How to buy gold bullion and the different investment considerations

Before you consider how to buy gold bullion you really need to define for what purpose you intend your purchase to be for. There are several different ways to buy gold bullion ranging from the physical metal itself to exchange traded funds that trade on the stock exchange. This article will examine the different options to give you some initial insight on how to purchase gold bullion so that you will feel more comfortable with your selected purchase.

If you are merely trying to gain exposure to a rise in the price of gold in the short term, then futures and gold exchange traded funds may be more suited to your objectives. Both trade on exchanges. The futures require margin and are highly leveraged but suitable for capturing short term moves. Futures on gold are generally for the sophisticated investor who understands risk management. You will need an account with a broker to invest in futures or exchange traded funds.

Exchange traded funds come in an assortment of different types. The SPDR Gold Shares (GLD) is a trust structured to own the physical bullion. The Powershares DB Gold (DGL) owns futures but also derives a yield. The Market Vectors Gold Miners ETF (GDX) owns common stocks and depository receipts. There are subtle differences in each vehicle. The trust runs on minimal expenses and is a pure play on the price of bullion. The Powershares ETF provides a yield for investors which may be an added incentive. The Market Vectors gold ETF comprises a basket of stocks which makes it diversified in terms of its exposure but with additional potential for appreciation through any one of the stocks making additional gold discoveries. Each of the gold ETF’s are for individuals wanting gold exposure without owning the physical asset.

If you are looking to own the physical version of gold then bullion or coins would suit your purpose. Each of these can be purchased through authorized dealers or a regional mint. In some cases, you can buy gold bullion online through the retail arm of various mints or through specialized companies that specifically deal in the sale of gold bullion. Rare coins and limited edition coins are also suitable for the serious collector.

Coins are suited to investors who want gold as either an investment or safe haven that is easily stored or transported. The gold bullion alternatives are bars or ingots. They are purchased through an authorized dealer, a mint or commercial organization that specializes in bullion sales. There are usually storage costs that need to be factored into the contract. This can be a safe way to invest and store large amounts of gold with the added ability to buy and sell further quantities at prevailing market prices.

Want to find out how to buy, trade and store gold bullion online safely and securely?