Guide to Buying and Selling Bullion: Tips and Strategies

In the ever-changing financial market, mutual funds, stocks, and bonds are becoming popular investment options. Among all of these, gold investing has stood out every time because of its significance of security and reliability.

Gold has been seen as a common investment and a way to secure finances for many years. People see gold as a way to diversify their investments and as a physical asset because of the growth of the financial market. Investors can look for low fees and taxes, investment amount and flexibility, and good returns without sacrificing liquidity for a gold investment plan.

Gold can be put resources into different structures, including gems, computerized gold, sovereign securities, gold shared assets, and gold ETFs. However, physical bullion—gold bars or coins—is the easiest and most secure way to invest in gold. Therefore, we discuss gold bullion and tips and strategies for investing in gold bullion in this blog.

Why invest in Gold bullion?

1. Stable & Secure Investment

You may know Investing in gold bullion is a secure choice. Unlike other investments, gold holds its value well, serving as a reliable protection against economic uncertainties and rising prices. By setting aside a portion of your earnings for gold bullion, you can create a secure, universally recognized, and easy-to-store asset portfolio.

2. Highly Liquid Investment 

Gold is highly liquid, meaning you can easily convert your gold bullion into cash whenever you need it. Compared to other investments such as real estate or certain types of bonds, gold can be sold quickly during financial crises without the usual long waiting periods.

3. No need for Extensive Knowledge

Investing in gold bullion doesn't require a deep understanding of the market, making it suitable for both beginners and professional investors.

4. Emotionally Valuable

Gold holds great emotional and cultural value for people. It’s often used in important life occasions such as weddings or handed down as a family heirloom. This viewpoint brings a personal touch to your investment portfolio and turns it into more than just a financial asset.

Now you can assess the importance of investing in gold bullion. Therefore, we discuss ahead strategies and tips for gold bullion investment.

Strategies to invest in Gold Bullion

1. Begin with small investments and gradually increase

If you’re a beginner as a gold bullion investor, a successful approach could be commencing with small investments and gradually increasing them over time for you. With the dollar-cost averaging technique, you can distribute your purchases across different market conditions, reducing the chances of a costly purchase during a price peak. In the long run, these small accumulations can give you substantial returns.

2. Explore different types of gold investments

You can begin with physical gold bullion, but consider diversifying within the gold market. You could begin with coins, which are easier to trade, and then progress to larger bars as your investment grows. Diversifying your gold assets can provide you with more options when it comes to selling and managing them.

3. Stay updated on market trends

Having extensive market knowledge is not necessary for investing in gold, but staying informed about market patterns can assist you in making informed choices. Therefore, Continuously monitor gold prices, along with global economic indicators such as inflation rates and geopolitical events that may impact the value of gold.

4. Be aware of the implications for taxes

Understand the tax implications when dealing with gold. Taxes on precious metals can vary and affect your investment returns. Consult with a tax expert to plan your investment strategy accordingly.

5. Flexible and versatile investment approach

Investing in gold bullion is a proven and adaptable strategy that offers simplicity, liquidity, and security. Start small, diversify your assets, stay informed, and manage your investments wisely to maximize the benefits of this valuable resource. Whether you aim to safeguard wealth for future generations, prepare for significant life events, or ensure financial stability, gold bullion is a reliable and flexible addition to your investment portfolio.

Tips for Investing Gold Bullion

1. Buy Real Gold and Silver

It is crucial for anyone investing in gold and silver to recognize that their primary purpose is as a form of currency. Gold has been used as money since 5000 B.C. The transition to the fiat system, where paper money is not backed by gold, only began in 1971 when Nixon abandoned the gold standard. 

Before that, gold served as the support for all paper money. The gold industry and investors extensively discuss the manipulation of gold prices and its impact on the price of gold. Paper gold refers to future contracts or electronically traded ETFs that track the gold price. While banks may offer you gold, it is important to understand that you are not purchasing physical gold but rather an investment product that follows its price. 

The choice of precious metal to purchase depends on your investment goals. Paper gold may be suitable for short-term trading, but it exposes you to counterparty risk and relies on government control. When it comes time to claim your share, you may discover that there is insufficient money available. That is why you should always approach buying real gold and silver.

2. Make sure you have full control over your gold right away

It's essential to own physical gold in a place with strong property rights like Switzerland, Liechtenstein, or Singapore. Avoid buying unallocated gold or from enterprises that don't give you physical gold. Ensure that the gold you buy is directly yours and cannot be pledged, hedged, or leased by the firm. Therefore, look for products from the London Bullion Market Association (LBMA). 

3. Opt for Gold Coins and Gold Bars with the Highest Liquidity

Aim to get the most pure gold for your money. Invest in coins that are considered legal tender, such as the Maple Leaf, Austrian Philharmonic, or Australian Nugget. The price of a gram of gold should closely match the gold spot price when you make a purchase. Check prices on financial websites. 

Stick to reputable dealers like Shree Ambica Touch which offers fair prices. Be aware of fake jewelry stores or fraud online retailers that may overcharge. Focus on security and building a long-term relationship with a trustworthy business. Avoid numismatic coins unless you fully understand the industry.

4. Make use of liquid gold stocks

Utilize liquid gold stocks for financial security and long-term wealth accumulation. Gold has consistently shown its liquidity and value over time, with its price increasing by over 5,000 percent since the 1970s. Despite occasional drops, gold's worth has consistently risen, especially during times of economic uncertainty like various oil crises and the pandemic in 2020. This demonstrates that investors and governments turn to gold during tough times.

Instead of viewing gold as a short-term trading tool, consider it as a long-term insurance policy. In times of crisis, having access to liquid gold is crucial. Note that silver can be used for smaller expenses, while gold can be utilized for larger opportunities.

5. Avoid using credit and instead buy with your savings

To invest in gold, it is important to save money beforehand. Saving is the foundation of a strong economy. The current system relies heavily on consumption, credit, and debt, which is not ideal for a thriving economy. To counteract this, purchase gold without resorting to the bad habits that contribute to this system. 

If you choose to buy gold, make sure to use your savings and set them aside exclusively for this purpose. It is advisable not to use credit or engage in speculation when purchasing gold. The market is unpredictable, and you may find yourself having to repay your credit before the price of gold increases.

6. Diversify Your Gold Holdings

Experts suggest having 5 to 15 percent of your portfolio in gold. Depending on your goals, you could invest up to 25% in gold. Owning a second property and picking a secure storage location is crucial for diversifying assets, including gold. It's important to have quick access to your gold in case of an emergency. However, it's wise not to keep all your gold in one place or nearby. 

Your insurance should be held internationally. History shows that gold was confiscated in various countries, so it's essential to protect your assets. Switzerland was the last country to abandon the gold standard, maintaining a currency exchangeable for gold even during wartime. Remember, politicians cannot seize your gold.

7. Place some of your gold in a safe spot

It's recommended to keep a portion of your gold in a secure location where political power is limited. Switzerland, for example, has a decentralized political system with seven presidents, making it a safe country. This means that states and municipalities have more authority to set regulations. In contrast, a centralized system like the United States, with a single president, can make rules without considering the people. In Switzerland, individuals have the final say and seizure is unlikely. This unique system is not common in other countries.

8. Shop without using a banking system

It is advisable to avoid using banks when shopping. The current banking system relies on credit, paper, and digital transactions. Many people are buying gold as a safeguard against the expected financial crisis. 

To protect your investment, it is wise to store physical gold outside the banking system. Banks have previously seized gold and there is always a possibility of a bail-in where all assets could be taken. Safe deposit boxes may not be insured and banks have been known to lack the gold they claim to have during severe crises. 

This issue arose in the 1980s when mathematicians argued that banks didn't need to hold all the gold. As a result, a significant amount of gold vanished from the banking system. In conclusion, it is not recommended to deposit your gold in banks. It's better not to take that risk.

9. Stay Compliant with Regulations When Buying Gold

When the opportunity arises, gold investors should purchase a few coins or bars. If you buy a few coins per year, you can acquire them privately without disclosing personal information. This is completely legal and allows you to maintain your privacy. Buying small amounts at a time can further enhance your security and confidentiality.

Therefore, it is beneficial for regular consumers to make small purchases. However, if you intend to invest in larger quantities of gold, there are specific laws that apply. Make sure to abide by these laws and declare your purchases if required. It is important to have genuine reasons for investing in gold and not to use it as a means to hide something from the government. If you believe in gold as an investment, it is essential to act responsibly and comply with the regulations. 

Once you comply, you can continue to protect your wealth from potential confiscation by following the rules and storing your gold in jurisdictions like Singapore, Switzerland, or Liechtenstein. Particularly under Swiss and Liechtenstein regulations, your gold will be secure.

10. Invest with money that is not needed within the next five years

The value of assets can change unpredictably, as seen during the pandemic. While it is likely that the price of gold will be higher in five years, short-term fluctuations are uncertain. Therefore, avoid using money that you may need within three, six, or nine months. 

Gold has historically appreciated by 10% annually and provides stability and protection against inflation. It performs well compared to the stock market and cash. Rest assured, your investment in gold will likely bring satisfaction in five years, regardless of the circumstances.

Conclusion

Seeing the security, authenticity, and other authorization, you should invest in gold bullion with LBMA-certified gold bullion which can save you time and money when it's time to sell. Make sure to have items tested or analyzed before returning them to the LBMA.

At Shree Ambica Touch, we are a gold bullion platform and also make BIS-certified Gold minted bars and coins. Contact us for your requirements for gold coins and gold bars.