Best Way to Buy Gold Bullion

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Contributor, Benzinga
November 15, 2022

Buying physical gold or gold bullion can stabilize your portfolio against current inflationary-induced declining dollars, falling bond prices from rate hikes, volatility in the equity markets and global economic turmoil resulting from geopolitical tensions with hotspots in China, Iran, and Russia. While it may not deliver short-term returns like stocks, gold has a well-established history as a store of value or wealth and a safe haven in a turbulent economy. 

For instance, consider inflation. A 10% inflation rate means that basic things costing $10 will now cost you $11 — an extra $1 to buy the same thing. Since gold retains its value, you can potentially offset the loss in purchasing power of your dollar by investing in gold. And so it can make sense to buy gold, whether bullion, bars or premium coins. Benzinga reviews how buying these alternative assets can help you add diversification and stability to your investment.

Best Gold Bullion Companies

To buy high-purity and investment-grade gold bullion, you need a reputable gold bullion company with a track record of excellence in service delivery. Here are Benzinga's top picks.

Advantage Gold

Advantage Gold is a full-service gold IRA broker dedicated to assisting Americans build long-term wealth and meet their financial objectives by providing personalized investment guidance and flexible service options. The company is among the industry's reputed leaders, having also been awarded the most reputable company five times in a row by TrustLink — an independent review platform.

Advantage Gold offers IRA-approved, investment-grade gold bullion, premium coins and bars. Being IRA-approved means, it meets the 0.995 minimum fineness or 99.5% purity which is the recommended IRS standard. Besides IRAs, purity is also vital for the everyday investor buying gold bullion as a "value store" because high-purity gold bullion translates to high value. 

Beginner gold IRA investors will find great value in the company's uncomplicated setup process — including the complete rollover of existing IRA into a new gold IRA, low account minimums, superior customer support and robust educational resources. The company also distinguishes itself among competitors with its generous buyback program, which eases liquidation during distribution. Coin collectors will find Advantage Gold exceptional, thanks to its assemblage of bullion and premium coins from diverse global refiners. 

Advantage Gold collaborates with industry leader STRATA Trust Company for IRA custodial administration. For storage, the company partners with Brink's Global Services USA, Inc. and Delaware Depository — both highly respected industry leaders in vault storage and depository. Ordinary investors can choose to have their gold bullion delivered at home or have them store it at their partner depository. Either way works well. Advantage provides free shipping and 100% insurance coverage en route to your location and during storage in their partner depository.

Augusta Precious Metals

Augusta Precious Metals is another highly reputable gold bullion or precious metal IRA company offering Americans an opportunity to buy into gold- or silver-backed IRAs or to buy directly with cash. The company has a well-established track record of transparency in its operations. It has assisted hundreds of thousands of clients in securing their retirement with silver and gold IRAs by simplifying the end-to-end process of investing in gold and silver IRAs. 

Its excellent rating and reviews across various independent platforms reflect this fact. It has a perfect rating (5/5) on TrustLink and Consumer Affairs, an A+ rating from BBB and an AAA rating from Business Consumer Alliance (BCA). While most of Augusta's gold bullion exceeds the IRS 99.5% purity standards, some fall short and are not IRA-eligible, e.g., the South African Gold Krugerrand. When you purchase a silver or gold bullion from Augusta, you get free shipping with transit insurance until your delivery arrives and you sign it.

For IRA investors, Augusta partners with the Delaware depository for storage and Equity Trust for custodian management. Account opening is simple and fast; the company assigns you an expert assistant who will subsequently support you throughout your investment journey in the company. Augusta offers a seven-day price protection and a buyback commitment. Available educational resources and investment tools include a video library, precious metal kits, inflation and retirement calculators and many more. However, platinum and palladium investments are not available — a significant drawback. You can't order online, and it requires a $50,000 account minimum.

American Hartford Gold

Like all gold bullion or precious metal IRA companies in Benzinga's list, American Hartford Gold services IRAs investors looking to minimize risk through portfolio diversification or clients interested in purchasing gold and silver in cash as a store of value. Premium coin collectors are not exempted. When you buy silver or gold bullion, AHG will register, insure and deliver your package to your home at no cost. For an IRA, however, you must have it stored in its partner depository, Delaware or Brinks, in line with IRS rules. AHG partners with Equity Trust for custodian management — the favorite for most IRAs. 

AHG operations are highly streamlined with setup for IRA accounts or completing cash purchases requiring only a few minutes. The company is outstanding in its education-focused gold IRA program that fosters quick market information updates and trends to empower experienced and new investors. Furthermore, newbies can leverage the available free gold and silver guide to fast-track learning. It offers a large assortment of coins, including IRA-eligible and non-eligible gold coins.

The minimum investment is $10,000, and the company often waives first-year fees, after which annual fees may apply. For more information on fee structure contact company representatives. You can be sure of a speedy and excellent response, evident from ratings and reviews across platforms — A+ from BBB and 5/5 from Trustpilot. AHG also offers an unconditional buyback program that can help you save liquidation.

Lear Capital

Lear Capital is another well-rounded market leader and the oldest on Benzinga's list. The company's over 90,000 happy customers are a testament to its efficient service delivery. Lear is rated AAA by BCA. The company is also a Professional Coin Grading Service (PCGS) authorized dealer. So as a customer, you've got the full benefit of grading accuracy and authenticity. 

Lear's over 24 years in the industry positions it to meet your needs, from purchasing physical gold bullion or acquiring premium coins to adding physical gold to your current IRA. The company even takes it further, delivering optimized investing or acquisition methods based on your investment goals. For instance, you can realign your asset allocation, maintain an aggressive hedge against global volatility or secure tangible retirement protection. Lear's high degree of flexibility and its streamlined service offering aimed at providing customers with a best-in-class holistic investment experience differentiates it from competitors.

Additionally, Lear offers several benefits to its customers, including a buyback program, a 24-hour risk-free purchase guarantee, price matching and free IRA setup or storage. The website packs many valuable IRA investing tools and educational or informative content. These range from Smart Tools Suites and Precious Metal News to Precious Metal Price Charts. For IRA investors, Lear partners with Delaware Depository for storage, while Equity Trust manages all IRA accounts. A $280 maintenance fee applies for the first year and $200 after. For direct purchase, Lear will deliver your gold bullion to your doorstep at no cost. A free investors kit is available for new customers.

Red Rock Secured

Red Rock Secured is an excellent gold bullion or IRA company worth considering when buying physical gold bullion or premium coins to add to your gold IRA or via direct purchase. The company takes a unique knowledge-based approach to empower investors.

By providing quality retirement investment education leveraging resource-rich material and historical data at no extra cost, the company helps investors implement diversification plans that align with their individual investment goals. In investing, you can win big most times and lose at other times. Red Rock's "never zero" risk management philosophy ensures your portfolio will never reach zero. Various bullions and premium coins are available for investors and precious coin collectors. 

Red Rock provides price protection on selected silver and gold coins and a free 1-on-1 consultation with one of the company's experts for all eligible investors. Furthermore, eligible investors can qualify for zero-fee-for-life (check the website for eligibility criteria). Account opening and 401(k) or IRA rollovers are fast and easy, requiring only a few minutes, thanks to the company's efficient customer representatives. Although you can choose a storage depository, it's better to use the company's partner depository, which is insured by Lloyd's of London.

For direct purchase, you can have your gold bullion delivered to your house at no cost, with transit insurance covering the package till you receive the package and sign. For detailed pricing information, you can reach out to customer services; they're highly efficient, as reflected in reviews across platforms like Consumer Affairs and Trustpilot, where the company has a near-perfect rating.

Benefits of Buying Gold Bullion

Some core benefits of buying gold bullion follow. 

Easy to Liquidate Universal Currency 

According to the World's Gold Council, all the world's mined gold could fit into a 21.7m by 21.7m cube. Unlike fiat currency, physical gold cannot just be created when needed; its limited supply guarantees its enduring value. This makes it highly recognized and desirable globally. As such, it can easily be exchanged for goods and services in international markets or currency. 

Legacy and Inheritable Private Investment. 

As a store of wealth, physical gold is among the very few private investments left today. It removes you from the mainstream banking systems and their characteristics, digital record systems and counterparty risk. You've total control over your wealth and can quickly transfer it to your loved ones. 

Capital Growth and Return

Gold remains one of the best assets in the 21st century, delivering 19.1% annualized returns (14.7% when adjusted for inflation) between March 2000 to March 2021 compared to stock with 6.8% (4.7% when adjusted for inflation). If you bought an ounce of gold bullion in 2000, your profit would have been over 540% in 2021.

Diversification 

Gold is uncorrelated with the equity markets. So when equities and most riskier assets are underwater, gold often moves higher. Historical evidence abounds; for instance, in 1970 and 2008, stocks were terrible, and gold was profitable. The converse was the case in the 1980s and 1990s. Combining gold with stocks and bonds minimizes volatility and risks.

Inflationary Hedge 

Widespread inflation erodes the dollar's purchasing power, as is the current reality. Since its price rises with the increasing cost of living, gold has historically been used for hedging against inflation. Furthermore, it can also serve as a deflationary hedge. 

Factors to Consider When Buying Physical Gold

If you decide to buy gold bullion, you’ll need to keep a few points in mind:

Safe Storage

Physical gold needs safe storage. And while keeping such precious assets close can be fascinating, your house is not the right place for it. Most gold bullion companies partner with third-party depositories for storage, offering independent verification, audit control and insurance during storage. Storage is part of the service if you're buying gold bullion to add to your IRA. If you're purchasing directly, the company might extend storage services to you at a fee.

Insurance

Suppose you decide to store your gold at home. In that case, you must insure it against unforeseen events like fire, flooding, theft or burglary. Also, consider gold bullion companies that offer transit insurance to further protect it en route to your home or storage location. 

Size and Liquidity

Most gold bullion companies don't offer buyback commitments. And considering that you might need to sell at some point, it's good to look out for gold bullion that can easily make the market. Often, size determines liquidity — finding a buyer for a 1 oz. bullion may be relatively easier than a 25 oz. bullion. So given a choice, it can be better to buy smaller bars and bullion as they're potentially more liquid.

Purity 

Except for American Eagle, IRA-eligible gold must meet 99.5% minimum purity or .995 fineness. You can prioritize this degree of purity even if you're not buying for IRA investment because the higher the purity, the better the value.

ETFs and Gold Mining Stocks

The transportation and especially storage costs of physical gold can add up over time. You can, however, gain indirect exposure to physical gold and save costs by leveraging gold exchange-traded funds (ETFs) and gold mining stocks. They represent an investment in physical gold but in paper form. Compared to gold mining stocks, gold ETFs offer a cheaper and low-risk way of gaining indirect exposure to physical gold. 

Nevertheless, gold mining stocks are also cost-effective, considering the cost of storing physical gold. Franco-Nevada Corp. (NYSE: FNV), Barrick Gold Corp. (NYSE: GOLD) and Newmont Corp. (NYSE: NEM) are some of the best gold mining stocks. For the best gold ETFs, consider Sprott Gold Miners ETF (NYSEARCA: SGDM) and SPDR Gold MiniShares Trust (NYSEARCA: GLDM). You can also leverage gold mutual funds

Frequently Asked Questions

Q

What is the safest way to buy gold?

A

ETFs offer you the safest and cheapest means to buy gold. 

Q

Is it better to buy gold bars or gold coins?

A

Yes, a gold bar is better as a safe haven. Coins often cost more because of their numismatic value.