Overcoming Financial Obstacles to Investing in Gold and Silver

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Overcoming Financial Obstacles to Investing in Gold and Silver

July 9, 2020

Today on the blog, we’re featuring the next installment in our series exploring common reasons investors hesitate to break into or expand within the precious metals market.

So far, we’ve unpacked the top two most frequently cited objections highlighted by recent research: 1) the investor is taking time to consider an investment proposal currently in hand, and 2) the investor is still in the initial research phase of his or her precious metals exploration.

The third most common reason given has to do with the price of gold. Specifically, investors cite objections such as not having "enough" money for gold and wanting to “time the market” by waiting for the price of gold to drop.

Below, we’re teasing out the nuances of these topics and providing what we hope will be helpful insights for anyone else who may be grappling with the same trepidations in their investment journey. Read on to learn more!


Not Enough or No Money for Gold Right Now


A typical charge we hear time and again is that the price of gold is too steep to begin or continue investing, which is subsequently and falsely projected onto the whole precious metals market at large. Many investors, both novice and seasoned, think they don’t have enough cash to start or continue investing in precious metals. While the availability of funds is an important consideration when making any long-term financial decision, precious metals are often more attainable than many people think.


Alternatives to Gold


While the yellow-hued metal has proven itself time and again to be a reliable store of wealth for investors of all backgrounds, acquiring precious metals does not mean having to add only gold coins to your asset portfolio. If you think the price of gold is indeed too high for you right now, there are a variety of other options from which to choose.

The silver market, for example, is a great complement to gold. Silver is often available at lower price points than gold, palladium, and platinum, making breaking into the precious metals sector more attainable for many investors. Silver is also typically regarded as a metal that gives investors a bigger “bang for their buck,” allowing them to accumulate more ounces per dollar than other higher-priced options.

It's essential to keep in mind that lower prices don't mean the investments are necessarily inferior when it comes to shoring up hard-earned wealth. Much like gold, silver has consistently increased in value over the last several years, allowing it to serve in its own right as a reliable hedge against inflation for many investors.

Silver has and continues to be a reliable means of safeguarding wealth for many investors across the country. Read more about the benefits of silver investing here.

Another viable precious metals option is copper. While heavy hitters like gold and silver often overshadow copper, the rusty-hued metal continues to enjoy a strong legacy of broad consumer appeal and widespread industrial utility. As we pointed out in an earlier blog post, spot prices of copper historically ring in at significantly lower levels than those of gold. While this may seem off-putting at first glance, lower spot prices have time and again positioned copper as an attractive alternative for those seeking ways to invest that don’t necessarily require vast amounts of up-front cash. As a result, copper can serve as a viable means of “break[ing] into the market at a lower price point.”

As with silver, lower copper spot prices don’t necessarily mean the metal is doomed to bear low or stagnant returns. Operating on a more economical price scale than gold, for example, allows room for the copper market to realize substantial gains in a relatively short time. As this Investopedia article frames it, “[g]old isn't going to double in value in a month, not from a starting price of over $1,000 an ounce. Copper very well could.”


Bullion Bars and Rounds


While it’s easy to tout the many up-sides of investment-grade Proof coins, it’s prudent to recognize that those coins alone are not the end-all-be-all the precious metals investing.

For those investors looking to capitalize on the viability of precious metals for potentially less up-front cash, bullion products may be a good fit. Bullion is a commodity, and unlike with investment-grade coins whose values are based on qualitative factors such as rarity, quality, and mintage numbers, its value is tied to the gold, silver, and other respective commodities markets.

Bullion is available in various forms, including bars, coins, and rounds, providing investors an array of options to consider. When it comes to bullion bars, investors can choose sizes ranging from one troy ounce – or roughly the size of two thumbtacks stacked on top of each other – to the largest commonly available 1,000-ounce size - which is larger than a standard brick and translates to 62.5 pounds. Investors can acquire bullion bars in the four primary investment metals: gold, silver, platinum, and palladium.

Like bars, bullion coins are struck in a variety of metals and also bear a variety of designs. The U.S. Mint maintains a robust bullion coin program that gives investors of all ilk “a convenient and cost-effective way to add physical gold, silver, platinum, or palladium to their investment portfolios” year after year.

The term “coin” refers to a legal-tender, precious-metal-based piece of money authorized by Congress and issued by the U.S. Mint as part of a country’s official currency. Conversely, precious metal “rounds” are coin-like products that are not “coins” at all. Unlike official U.S. legal tender coins, rounds are not issued by any part of the U.S. government, but rather, are produced by private mints solely for investment purposes. The United States Gold Bureau offers a broad inventory of silver rounds for investors to choose from.


Tailored Investment Packages from the United States Gold Bureau


Regardless of current amounts of cash on hand, there is a multitude of ways investors can begin or continue their precious metals acquisition journeys. At the United States Gold Bureau, we understand that each investor brings a unique set of financial and life circumstances to the table, calling for tailored approaches to investing designed to address and satisfy the needs of each client. We develop custom-designed proposals based on each investor's motivating factors and continue to evolve those strategies throughout the client's time in the precious metals space. Precious metals investing is a long-term approach to financial well-being and should be thought of as a dynamic process that will ebb and flow with the changing tides of life (and fluctuating budgets).

We firmly believe that each investor, regardless of means or experience, deserves the opportunity to establish financial security for years. As a result, we encourage investors with all shapes and sizes of budget to explore the variety of precious metals options available – we’re confident there is an ideal choice out there in your budget!

We talked more about our individual-focused approach to selling gold, silver, and other precious metals in this series's first installment.


Timing the Market


While some investors are scared away from precious metals by the unfortunate perception that they “can’t afford it” or don’t have “enough” money right now, others hesitate to dive in because they want to “time the market” in one way or another – namely, they’re waiting for the price of gold to drop.

While wanting to find the best deal out there is a worthy approach to any financial decision, we at the U.S. Gold Bureau discourage clients from stalling so long that they sacrifice viable investment opportunities for “cheaper” – and often elusive – points of entry.

In February, in a post aptly titled, Timing the market can be a risky waiting game that often fools investors into thinking that the “perfect” price or deal is just around the corner – if they only hold out a little bit longer. But as economies around the world continue to crumble under the pressures of both the COVID-19 crisis and long overdue corrections that were on the horizon anyway, it’s clear that the time is now to diversify your holdings, shore up earnings and safeguard your wealth for the long haul.

As we like to posit, wouldn't you rather be a day early on protecting your assets than a day late?

While investment-grade and bullion gold remain incredibly viable means of hedging against economic turbulence, we hope today’s discussion helped to illuminate some of the different options investors have when it comes to precious metals acquisition.

From silver bars and coins to copper rounds, there is a breadth of options outside of gold for investors to reap the rewards of hard money assets. Whether you’re flush with loads of cash today or are currently looking for a more minimal move, the time is now to evolve your portfolio with precious metals.

Stay tuned for Part 4 of this series coming soon!

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