Gold has come to play an integral role in world markets ever since eye-catching, shimmery speckles of the precious metal gleamed from the rivers of Eastern Europe around 4000 BC. The malleable substance has evolved from its initial purpose as a way to finesse decorative objects and stretched into not only a form of currency over the past 2500 years, but as a hedge against inflation during turbulent economic times.
Of the various forms gold can be acquired, bullion is one of the most iconic images associated with this commodity. Let’s take a look at what exactly bullion is, why investors use it to diversify their portfolios and how you can purchase this precious metal.
What is Gold Bullion?
Gold bullion is primarily a monetary asset that is not required to be issued by a central bank or national treasury. It is defined by its purity, its refining process and its contrast to other forms of the commodity such as jewelry or collectible coins. It can come in the form of bars, ingots, or coins. To be considered bullion, it must have a purity of at least 99.5% and can reach up to 99.99%.
Before forging bullion ingots or coins, mining companies must discover gold ore deposits and extract it from the earth. Once removed, the gold ore is then processed through a combination of methods involving chemicals or extreme heat until only pure bullion remains. So, how can you get your hands on some gold bars, ingots, or coins?
How Do I Buy Gold Bullion?
The idea of holding physical gold in the palm of your hand transcends borders, governments, and many other valued market commodities. There are several ways for investors to purchase gold bullion. We’ll take a look at how you can add this long-sought-after treasure to your portfolio and some potential drawbacks associated with buying gold bullion in its various forms.
- Bars and ingots. Both of these bullion forms usually come in an oblong shape. Ingots are named in reference to their metal casting; in this case, the bullion usually has the shape of the original ingot cast. Bars on the other hand are defined by their mass and identified by the purity mark found on the material.
- Coins. Bullion coins are strictly for investment purposes; not for use as general currency. They can be easier to collect and store compared to bars and ingots. Gold bullion coins can be differentiated from collectible coins based on their purpose and appearance. The inherent value of collectible coins hinges on aspects like rarity and purity related to their historical and cultural significance. Bullion coins on the other hand are regulated by government-imposed standards to guarantee authenticity and that metal composition purity requirements are met.
Investing in gold in its physical form also means having to protect your gold. The need to safeguard and insure gold bullion must be taken into consideration before a purchase is made. For smaller collections, home storage solutions may provide adequate protection and fast, easy access to your asset. For larger amounts, you’ll want to consider storage in a secure vault either with a bank or third-party vault custodian.
Also be aware that if you plan to turn gold for a profit and not just using it as a store of value, you’ll be fully reliant on its price rising. This is in comparison to mining companies that can increase gold production to drive profits. Gold is not as liquid as some other market commodities and assets, so you’ll need to keep that in mind if being able to make money quickly matters to you as an investor. Otherwise, you may find that you have to settle for less regarding your gold holdings compared to what they might fetch on the national market.
Gold bullion can be purchased through a reputable local or online dealer, pawnshop, or collector. Before dealing with anyone, in person or online, be sure to take note of gold’s spot price- its current valued price on the market it is valued at on the market- to make sure you’re getting a fair deal.
The good news for investors is that gold bullion isn’t the only store of value related to this commodity. Other options which don’t have the same inconveniencies associated with the physical form of this precious metal commodity are available, like gold futures, ETFs, mining stocks, ETFs that own mining stocks, jewelry, and collectible coins.
Gold in all of its forms still comes with certain risks, so be sure to do your research and decide which investment form you can best leverage to put yourself in a better position financially.
Why Buy Gold Bullion?
Investing in gold can serve as a more steadfast investment compared to more traditional securities like stocks and bonds, which can fluctuate in alignment with market turmoil. As a store of value, it can act as an anchor through the storm as opposed to being used as an ore to steer your investment vehicle towards greater cash flow. With the rising tide of inflation resulting as an aftershock in response to federal stimulatory initiatives and historically low interest rates, gold bullion can act as a levy to hedge against that inflation.
Why Buy Your Gold Bullion Through the U.S. Gold Bureau?
As leaders in the Precious Metal Industry, we make it our mission to bring trust and integrity to all aspects of the precious metals acquisition process. Since 2003, we have continually raised the bar on what our customers grow to expect from their investing experience. Each of our Precious Metals Specialists has been through an extensive training program and is well equipped to assist you at all stages of the process.
We offer a selection of the highest-quality investment grade and bullion precious metals products. As bulk purchasers of coins and bullion from the U.S. Mint, we can guarantee the origin, authenticity, purity, and quality of every product we offer. We are compliant with the rules and regulations of the Federal Trade Commission, as well as the top associations and governing bodies of the precious metals industry.