Buy bullion

Buy bullion

One of the greatest things about the free market system is that if you can afford it, it’s easy to buy bullion to add to your precious metals hoard. And while doing so is always a good idea, you do have to mind your step.

Here are a few simple rules to make the process easier.

Golden Rule #1: Focus on coin bullion from the U.S. Mint.

Any form of precious metal bullion is an excellent investment choice, but we suggest that you invest in American bullion coins struck by the U.S. Mint. In the beginning, at least, you should avoid bullion bars, much less any privately-struck or foreign-produced coin bullion. There are several good reasons for this.

First of all, the U.S. government guarantees the quality, purity, and stated weight of all types of American coin bullion. You can buy with confidence, knowing that what you’re getting is exactly what the government has promised. This is one reason you can include American Eagles in your Individual Retirement Account.

Second: American bullion coins are more easily available, from a larger number of vendors.

Third: American coin bullion is easier to sell and trade, because it’s a lot more popular among investors than bars or foreign coin bullion.

Golden Rule #2: Avoid old circulated coins.

Whether you’re considering a few plain silver dimes or the gorgeous gold double eagles struck in the early years of the 20th century, when you try to purchase antique legal tender as bullion, you have to compete with collectors.

The collectible value of such coins always adds a premium to their bullion price. On the other hand, modern bullion rounds have no real collector value. They’re still fine looking coins, but their value derives solely from their metal content — not their age.

You just get more bang for your buck when you purchase bullion coins.

Golden Rule #3: Don’t buy bullion on an Internet auction site.

This should go without saying, but a lot of us go through a trusting phase when we’re bullion-buying newbies. Sites like eBay may seem to offer good deals for bullion, and sure, maybe some of those deals really are legit.

The problem is that an unscrupulous seller can easily word a headline to make a piece of dross sound like a genuine deal. Here’s one Your Humble Writer almost fell for early in his bullion investment career: a one-ounce silver Maple Leaf bar, 100 mills 999 silver. Said so right on the bar.

It was cheap, too — well below market value!

And it really did weigh an ounce. Of something. The problem was, the “100 mills 999 silver” was electroplating — and a mill (more properly spelled “mil”) is a unit of thickness, not purity. Worse, the silver thickness was really 0.1 mils. There are a thousand mils to an inch, so… Yow!

Needless to say, that “silver” bullion didn’t get bought. The “gold” bars are worse: some are actually stamped “99.99% PURE GOLD, ONE OUNCE.” They’re no more pure gold than the Brooklyn Bridge is.

Buying bullion anywhere is very much a case of caveat emptor. Therefore, we recommend that you only buy bullion from reputable dealers — whether online or in the physical world.

And you can buy bullion with confidence — as long as you avoid the pitfalls and traps most gold investors make. You can find out how by checking out this free resource.

Now it’s your turn.┬áComment below…

 

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