Gold Bullion Blog

1 OZ Gold Bullion Coin Investing Background

Large investors in gold bullion pay their bullion dealer to store gold they purchase in a vault controlled by the dealer. This is because gold is expensive to transport and risky to store. This also makes it easier to sell gold since it is already located at the bullion dealer’s facility.

However, many investors are unaware that such an arrangement makes it easy for the bullion dealers to sell gold that doesn’t actually exist. If a few buyers choose to take delivery of their gold, the bullion dealer can usually produce enough to satisfy the order. But if many investors asked for delivery of their gold, the bullion dealers would have to buy enough gold on the open market to satisfy demand, thus driving up gold prices. And if enough investors asked for delivery, the bullion dealers would default and not be able to supply the metal.

By some estimates, there only exists enough gold in the world to satisfy about 10% of what investors think they own. More and more, people are losing faith in the paper currencies of their government. They are cashing out of stocks and bonds and buying physical assets such as gold. Investors, even large investors, are asking for delivery of the gold they buy.

What does this mean for the smaller gold investor? The price of gold will continue to rise for the next several years and you can benefit from the trend by investing in gold.

Your primary options for investing in gold are to buy gold bullion and take delivery, buy bullion and allow your gold dealer to store it for you, purchase stock in gold mining, exploration, and other gold-related companies or invest in a fund that holds gold securities.

Given the current economic turmoil, the safest investment is physical gold bullion that you purchase and store yourself. 1 oz gold bullion coins are the preferred choice of many investors. Why? Because purchasing gold coins is easy, safe and coins can be quickly sold for cash should the need arise.

With a few precautions, buying 1 oz gold bullion coins can be easy, fun and financially rewarding.

1 OZ Gold Bullion Coin Buying 101

  1. Only buy 1 oz gold bullion coins that are produced by government mints. It is perfectly legal to privately produce gold coins as long as they are not designed to imitate coins used as currency.
  2. Buy 1 oz gold bullion coins instead of gold bars. When it comes time to sell, it is more difficult to prove that a gold bar has the gold content claimed. With a coin minted by one of the world’s large governments, the buyer knows exactly what they are getting without the need for expensive verification.
  3. Buy from a trusted source. This is especially important when you are buying coins by telephone, mail order or on the Internet. If you are uncomfortable with transacting business in this fashion, find a reputable local gold dealer and buy in person.
  4. Search for bargains. You can often find private parties who are willing to sell their gold bullion coins for less than the spot price of gold. Check classified ads in your local newspaper, on or at Internet auction sites.
  5. Take delivery.
  6. Store your gold in a safe place. Whether you keep it in a safe in your own home or a safe-deposit box at your local bank, be sure your gold is secure.

Follow these simple guidelines to enjoy investment growth while protecting your hard-earned money in an uncertain economy.