The Golden Guide: 7 Essential Tips for Buying Gold in the US
What do you need to consider when investing in gold? Discover the most important tips for purchasing gold in the United States in the following guide.
Gold has managed to maintain its value over centuries, making it one of the few assets with enduring popularity. Another reason to consider gold as an investment is that its value is relatively independent of fiat currencies such as the US dollar.
Unlike countries that restrict or even prohibit gold ownership, the United States has favorable ownership laws for gold. Gold bars are considered legal tender under US law, which means that no customs duties or value-added taxes need to be paid on gold purchases. Internationally renowned gold refineries like Argor Heraeus, Metalor, Pamp, and Valcambi operate in the United States. American banks and gold dealers offer numerous options to meet various investor needs.
Below, moneyland.com has compiled seven tips and cost-saving measures for purchasing gold in the United States.
Alternatives to Physical Gold
If your primary goal is to profit from buying gold, consider alternative investment instruments in addition to physical gold. Exchange Traded Funds (ETFs) are one such option for participating in the gold market. Although ETFs entail fees (in the form of TER and brokerage fees), they offer the advantage of a liquid market. Gold ETFs are much easier to trade compared to physical gold in the form of coins or bars. To buy and sell gold ETFs, it is advisable to use cost-effective online brokers.
Gold certificates are another alternative to physical gold. These certificates are debt instruments that can be traded like other securities. They allow investors to invest in gold without purchasing physical gold. Such certificates can be bought directly from providers or through online brokers.
Precious Metal Accounts
Many US banks offer accounts denominated not in US dollars but in gold. By holding such accounts, you can benefit from the expected preservation of gold’s value and the potential for appreciation.
Furthermore, trading and transferring gold with a precious metal account is easier and more cost-effective. However, there may be costs involved when transferring to another bank. The downside of such accounts is the ongoing fees. Here is an overview of US precious metal accounts.
Secure Storage of Physical Gold
If you wish to acquire physical gold, it is worth considering renting a safe deposit box from a bank or an independent institution for security reasons. Alternatively, you can invest in a securely built safe.
Some trading companies offer the option to transport the gold to your own or a rented safe deposit box for a fee. Storing the gold directly at the bank or trading company from which you purchased it eliminates the need for transportation.
Compare Dealer Prices
Banks and trading companies charge different prices for the same amount of gold. The most expensive providers can charge up to $80 per ounce or up to $500 per kilo-bar more than the most affordable dealers. Therefore, take your time to compare prices before buying gold.
You can compare the gold prices of various US dealers on the online platform Gold.com.
Purchase Gold Only from Reputable Dealers
Unfortunately, there are dishonest gold dealers who may try to deceive you with counterfeit gold. To avoid purchasing “fool’s gold,” it is generally advisable not to buy gold online, as numerous scammers operate on the World Wide Web. If you intend to buy gold from an individual, it is recommended to seek the advice of an independent expert. Some US banks and dealers, such as Degussa, offer gold for sale. However, be sure to compare gold prices beforehand.
Buy Gold in Bulk
As a rule of thumb, purchasing larger quantities of gold at once costs less than buying an equivalent amount of gold coins or small bars. This is due to the minting and trading fees, which are proportionally higher for smaller gold units than for larger ones.
Here’s an example: In June 2023, a 1-gram gold bar cost $68 from a gold dealer. On the same day, the same dealer sold a 1-kilogram gold bar for $57,569. If you had bought 1,000 1-gram gold bars at these prices, you would have paid $68,000 for them—over $10,000 more than for the kilo-bar (prices according to Gold.com).
Avoid Investing in Collector Coins
Keep in mind that collector coins come with additional costs for minting and their collector or sentimental value. In general, gold bars are valued solely based on their weight in gold. If you are not a collector, it is advisable to stick to simple, non-exclusive gold bars with the lowest possible premium over the gold price.
