Some investors think that they should buy cheap gold, and it is important for savvy investors to understand that the most “gold for the buck” may not be the best “bang for the buck.” Getting the least expensive per-ounce form of gold and sitting on it through thick and thin may initially sound like a rational strategy, but the least expensive gold may hurt you in certain circumstances. Since many of today’s gold investors are relatively new to the market, we might as well spend a couple of minutes discussing ways that you can minimize your costs and maximize your investment’s potential security and growth leverage The following physical possession gold products are the most cost-effective ways to buy physical gold, and each type mentioned below serves a different purpose:
• Gold Bullion Rounds – These generic circular pieces, which are also referred to as planchets or blanks are produced for large-scale gold dealers, wholesalers, and coin minting entities. You can use rounds to mint coins, and you can use rounds as a short-term (21-14 month) investment. You can also melt these items down for other purposes, although these generic pieces carry no face value and are liquid but not legal tender in any country. You can buy gold rounds in 22-karat and 24-karat purity, with the 22-karat variety containing more alloy to produce a more durable coin.
• Gold Bullion Bars – These items are more heavily targeted by investors than rounds, and the costs are still very low over the COMEX gold spot price. Investors can buy cheap gold bars that have been manufactured by companies like PAMP-Suisse and Credit-Suisse, and free delivery of the bars is often available from major gold exchanges.
• Modern-Day Gold Bullion Coins – Gold coins that have been introduced to the gold market by the Royal Canadian Mint, the Perth Mint, and the US Mint over the last 25 years carry relatively low premiums over the active gold spot price, because they carry no premium for rarity or scarcity. Although coins are usually a bit more expensive that the aforementioned gold bullion products, they are very popular with investors who prefer a diversified gold portfolio. These coins vary in face value, size, and weight, although they are impractical to spend because their facevalue is nominal in comparison to their inherent gold content. For example, the modern-day $50 Gold Eagle has a current market value of around $1200, so you wouldn’t want to flip one of these coins to your mechanic for an oil change.
• Uncirculated Mint State 61 Certified Coins – The above-mentioned products are preferable for investow who aim on a 1-14 month holding period, longer-term investors may want to go in another direction. PCGS and NGC-certified MS61 coins are in Uncirculated Mint State condition, and these coins are the most cost effective vehicle to take for a long-term gold investing strategy. While higher Mint State grades have historically been more profitable, the less expensive MS61 grade coins like the $20 Saint Gaudens and the $20 Lady Liberty have performed exceptionally well during this recession, and they have vastly outpaced bullion’s performance for investors for holding periods longer than 14 months.
To learn more about the best ways to buy cheap gold and stay successful in this market, call one of our friendly specialists or register below for our award-winning 2010 Insider’s Guide To Buying Gold below (first come, first served).
Steven Martin
Senior Gold Specialist - Buy-Gold.org
