You have decided to invest part of your assets in gold. What are your options and what do you have to pay attention to? I want to help you with this handy and practical checklist.
You see your savings less and less at the bank and you are looking for an alternative. Or you no longer fully rely on our current banking system and economy. Whatever your reason, you want to at least become the owner of a piece of gold in physical form.
The word “physical,” is very important here. This checklist only applies to people who want to buy physical gold. Do you want to buy gold on paper using digital derivatives? Then you are here at the wrong address. This is written for people who really want to have a piece of gold in their own hands.
That is something most people do not do every day. This makes it useful to build up good knowledge first. There are different options with their own advantages and disadvantages.
In this checklist, I will discuss the various forms and the advantages and disadvantages of each form. In addition, gold falls in a separate VAT rate (0%) and I will explain some about the actual purchase. I also give you some tips and advice that you should pay attention to.
1. There are roughly 2 different forms in which you can buy physical gold: coins & bars
Gold bars are “blocks” of pure gold produced by smelters. They have certain quality marks and often there is some information. With gold bars, it is also important to know what LBMA is, more about that later.
In golden coins, we can actually distinguish two different forms. These are the golden coins that were formerly often used as legal tender in a country and also the gold bullion coins.
2. Properties/characteristics gold bar
A gold bar contains in most cases the following characteristics:
Producer name
Logo producer
The fineness of the gold, often 9999, 999, 999.9, 999.5
Weight (not always with older ones)
An appointment that it is gold (with older ones not always)
3. Standard weights of golden bars
Gold bars are available from 1 gram! And they run up to 12.5 kilos! The most traded gold bars are 10 grams, 20 grams, 1 ounce, 50 grams and 100 grams. There are the following standard weights for gold worldwide:
1 gram
2.5 grams
5 grams
10 grams
20 grams
1 ounce (31.103 grams)
50 grams
100 grams
250 grams
500 grams
1,000 grams
5. The authenticity of gold bars
How do I know that the gold bars that I buy are real? A very legitimate question, it is often a lot of money. For starters, you can assume that gold bars that you buy from reputable traders/sellers are always good. When you buy something via the marketplace, eBay, etc. from private individuals, you can test the following things to see if the gold is real:
Gold is not magnetic, go with a magnet over the bar. Is it magnetic then it is not gold? However, that does not mean that he is automatically good. Not all metals are magnetic.
By calculating the density you can find out whether the bar is real. For this, you have to weigh it on a precision scale and write down the weight. Then you put a bowl of water on the scale, set the scale to 0. Then you have to weigh the goldfish “floating” in the water. You can let it float in the water by means of rubber bands or strings. Write down this weight, divide the “dry” weight by the “wet” weight. If all goes well, you should end up at 19.3 which is the density of gold. If the outcome is far away, it is not gold.
Test the gold using the touchstone method.
Check all the stamps etc.
When in doubt, it is best to purchase from a trader who knows about it and has the gold tested.
6. Certificate of authenticity
How is that exactly with a certificate that is available with a gold bar? Although it is fun and gives the buyer some extra security, a certificate is certainly no guarantee of the authenticity of a gold bar. A certificate of authenticity is in fact very easy to make.
If you want to sell your gold bar to a merchant or buyer, it will never only sail blindly on a certificate, but submit the bar itself to a thorough analysis.
For you as a buyer, that is also the case in principle, it is nice that it is there and can give a bit more security. But a certificate is certainly not sacred.
7. Gold coins
In addition to giving birth, gold coins are the second option that you have to purchase physical gold. Before to buy the gold coin you should ensure about gold coins price and always purchase from a reliable person or store. As already mentioned above, two forms can actually be distinguished here. The gold coins that once in a country really as legal tender and that often paid for.
And the gold bullion coins. I will first give information about one person and then about the other. Then you know exactly what the difference is between the two.
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