Beware: there is no such thing as buying cheap gold online!
Buying gold online can be very tricky. Anyone who wants to purchase gold coins, bullion or raw gold (dust or nuggets) must be very cautious. First, gold has been the center of scams for about, oh, forever. The second difficulty is the Internet itself: Some people offering to sell things online are… dishonest. And with the popularity of gold as an investment growing each day, potential for fraud is high. There is no such thing as cheap gold.
Buying Cheap Gold Online Equals Scam
Yet, it is possible to buy gold online if you take a few simple precautions. There is also a trade-off that buyers have to make: The degree of safety (that is, assessing the likelihood that the gold being purchased online is actually as it is being represented) and the price are often inversely related. That is, if you want to be 99% certain that gold you are buying online is in the form and purity that the seller claims, then you will probably not get a low price. Keep in mind the old, old, very old warning: If it seems too good to be true, it probably is.
That being said, here are a few places, and types of places, to look for online sources of gold:
– Buying Gold Coins from the Mints
Some mints produce “collector’s pieces” which carry a high premium over the value of the metal. If you are interested in a set of rounds depicting the birds of southwestern Siberia, this may be for you. If not, there are other mints that are associated with gold mines or mining companies. These are, in effect, the retail outlets for the mines’ output. They sell bullion – ingots or rounds – that have some design, often minimal, but are stamped with the purity (.999 is standard) and the weight. Pay attention to the descriptions! A gram is not an ounce! A “gold-clad” bar is not a gold bar! Advantages: Still a high degree of safety, if you can verify that the mint is established and well-known. Disadvantages: You’re buying online. There is always a risk, until you have the item in your hand and can verify it is as it was described. But with serious Mints such as Royal Mint, Royal Canadian Mint or the United States Mint (to name a few) there is very very few risks.
– Gold brokers
These are companies that offer gold coins and bullion. The coins may be minted by the United States or other nations. Some are modern, others were minted in the 20th, 19th and even the 18th century. Bullion may take the form of bars or rounds (coin-shaped bullion) in various sizes. Some bullion has been “coined,” that is, stamped with a decorative design, but is not issued by a government. The advantage of buying from a broker is that you can have a very high degree of confidence that a well-established broker will deliver exactly what you contracted to buy. The disadvantages are that the broker will be selling at a premium, plus be charging hefty shipping and insurance fees. This is an expensive, but sure, way to buy gold online.
– Coin stores and on-line auctions
Look for well-established companies that have been around for a long time and whose reputation you can verify through third parties (such as the Better Business Bureau). Auction houses do not usually absolutely guarantee the honesty of the sellers, but most do their best to vet their identities and try to weed out scammers. Advantages: High prices, but it is still possible to get fairly good deals. Disadvantage: Some risk.
Good to Know when Buying Gold Coins:
Precious metals are measured in troy weights. A once troy = 31,10359 grams. In short, a troy ounce is about 10% heavier than a “regular” ounce.
Selection of 1oz Gold Coins
Did you know that the South African Krugerrand was the first 1oz investment gold coin, sold originally at a very low premium over its gold value? Many countries now issue these 1oz bullion coins.