How to Buy Gold and Silver

Posted on April 18, 2024

Buying gold and silver is pretty straightforward. However, if you’ve never done it before, it may seem daunting. If you’re feeling a bit nervous, this guide is for you.

The guide below will take you through all the steps of acquiring your favorite precious metal. It’s not that hard, and we’ll get through it together.

Step 1: Choose your metal

The first thing to do is to determine which precious metal you want to collect. Of course, there’s gold and silver, but you can also consider acquiring platinum, palladium, or copper.

In the end, it doesn’t matter which metal you choose. There are reasons for buying any of them, depending on the time and situation.

However, gold is still the most popular of the bunch. The yellow metal is known the world over and has been a store of value for thousands of years.

Because of its popularity, gold is also an expensive choice. An ounce of gold is far more costly to purchase than the same weight in silver.

However, if you’d like to purchase gold, you may either lack the budget for it or prefer to avoid significant upfront financial exposure. Silver is indeed a more cost-effective option for getting started in precious metals.

One thing to bear in mind, though, is the physical reality of taking delivery on silver (or gold). You need to have a secure storage space, and if you buy more weight with silver, it may require more cost to you to satisfy the security need.

At the end of the day, there’s no wrong choice. Diversification within the metals you buy is a great way to guard against shortages or gluts in supply that might affect the price of one metal.

Step 2: Decide how much you’re buying

Now that you’ve settled on what metal(s) you’re buying, it’s time to decide how much of it you’re going to buy. You can choose between the amount of weight you can handle, the amount that your budget will allow, or specific pieces (coins, etc.) that you want to own.

No matter your approach, your purchase will be a function of the spot price for the metal(s) you favor. The spot price is the price in the broader precious metals market at which expiring futures contract holders are accepting purchases.

However, the spot price is a bit illusory, no matter where you go to buy. Every dealer, online or retail, charges an amount known as the retail price. Adding a surcharge is the way that all of us make our money – any dealer who appears to offer precious metals exactly at spot should be treated with heavy suspicion.

There are things that you can do, though. Many products come with different pricing tiers. If your budget will support a bulk purchase of sorts, you may be able to get your precious metals cheaper than you would otherwise.

In general, the most expensive items to buy are coins. Coins are minted by sovereign governments and bear the full faith and credit of the same. In other words, they are pieces certified – by law – to contain an exact purity and weight. Additionally, some coins have added value due to their rarity or popularity.

The official elements of coins also mean that they are easier to trade, either to buy or to sell. Transfers of them rarely have the same inherent concerns about forgeries or other shenanigans that solid pieces of metal do.

On the other hand, bars, and rounds are cheaper to buy. So long as you buy with a reputable dealer (like BGASC), they are the most cost-effective way to increase the tonnage of precious metal you collect. Be aware, though, that it might be more difficult to find a buyer on the back end when you want to sell.

You also can find different prices based on the payment methods that you choose. As you choose methods that are more liquid – like checks or bank wires – your cost is likely to decrease. If you want to see how these options work, consult our payments page.

Step 3: Decide whether you’re trading online or in-person

Depending on your age and comfort with technology, you may not have much of a decision to make here. Some investors are decidedly online-based, while others prefer dealing with a flesh-and-blood trader.

We’re a bit biased on this question. However, there are pros and cons associated with either decision. So, to be fair, here are the concerns you might have over the transaction, along with which format would be better to address each one.

• Price – ONLINE – Although many retail shops compete for great prices, their overhead and other expenses usually mean higher prices than you can find online.
• Selection – ONLINE – Retail shops can have a wide selection of products, but they are always more limited than online dealers because of the physical reality of their stores.
• Convenience – ONLINE – Shops keep regular business hours, which may not align with your time constraints, but online dealers take orders 24 hours a day.
• Security – ONLINE – Because you can use a secure courier who certifies delivery of your products rather than adopting the risk when you transport your purchases yourself, online dealers have a decided edge.
• Trust – RETAIL – Online dealers are often bonded and insured, but nothing replaces the feeling of trust when you can get the metal in the palm of your hand.
• Timeliness – RETAIL – You can walk into a store and walk out with gold or silver. Although online dealers are fast, we cannot replicate the speed of a retailer’s transaction.
• Personal touch – RETAIL – Some people want to deal with a human in front of them. Our personnel are quite friendly folks, but it’s nice to be able to read facial gestures and other nuances that are lost over the phone, email, or live chat functions.

Step 4: Choose a dealer and buy

As we said above, there are always variables about the prices that you can get to buy. By all means, it is necessary to shop around for the best deals when you’re going to acquire some gold or silver. It is a major purchase in most cases, and you need not pay any more than you have to pay.

With that said, be wary of any deal that seems too good to be true. The last thing you want to do is have the headache of verifying your purchase independently or being saddled with hidden fees and costs. If it smells fishy, it probably is.

So, do your homework, and choose the best safe deal you find. We would love to work with you, but, more than anything else, we want you to be comfortable when you finally put your money on the table.