Historically, gold has proven itself to be a prudent investment choice compared to other assets. This is especially true during unstable economic times, the most recent being the COVID-19 pandemic and the 2008 market crash—and before that, Black Wednesday in 1992.
During these and many other worrisome financial moments in history, the value of gold has tended to retain or increase and perform as a safe haven against inflation and the declining value of currencies.
Of course, the value of gold rises and falls, as does every other asset in the marketplace. But there are reasons why investors tend to put their money into gold when the financial forecast looks stormy.
Why have valued gold for literally thousands of years? The reasons are complex.
Here’s a look at how to buy gold, and how to sell gold, now and in the future.
How to Buy and Sell Gold
You can put your money into gold exchange-traded funds (ETFs), gold jewelry, gold options, and futures, gold mining stocks, or gold bullion.
If you’re a beginning investor, the best place to start might be to put your money into gold bullion, i.e. gold ingots, bars, and coins that are officially recognized as being made of at least 99.5% pure gold and are kept as reserves at banks.
If you invest in gold bullion, you can use it to diversify your portfolio and hedge against the effects of inflation on your portfolio.
More, you can use gold bullion coins—not bars or ingots—as legal tender in North America.
How to Buy and Sell Gold Bullion
Expert investors will tell that buying and selling gold bullion is a three-step process:
- Buy gold bullion when you can get it as close to the spot price as possible
- Sell gold bullion when you can sell it as close to the spot price as possible
- Allow for enough time for the spot price to rise, leaving you with a positive yield on your investment (after all fees and premiums are accounted for)
(Spot price refers to the price of gold bullion, or any other commodity, at a particular moment in time. As of this writing, for instance, the spot price of one ounce of gold is just over USD 1,765.
To do what the experts recommend, you may have to exercise some patience.
If, for whatever reason, you need to buy or sell gold bullion right this minute, however, doing so might work out well for you too.
How to Be Wise About Buying and Selling Gold
To buy gold bullion, do your research. Shop around for gold bullion dealers that will give you the best deal for 1 oz or more of gold ingots, bars, and coins. Look up reviews; see which gold bullion dealers have the best reputation. Call different dealers and, if possible, visit them in person. The goal is to find a dealer that’s willing to sell you gold bullion with as little of a premium above the spot price as possible.
Then, when you’re ready to sell your gold bullion, shop around for a gold bullion dealer willing to buy your gold as close to spot price as possible. Some bullion dealers are more willing to buy your gold at spot price than others, just as some bullion dealers are more willing to sell you gold closer to the spot price than others.
Buying from and selling gold bullion to banks is another option, but banks aren’t known for giving beginning investors the best deals.