Factors to Consider When Buying Physical Gold

Posted on August 05, 2022 by BOLD Precious Metals

For centuries, Gold has been the ideal household investment that paves the way to financial security. With time, diversification has widened the portfolio of the metal in terms of investment. Investing in the valuable asset is now not restricted to buying gold ornaments only as the metal is available in various other forms and segments.

The coins and bars of the special metal are nowadays more popular than ever. Moreover, with agendas like the Gold Accumulation Plan, Gold Monetization Scheme, Gold Exchange Traded Funds, and many similar ones drawing the interest of many investors, it is now possible to invest in the asset in so many ways.

But if you are particular about considering all the chief factors before buying any product or service, investing in Precious Metals should not be an exception too. So, here comes the list of factors that you must consider before investing in the valuable metal.

Factor #1: Storage

When you are purchasing any asset, it is essential to know about the additional expenses that come along with the particular asset. In the case of the yellow metal, storage is a crucial factor that you need to plan before getting the asset.

If you are buying golden ornaments, you cannot keep them at home for fear of robberies. Naturally, the most common solution is to get a locker at the bank for storing the jewelry. As you have to pay a considerable charge against the locker facility, you need to calculate whether the asset justifies the charge that you are going to pay off indefinitely.
Even when you buy the bars and coins of the metal, you have to either pay for the locker at the bank or arrange for a high-security safe in your residential or commercial space to store the possessions. Again, the investment for getting such a safe is going to be quite high.

However, if you don’t want to get into the complications involving storage, then you can invest in the different schemes and avoid the physical forms. Ultimately, it is the Gold value that will matter the most.

For the Gold Exchange Traded Funds, you don’t need to pay any storage charge as these will be formats that undergo trading in the stock market.
For the Gold Monetization Schemes, the Government will usually pay you the interest that will cover up the costs of the locker facility.

Whatever your choice, you need to make sure that the Gold is in a safe and protected space, with all arrangements for the storage prepared in advance.

Factor #2: Manufacturer

The manufacturer of the jewelry or bars and coins serves as one of the critical factors that can affect the value of your asset. Transparency is almost a mandatory quality that you should look for in the manufacturer. As you are investing in Precious Metals, you need to keep an eye on all the sub-heads that contribute to the making of the final product.

Jewelers always tend to incorporate the making charges on the item that you will purchase. This is obvious as you have to pay for the craftsmanship that the jewelers are doing on the raw form of the metal. But you need to ensure that the additional charges are not over the line. A simple tactic is to calculate the amount that you have to pay per gram of the product and check the difference between the same form and the present per gram price of the metal.
Certification of purity is the evidence that you can check to have the assurance that the manufacturer is selling you only the pure form of the metal. Hallmarked gold is the strict product feature for all the leading manufacturers.

If you want the right Gold value for the asset that you are planning to purchase, do some research on the manufacturers and read the reviews before investing.

Factor #3: Purity

If you are a regular investor, you will know that the value of the metal depends largely on its purity. But all of you know that pure gold is a very soft form. Therefore, the manufacturers have to mix Gold with other metals like silver, copper, or nickel to form the alloys of gold.

The measurement of the purity of gold in the alloys happens in terms of the unit called “Karat.” Higher Karat implies that the purity of gold is higher. So, the next time you visit an online or offline store, you will know what it means by 18-Karat, 22-Karat, or 24-Karat. For the purest forms, you have to concentrate on 24-Karat.

If you find a seller claiming to sell 25-Karat or 26-karat jewelry, know for sure that the claim is false. The highest purity form is the 24- Karat ones, which are also softer than the other counterparts like 18-Karat or 22-Karat forms.

24 Karat Gold implies that 24 parts of the ornament include the use of Precious Metals while the rest comprises other metals. With this grade of purity, you can easily calculate the ROI too.

Factor #4: Insurance

When you have such valuable assets in possession like the yellow metal, there will be always the risk of burglary, theft, or damage in some accident like a fire or flood. There can be natural calamities like earthquakes or severe cyclones that can devastate the asset.

So you must find the right insurance policy that will offer complete protection of the Gold value against all such possible damages. Unless there is some good insurance plan available, you should not ideally proceed to buy the valuable metal.

Avoid sellers who are not professional dealers

It is imperative to save yourself from the shady sellers to avoid buying the impure form of gold with the assurance of buying the pure form.

You won’t get Hallmarked Gold which implies that there will be value depreciation.

You will be unnecessarily paying a huge sum for the metal when actually you are buying an impure form with a lesser gold content than the seller claims.

If you want to make a clean investment and secure the maximum return on the investment, you have to settle for trusted sellers who are professional dealers with years of good reputation in the industry.