Would you like to buy physical gold as an investment? While there are many types of physical gold, it's often broken down into two categories, gold bullion and numismatic gold.
Considering Gold Bullion
Bullion describes gold in bulk. Traditionally, gold bullion meant gold bars, but it can also mean gold bullion coins. Bullion is often what people think of when they consider investing in physical gold. But there are a few things you need to know about it.
Pros of gold bullion
Bullion is only ever worth the current market value of gold. People often purchase gold to save for a rainy day. That's because physical gold is a commodity—it doesn't require somebody else to pay out to achieve its value. By contrast, think of a stock or bond which only exists because another entity controls the value of it.
Gold also holds universal value. People all over the planet recognize the value of gold. That's one reason it retains its value.
Cons of gold bullion
Gold bullion…is complicated. Knowing when to buy it, sell it, or hold it takes research and dedication to the market. Not all gold is the same. The actual amount of gold contained in bars and coins isn't always high. This is a hazard that can come from not doing research on where you source your gold from.
In addition, it costs to hoard gold. You will need to find a place to keep it safe. And remember that gold is a metal; a lot of bullion equals a lot of weight.
Considering Numismatic Gold
Numismatic gold is gold that has value beyond its actual gold content. These are things like rare gold coins or even gold jewelry. The word "numismatic" is "the study or act of collecting of coins, paper money, and medals" (Merriam-Webster).
Numismatic gold can make for an excellent investment. However, it's not always safe to assume the value will hold on numismatic gold. It's also not safe to assume that everybody who advertises numismatic gold is really selling numismatic gold. So what makes it numismatic gold and not just market value gold?
Pros of numismatic gold
The greatest advantage that numismatic gold and jewelry has over bullion is that it has a value beyond that of its gold content. Sometimes, that value can be orders of magnitude beyond the price of gold. It's possible to purchase numismatic gold for cheap prices if you're knowledgeable and the seller isn't. You can also purchase numismatic gold in bulk, just like bullion.
Cons of numismatic gold
The learning curve for the numismatic gold market is steep. This is especially true if you plan to actively invest rather than purchase and hold. Since the valuations can change based on demand, you can find yourself holding onto gold that is worth less than even the market value of gold.
Research First, Then Buy with Confidence
Many people are buying and selling gold; it's a thriving market. If you're new to it, you should always do your research. There's a learning curve involved with every aspect of the gold trade. But you will have to start somewhere. Make sure that when you do decide to buy gold, you purchase from a reputable gold dealer. If you're looking for a gold dealer near you, consider one like Rocky Mountain Coin Inc.