What Is the Cheapest Way to Buy Physical Gold?

Gold has always been a preferred asset for investors seeking portfolio diversification and a hedge against inflation. Indeed, considered a “safe haven” in times of economic uncertainty, gold has been and will continue to be an attractive investment opportunity.

But as a savvy investor, you already know that. What you’re here for is to learn how to buy gold cheaply and how to maximize your potential returns on investment.

When it comes to that, investors have several options to buy physical gold affordably. But what is the cheapest way to buy physical gold? Let’s find out.

How to Buy Gold Cheap?

For gold investments to have financial sense, you must buy physical gold at the lowest prices possible. You have several opportunities here, although the most financially-efficient ones are the following:

Buy Gold in Bulk

Ever heard of economies of scale? We assume you have. The good news here is that its rules apply to buying gold.

Essentially, by buying gold in bulk from one dealer, you spread fixed-cost items across more units, decreasing the premium you pay per unit. When purchasing gold, these costs include shipping, administrative fees, insurance, packaging, and storage.

Furthermore, most gold dealers and gold IRA companies have discounts and special offers for investors who buy physical gold in bulk. If you play your cards right, you may save a lot of money on your gold purchases.

Purchase from Gold Traders

Although buying gold from licensed dealers is the safest method as you can avoid potential scams, purchasing gold in peer-to-peer trades via online marketplaces or apps might be the cheapest way to buy gold there is.

The advantage here is that such marketplaces operate on buyers competing on price. That means sellers can’t sell physical gold bullion coins and bars at prices exceeding their numismatic value or accepted premiums.

This means you can find and buy gold at prices often below its market value. On the other hand, it requires much more research and caution.

Buy from Jewelers

Another way to save some money on gold is to buy gold jewelry. Since gold jewelry is usually made with a blend of other metals, it affects such items’ price, often much lower than bullion coins and bars. The gold item’s value will also depend on the brand and design.

Also, if you go that way, only buy from jewelers licensed by the Jewelers of America association. That way, you can rest assured that the gold jewelry you purchase is truly made of gold and priced fairly.

What Is the Cheapest Gold: Coins vs. Bars

Physical gold is available in two primary forms – gold bars and bullion coins.

Gold bars contain the highest amount of gold and are available in various weights and sizes. You can buy gold bars from licensed gold dealers, such as precious metal vendors, IRA companies, and gold mints.

Gold bullion coins, on the other hand, also take their value from traditional and historical significance. They are also available through gold peer-to-peer marketplaces in addition to mints and gold vendors.

Which one makes more financial sense to buy? It depends, although gold bars generally cost less per ounce than bullion coins.

Buying gold bars usually includes a lower premium over spot prices, as their production cost is relatively low compared to bullion coins. The gold bar’s value will also solely depend on its weight rather than the rarity and the grade.

Furthermore, bars are easier to produce and store in larger quantities, further decreasing their overall costs when buying in bulk.

That said, when buying in small quantities, a gold coin might be cheaper than purchasing a gold bar. However, when buying gold in bulk, the cheapest way to buy gold is by purchasing gold bars.

Alternatives to Buying Physical Gold Cheap

While owning physical gold is an exciting prospect, it also has several disadvantages.

For instance, if you buy gold bars or bullion coins, you must consider shipping, insurance, and storage costs, which can often be high. Some traders may also charge markups and other additional fees.

If you want to avoid such costs or if your investment capital is too low to invest in physical gold, you can consider other gold investment options, such as:

• Gold IRAs. A gold IRA is a self-directed individual retirement account that allows you to invest in physical gold or other gold investment assets (Roth Gold IRA). Gold IRAs offer tax benefits and are managed by professional custodians who provide storage, shipping, and insurance services.
• Gold ETFs. Buying a gold ETF looks similar to purchasing a company stock. Essentially, you don’t buy physical gold but an exchange-traded fund (ETF) that tracks the price of gold. It allows investors to own assets without paying storage or insurance fees. They may, however, include commission fees or administration fees.
• Mining stocks. Many gold investors buy gold mining companies’ stocks, which often offer even higher potential returns than gold ETFs or physical gold, as they don’t solely depend on gold price fluctuations but also on other factors, such as performance and brand. These, however, make mining stocks much riskier.
• Gold futures. Gold futures contracts allow investors to hedge against future gold price swings. In simple terms, you buy or sell a contract to buy gold at a specific future price. The financial barrier here is relatively low, and with high leverage, such contracts offer incredibly high potential returns. However, they are also riskier and require deep market and brokerage knowledge.

Things to Consider When Buying Gold

If you want to get the most out of your gold investment and buy gold as affordably as possible, consider the following factors when making your purchases:

• Market timing. Although gold isn’t as volatile as some other assets, its price tends to fluctuate, too. For instance, during times of economic uncertainty, gold’s value usually rises (e.g., during a stock market downturn). To buy cheap gold, opt to make your move when the market is at its peak.
• Investing goals. Your investing goals will affect how much gold you want to buy and how much you’re willing to spend on your investment. It will also determine the type of gold asset you should buy, be it physical gold, gold IRA, or ETFs.
• Gold quality. Always ensure the gold you buy is of the highest quality, especially when buying from online traders. Most gold bars, for example, are at least 99.5% pure gold. They also come with identification markings proving their quality.
• Storage. When buying physical gold, you need to store it in a secure space. Most IRA companies and reputable dealers offer storage services, which come with additional storage fees. There’s also the case of insuring your gold assets, which is another ongoing expense to keep in mind when buying physical gold.

Key Takeaways

Buying gold cheap is possible. However, as explained, it requires some research. Still, with the knowledge you have now, you shouldn’t find it too difficult to find the cheapest gold-buying opportunities.

Take what you’ve learned today, explore your options, and diversify your investment portfolio with affordable gold purchases. Be only sure to buy gold from reliable and licensed online gold dealers and IRA companies.

For more tips and information about gold and precious metals IRA investing, refer to our knowledge base or sign up for our free gold IRA guide.

As experts in precious metals IRA investments, Gold IRA Blueprint has provided investors with quality advice for years. If there’s an online advisor you can trust when it comes to gold IRAs, it’s us.

Article Sources

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1. https://www.forbes.com/advisor/investing/how-to-buy-gold/
2. https://www.investopedia.com/articles/basics/08/gold-strategies.asp
3. https://money.com/how-to-buy-gold/