The best type of gold to buy is not a static answer. One buyer will likely find that a certain form of gold will be better for their long term interests than another.
For example, a collector is not going to shop for bars, whereas an investor is not likely to seek out rare coins from hundreds of years ago. It comes down to considering the reason why you are buying the gold before you buy it.
You should always have an exact reason for any purchase you are making with precious metals. After all, you are probably going to end up spending a significant amount of money, so you want to always be as careful and precautious as possible.
The first thing any new gold buyer needs to understand is how to differentiate between the benefits of and differences between the multiple types of gold that are available. Gold bars are simply pure gold. Gold coins are limited in production and will have added value beyond their actual worth in gold alone. Rare gold coins will have even more value that exceeds the worth in gold content.
With those factors in mind, you then need to decide whether you are hedging on gold as a protection of wealth, a simple investment in the commodity element, or an investment in the collectibles of an item. Each of these three ways to get into gold is outlined and explained in detail below.
Best Types of Gold Bars
Gold bars are the most ideal purchasing decision for the buyer who is looking to protect their money and/or ensure that their net worth in common currency is not artificially devalued. While normal investors will also put their money into gold bars, and actually do so quite regularly, this is the ideal form of gold for the person who wants to make sure that their USD or Euro, etc. money is not devalued.
There are many, many different sizes, types, and brands of gold bars available on the secondary market. The sizes for gold bars typically start off at just 1 gram, with other sizes being available in 1 gram intervals up to 1 ounce, and then 1 ounce intervals from there on out.
If you are working with a small budget or simply want to test the waters in gold, buying gram bars may very well be your best bet. You will be able to get some real, physical gold in your hands, and you will become familiar with the process of buying gold. If you have a bit more money to spend, 1 ounce bars are definitely the ideal choice.
While 10 oz. and even larger bars are available, they do have some minor drawbacks. One of the reasons why these aren’t best is for the purpose of re-selling. Selling 1 oz. bars is much easier and convenient for the majority of people.
You can get cash in hand the same day you decide to sell, whereas moving 10 oz. of gold could prove to be more of a challenge. Plus, if you want to just sell a few oz. but only have 10 oz. bars, you won’t have much recourse other than to sell it all and buy some back, which in turn costs you more money in the end.
The brand of gold bar that you buy is not going to bear a whole lot of relevance. There are many different mints that produce gold bullion, and determining which one is the “best” isn’t much more than a trivial debate.
Instead, buy the one that costs you the least amount over spot. Sure, some bars might appear more aesthetically pleasing, but this is not going to make a difference in the end. If you do have the choice between an off brand gold bar and one manufactured by a prominent mint, however, there is no reason not to go after the big brand.
Best Types of Gold Coins for Investors
The type of gold coin that is best for investors is an argument that has a few sides, with neither being necessarily right or wrong. If you decide to shop for standard uncalculated coins, you will have the lowest output of money, giving yourself the best opportunity to turn a profit based on gold’s value.
If you buy rare and/or graded coins with much higher fair market values, you are going to need to ride the highs and lows of the collectible coin market. You have to decide whether you are betting on the value of gold, the collectible value of the coin, or both.
Though there is no definitive best type of gold coin to buy for investment purposes, the majority of investors would agree that buying common, uncalculated coins is the most optimal route to take.
These coins can be obtained with lower premiums when you buy in bulk, their value is not likely to decrease more than what you initially spent on them, and they only carry upside as the years go by.
The most critical element to saving money when buying gold coins is to order in bulk. One coin or a handful of coins is going to cost you the same, but if you buy tubes or monster boxes, you will all but certainly garner a discount on the final order price.
Always look for a way to cut down on the amount that you have to pay over spot. If possible, try to negotiate with the gold dealer to see if they will give you an even further discount. Since a cut of the mark up on these items is set by the dealers themselves, they will have some room to negotiate.
Best Types of Gold Coins for Collectors
For collectors, personal preference is truly everything. You shouldn’t make purchasing decisions for your collection based on someone else’s opinions.
The value in collecting coins is the fact that you get to decide what you want to buy. With that said, there are going to be financial implications to any coins that you end up adding to your collection.
The best types of coins for new collectors are the basis coins that are released in mass quantities on an annual basis. For example, the American Eagle or Canadian Maple Leaf would be great starting points for any new collection. They do not cost a lot over spot, they are easy to find, and they are desirable.
Once you become more familiar with the numismatic world of gold coins, you will probably be more interest in things like graded coins, proof coins, rare coins, errors, and so on and so forth. Proof coins are the higher end version of standard issue coins, graded coins base their value on the relative condition of the coin, and rare coins are self descriptive.
As a general rule of thumb, proofs will be the most affordable and obtainable and serve as a stepping stone after normal coins, with graded and rare coins following after on the cost scale. No matter what you end up buying as a collector, you will find it tough to go wrong. So long as you are getting the best price on any coin that you buy, there is not much else that you need to worry about.