be stored anywhere. However, there are obviously better ways to store it than just leaving it in your bedroom drawer. In general, there are three main ways for you to store your gold. They are:
- Store it in your home.
- Store it at the bank.
- Pay a third-party to store it for you.
If you are storing your gold in your own home, then it is best to invest in a safe-deposit box. Also, remember to take all the necessary precautions to prevent theft and loss.
Unless the amount of gold you own is extremely small, a bank or a third-party is a much better option for storage. It is best to consider the banks and the third-parties available to you in your area. While you can have your gold stored thousands of miles away from where you live, retrieving it will be a huge problem.
As such, compare the prices, reputations, and the security features of the storage options available near you, and pick the one that fits your needs best.
If you are going with a third-party, make sure that you pick one that specializes in keeping gold. Numerous organizations will help you purchase, store, and sell gold. These organizations generally have huge networks that they can use to quickly move large amounts of gold. Using them will be the best option for most people.
How Much Gold Can a Person Own?
This is a reasonable question, as there are limits around gold ownership depending on where you live. Numerous countries restrict the ownership of gold as it can be used to hide wealth.
However, these countries are usually found in the developing world as that is where the governments are unable to collect sufficient revenue.
In most Western nations, including the USA, there is no limit to private gold ownership. You can own as much as you like. All you need to keep in mind is how you will store it, and the costs associated with the storage.
That is not to say that things were always so good for gold owners. In 1933, President Roosevelt banned ownership of Bullion or the use of gold for monetary purposes. However, people were still allowed to keep up to $100 in gold (a huge amount at that time).
How Can I Buy Cheap Gold?
Sorry to break it to you, but there is simply no way for you to buy cheap gold.
This does not mean that you cannot mix and match various dealers to get the best possible price on the gold you buy. Neither does this mean that you cannot use technical factors to better time your entry into the markets!
All we are saying is that just like we discussed above, offers that let you purchase gold for much less than its fair market price are usually bogus. If you want to purchase gold, expect to pay the correct price for it.