Last Updated on Mar 17, 2022 by James W

Gold is an amazing commodity. The simple fact that gold retains its value as a commodity and works as an inflation hedge—especially in market downturns and times of geopolitical uncertainty—is a huge incentive for investors to add the precious metal to their portfolios. Gold has value and liquidity whether it’s in physical stock such as ETFs, or mining future/prospects. Physical gold itself has a lot to offer for new and seasoned investors alike. If you’ve been thinking about buying some gold or merely want to add more to your collection, it’s important to know what you should be looking for in a gold bar or piece of bullion. With that in mind, here are five steps to buying physical gold to diversify your portfolio. 

Select A Weight

Buying a few bars of physical gold isn’t just a sound investment strategy; it’s fun, too. The best place to start is in selecting the weight of gold you want. Weights can be variable, from one Troy ounce (31.10 grams) to 10 Troy ounces and beyond. The more common sizes are 400 g and 1 kg in addition to the 1 and 10 Troy ounce versions. Smaller good bars are a great investment, though. The primary advantage of getting smaller gold bars is that price fluctuations have a less significant effect on smaller bars than they do on the large ones. That makes a 1 oz gold bar a better bet sometimes than a much bigger one. 

Choose A Purity

When it comes to buying gold, purity is just as vital as weight. 99.5% is the absolute minimum requirement to be considered pure gold. The purity of gold is determined in the refining process. Other metals are typically mixed into gold, which affects its purity. Higher purities such as 99.9% and 99.99% have even higher amounts of gold in them. The former, also known as 999 gold, is fine gold while the latter (9999) is considered pure gold. Investment quality gold must be at least 99.5% pure, typically requires some insurance, and needs to have some physical storage considerations.

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Find A Reputable Vendor

Whenever you invest in something, it’s wise to ensure you’re going through an organization with a strong reputation and a solid track record. Watch out for any red flags. Check out online reviews. Find their business in the Better Business Bureau. Conduct a bit of research prior to selecting a vendor. Treat it with the same level of tenacity and care you would when researching car insurance quotes. You wouldn’t skimp on that sort of research, so observe the same level of caution when you’re looking to invest in gold! Another thing to look out for when you’re purchasing physical gold is the hallmark of the gold mint. The name of the mint should be prominently displayed on the bar and have some sort of certification. Moreover, a reputable vendor usually has considerable experience and understands what goes into buying/selling gold. A reputable vendor will likely accept multiple payment methods just like a standard business and usually offer a buyback program for the gold. If they don’t offer these, you may want to consider a different vendor entirely. Keeping your wits about you when choosing a vendor is critical to ensuring everything goes smoothly with your gold bar purchase.

Check Out Pricing And Delivery

Pricing for your gold should be reasonable and have a decent offer behind it. The vendor with the lowest prices isn’t necessarily the best one to buy from. This is because a common tactic to swindle customers is to bring down prices to a very low amount with an offer that’s too good to be true. So, approaching it with a little bit of information and savvy should help you find the best pricing for a gold bar or bullion. Delivery and shipping are also important. Is the shipping incredibly high priced? Do they offer buybacks? How will the gold be delivered? Understanding these factors will help you make better decisions, whether you’re buying your first gold bar or your hundredth.

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Ensure Authenticity

There’s nothing worse than taking delivery of counterfeit or impure pieces of gold. When you’re buying gold bars, it’s important to ensure the authenticity of the bar itself. There are a few ways to do this. On the bar itself, the gold should make a satisfying pinging sound. That means the gold is mostly pure and genuine. If it thuds, it’s probably got higher amounts of different types of metal in it then gold. Furthermore, using a rare earth magnet on your gold bar can tell you if it’s genuine as well. A real piece of gold will be magnetic with this type of magnet. Other tests such as the fire test and vibrational tests are probably best left to professionals. Another way to determine the authenticity of your goal is to get a certificate with it from the vendor. Any vendor worth their salt will supply a certification of the genuine nature and purity of the gold. Failure to ensure authenticity can lead to fraud and loss instead of the amazing investments gold can typically offer. Don’t let yourself be a victim by doing a little bit of due diligence throughout the process.


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