How to invest in gold

How and why should I buy actual, physical gold?

Ever wonder, "Why buy gold?" Or, have you ever asked yourself how to buy gold for investment purposes. If you want to buy and sell gold, you probably already know that gold and silver are both real money. Unlike stocks, bonds or even the dollar (or euro) bills which are only representations of actual money, when you buy gold or silver, it has an intrinsic value that cannot be broken down by a currency crisis on the forex exchange or a stock market crash.

For this reason, buying gold is very popular. Many investors want to know how you can buy and sell gold for investment. When you buy gold, it does not pay dividends, and it may not provide exciting prices on your daily chart, but it is precious, liquid and traded in the world's markets 24 hours a day.

"Financially, owning physical gold is like owning real estate outright, mortgage-free," says Adrian Ash, Head of Research at BullionVault, a company registered in Britain for the buying and selling physical gold and silver directly in the market.

Past gold prices

Buying gold at your bank? Buyer beware!

This is probably the method that will appear the easiest and/or natural to most of us. Although your bank does not advertise such a service, you can still use them to buy gold bars or various types of gold coins still listed on the market. This method is far less convenient than going through a company such as BullionVault, though!

According to banks, this will cost 2-4% commission on your purchase, plus possibly the rental of a safe to keep your gold (around 60 dollars or euros per year). But be prepared to at least receive a disdainful look from your account manager, who is trained to portray gold as a "barbarous relic", and be prepared to repel his sales shtick as he tries to get you to place your money in his bank's latest miracle financial product (the one where your account manager earns the largest commission, of course).

Bankers hate gold because once you've made your purchase, you become an unproductive customer in their eyes. No management fees or any other annual fees with which your banker would earn commissions off of your investment.

It may even be possible that your banker will at first refuse to make a gold purchase for you. In this case, shop around. Pretend that one of their competitors agree to support the transaction only if you move your current account with them. In general, you will quickly get more cooperation from them.