Buy gold and silver: 3 things you should know
So you are ready to buy gold and silver! You’ve seen a ton of commercials on television highlighting the importance of physically owning your precious metals, and you’ve heard the myriad reasons why you should own them. You’ve made the decision … you’re ready to start shopping! Now what?
Do you know how to guarantee a safe and reliable purchase? I’m going to make this really easy and simple for you. There are three things you really need to know to buy your gold and silver the right way and with confidence. You want to buy with confidence, right? Well, here are three essential things you need to know.
- Authentication: You need to know how to authenticate, so you know it’s real. It would really be a shame if he finally went out and bought some bullion, only to find out later that they weren’t even real. To avoid this mistake, you need to know how to authenticate your purchases before purchasing. The topic can be deepened and it is unrealistic to go into the pros and cons of the various authentication methods here, but I want to briefly share what those methods are so that you know your options. There are three ways you can prove the authenticity of your bullion … those methods are chemical proofs, electronic proofs, and physical proofs. The testing methods you choose will be based on the types of purchases you make, the volume of your purchases, and your budget for testing (in particular, some of the electronic testers can be expensive). Chemical and electronic testers are pretty much what you would expect. Physical testing includes testing the weight, size, and sound (yes, the sound) of the ingots you are testing.
- Valuation: You need to know how to determine the value in order not to overpay. To determine the value, you must know the weight, the purity, and the trade price (known as the spot price). Weight is straightforward and is a measure of the weight of a given piece of bullion. But weight is only part of the equation … we also need to know which part of the part is pure. For example, if a piece of silver bullion is 50% pure, the silver content would be 50% by weight. Once you know how much silver (by weight) is in the piece, you can easily calculate the value using the spot price. Please note that commercial prices vary slightly based on the premiums charged by distributors. I can’t stress enough how important your ability to determine value is so that you can make smart buying (and selling) decisions.
- Strategy: You need to understand your own strategy, essentially the real reason you are buying these precious metals in the first place. This is more important than you may initially think because it will help you choose the correct ingot. Bullion comes in many different sizes, shapes, and values, and you will need to make purchasing decisions based on your goals. Your options may differ if you are buying to protect your wealth, or if you are buying to protect against currency fluctuation, or if you are buying to prepare for an economic collapse. Whatever your reasons, you need to know why in order to make the right decisions. And here’s a bonus tip: you’ll need a storage strategy, too.
Buying gold and silver is easier than you think, but one mistake can cost you a lot. After all, precious metals are valuable and your purchases can (and should) add up. I hope this article has been helpful to you on your journey.
