5 Tips to Consider before Investing in Gold Bullion

picture of gold bullion laying on table

Before investing in gold bullion, there are several factors you should consider to make sure you’re receiving the best return on your investment.

Paul Mladjenovic, author of Precious Metals Investing for Dummies, gives some excellent tips regarding gold investing:

Tip #1: Be cautious

Mladjenovic explains that just because it shines or glitters does not mean it’s gold. Beware of scams. Read: 3 Shady Gold Investment Scams to Watch Out For.

Tip #2: Avoid rare coins

Unless you’re highly skilled at buying rare coins, avoid them or hire a professional to decide if it’s a good investment or not.  There can be a difference of thousands of dollars based solely on the grade of the coin.

Tip #3: Familiarize yourself with buyback policies

Research is important when it comes to understanding dealers’ policies in coin trading. Some do not charge a premium and some do.

Tip #4: Compare dealer prices

Paying more than 5 percent premiums for gold bullion coins doesn’t make sense. “Aim for the lowest price,” Mladjenovic says. Also, avoid buying gold on eBay because you can get caught in a bidding war.

Tip #5: Stick with one ounce coins

Fractional coins, as opposed to one ounce coins, carry higher premiums above spot prices. Mladjenovic feels it’s best to stick with at least one-ounce coin purchases.

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