Buy Gold And Silver Safely

First of all, it is important to know the different ways to invest in gold. As you can see in the image below, the first and most typical form is ‘physical gold and silver. This option has both advantages and disadvantages.


Physical Gold and Silver


Within this option, we can buy coins and ingots in physical stores and online. These stores usually buy gold from refineries. This business works thanks to the fact that this company sells the gold to the stores at the listed price at that time, and the stores sell it to us but charge at least a 3% premium.


We have talked about physical and online stores, but I wanted to mention that if you have a trusted jeweler, you can also buy it there; just look at the premium they charge you, probably around 3% or something less.


Gold and Silver Paper


Now let’s go-to paper gold, which I think is more convenient to buy; it’s an ETF, it doesn’t require so much effort, they don’t charge us the 3% premium… and, therefore, we can buy and sell more easily. In the specific case of silver, the advantage they provide is even greater because it is not subject to the 21% VAT.


From my point of view, the problem with paper gold is that if the financial system collapses, it would be very difficult for the ETFs to give them the gold that corresponds to the participation they have in the ETF.


Therefore, what we are trying to do here is to buy physical gold because we believe that sooner or later, we do not know when the financial system may go bankrupt and, in that specific case, we would find that our gold, the one we had in that ETF it would not reach us.


Mining companies


Another way to approach investing in gold is through mining companies. The difference is clear, the mining companies are companies, and what they are buying is a share in the profits; logically, the more the price of gold rises, the more the price of the mining companies will rise.


Having said that, now what is appropriate is to start with the purchase procedure. In this case, we have chosen an online store, but if they have a trusted jeweler, I will go there before entering the online store.


How to calculate the premium


To calculate the amount of pure gold in the coin: If the coin weighs 37.5 grams and the gold purity is 900 over 1,000, the number of grams of gold in the coin is 33.75. On the other hand, if the price of the coin is 1,889.44, the cost of one gram is 55.98 dollars.


To calculate the cost of an ounce that has 31.10 grams, we multiply it by 55.98, and we get 1,741. We subtract 1,514.64 from this result, and they are charging us 226.4 euros above the price of an ounce of gold. That is a premium of 14.95% to what the shipping costs should add.


Therefore, the first conclusion we draw is that there is no need to buy coins. If you are people who buy gold for investment, do not buy coins, you have to buy gold bars with a premium of around 3%. Thus, they already have the basis on which to negotiate; we know what the reference of the premium that they should charge us is.


Many times, when the demand for gold is very strong in physical and online stores, the premium increases. The important thing is that premium and, therefore, here the jewelers can play a very important role.

Buy Gold And Silver Safely
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