When investing your retirement funds in gold, you might be confused as to what is the best way to invest?
Whether you should go for ETF, Future and Option, and Bullion.
Bullion is the most risk free way of buying gold, as you are physically in possession of the gold and it’s not just a piece of paper declaring you have bought a certain quantity of gold.
It is actual gold.
You can buy gold bullion in two forms. You can either buy coins or you can buy gold bars. The biggest advantage of buying gold coins over bars is that it allows you more flexibility while buying and selling your gold. You can easily sell a chunk of investment if you have bought coins, but if you have bought a bar then you will have to sell the whole bar. Due to this reason the gold coins are a little more liquid (easily sell-able) than gold bars. However, if you are buying quite a large amount of gold, then it might be a better idea to buy bars as they are more practical, and easily storable.
When it comes to gold coins, there is a variety of them available in the market. Some coins might cost a little more than the other due to rarity or beauty. As you are not buying the coin due to its beauty or any other feature like this, you should buy those that offer you the lowest premium over the current price. The coins that usually offer the lowest premium over the current price include the South African Krugerrand, Britannia and sovereign. The biggest advantage is that when you sell your gold coins, you don’t have to pay any tax on the profit that you make.
If you are planning on buying gold bullion the most important thing to consider is the price. Like in any other business, gold dealers make money by selling at a higher price than the actual market price. The cheapest gold coins are sold in Hong Kong, so it is a good idea if you can buy through a bank there and then sell in your country. There are many dealers who provide the service of buying from overseas.
These dealers will deliver the gold to your doorstep without you having to hassle for anything. It is very important that you choose a well-established and trusted gold firm. Many people have lost millions of dollars at the hands of new or inexperienced gold traders. You should do a thorough background check of the gold firm before you finalize the deal. Nothing should be left to chance. The firm’s past success rate in gold trading is also valuable when making a decision. Even after buying the gold, you should keep yourself updated with the latest prices of gold and commodities related to it.