Best Ways to Buy Gold, Silver, and Platinum

Jan 11, 2010

There are so many different kinds of gold coins and even different grades in bullion bars, so these innumerable choices overwhelm the first-time buyer of gold and platinum. So I will make this easier for you as I have bought all 3 different metals myself. The best and cheapest ways to buy gold, silver, and platinum are in the following order:

  1. Precious Metal Bullion bars - I like buying gold and silver and platinum in bullion bars because you pay the least premium over the spot price of gold, silver, and platinum. Buy .999+ grade pure metal.
  2. Gold coins, Silver coins, Platinum coins or bullion coins - Not my favorite since you pay a hefty premium over the spot price of gold, silver, and platinum. If you must buy them, then get S. African Krugerrand and American Eagle gold coins as they are the most common and therefore, the most tradable.
  3. Gold mining stocks - this is not the same as buying physical gold since these stocks are like investing companies. Their prices in the long term go up when there is growth potential because their profits are expected to go up due to a sustained increase in demand for gold (as opposed to dollar depreciation), which is not what is happening now.
  4. GLD, SLV, PPLT ETFs - buying precious metal ETFs like GLD, SLV, and the new PPLT is not a great idea for the long term because these popular ETFs are simply just pieces of paper and not 100% backed by physical metal, and hence, not 100% guaranteed to be redeemable (i.e. worthless) when the time comes for you to sell them.

You can store the precious metal bullion bars yourself, at a vault through the online gold dealer from whom you bought your precious metal without ever seeing your hard assets (just as you often never see the cash stored at your bank), or at a bank safe deposit box. Don't store your them at places like Public Storage (no offense) because they may get stolen by unethical employees and end up on Craigslist!

Buying Gold & Silver & Platinum Bullion Bars

[gold bars]

I like Gold Bullion Bars over 1 oz & Silver Bullion bars over 10oz and platinum bars because you get more bang for the buck than precious metal coins as precious metal bullions are heavier so the premium dealers charge is not as hefty. I would then store the gold bullion overseas in Switzerland (BullionVault has this option) in case the government confisticates gold. This has happened before in the US!

>> Read More about Confistication of Gold

>> Where to Buy Gold, Silver, Platinum bullion bars online

You can buy more silver for the same price as gold, so it's a good idea to have silver stored directly by the online dealer you buy from than to have the silver bullion delivered to you and storing them yourself.

You can store platinum bars in your home. If you’re nervous about robbers or fire and you want your precious metals to be near you for easy access, then you can buy a deposit box at your local bank. Banks like Bank of America and Wells Fargo charge a small annual fee of around $40 for this service. You can get deposit boxes at both banks to be safe! You have to have accounts at both but it's not that hard to open an account. Make sure you get insurance as there’s a possibility that unscrupulous bank employees or robbers may steal your valuables.

You can buy gold & silver bullion & platinum bars from any of numerous reputable online precious metals dealers

Buying Gold and Silver and Platinum coins

I wouldn't buy precious metal coins as an alternative to holding dollars because you have to pay a huge premium over the spot gold price - anywhere from 5-45%. For example, if you buy only 1 roll of 25 $1 coin rolls from US Mint, you pay a 45% premium over the spot price, PLUS shipping! Talk about a rip off. If you also buy coins from the government mints, there is also the risk of confistication by the government in times of a crisis. (Yes, this has happened during the Great Depression!)

>> Read more about Confistication of Gold and how you can protect yourself from this possibility

But if you must buy gold coins for immediate accessibility and put them in your home, then buy the cheapest and popular kind, like the South African Krugerrand and American Gold Eagles. There are many kinds of gold coins to overwhelm you, but unless you collect coins, premiums you pay for the different gold coins is not worth it.

You can buy gold coins from:

  • your local gold dealer
  • any of numerous online gold dealers
  • your government Mint - US Mint, Australian Perth Mint, and Royal Canadian Mint. You can't go wrong with them because they're official minters of gold coins. However, they charge high premiums, which makes me wonder if they're non-profit government institutions.

[gold coins]

Buying Gold stocks

You can buy "gold stocks" by buying gold mining stocks like Barrick (ABX), Newmont (NEM), and AngloGold (AU). Their profits go up when the demand (and hence, the price) for gold goes up. Keep in mind that just because the dollar value of gold goes up doesn't mean that the demand for gold has gone up. It can simply mean that the dollar has depreciated against other currencies.

Owning these gold mining stocks is NOT the same as owning physical gold as these gold mining companies operate like companies, so the relationship between owning physical gold and owning these stocks is weak. You're buying companies, not gold.

If you still must buy them, make sure that you buy these stocks when they're relatively cheap (Ideally a P/E ratio of less than 25 for these types of stocks). It's not just what you buy that matters, but also at what PRICE. Right now these stocks are overpriced because of a bubble in gold and other precious metals.

Gold Scams

Don't listen to TV ads, magazine ads, or visit a booth at the mall to buy or sell gold because they are mostly scams! Go to your local dealer or buy or sell your precious metal through any of these reputable online gold, silver, platinum dealers.
If you have a story to share, please share your gold scam story in our precious metal forum so that other people can benefit from your experience!

Third-party storage for Gold & Silver

A few online dealers like BullionVault offer storage services for your gold & silver bullion for a nominal fee. I like BullionVault because you can store your precious metals overseas in Switzerland, as well as in New York and London. Other dealers, like, also offer storage services.

You can also get a safe deposit box at your local bank branch like Wells Fargo and Bank of America to store your precious metals yourself.