How to Buy Gold: A Beginner’s Guide for Smart Investors

How to Buy Gold: A Beginner's Guide for Smart Investors
How to Buy Gold: A Beginner’s Guide for Smart Investors

Gold is one of the most well-known forms of value in the world. It crosses cultural barriers, and gold has served a variety of functions throughout history, including coinage, critical elements in electronics, and handcrafted jewelry. Many investors now see gold as a unique asset that provides an alternative to traditional stock and bond markets. Let’s find out how to buy gold in this article!

Why Should We Buy Gold?

Investors are often lured to gold because of its diversity and hedging possibilities. And, although it is a physical asset, it is often easier to convert to cash, making it more tangible than other physical assets such as real estate. Furthermore, although buy gold may not always outperform other investments, it has shown strong long-term returns.

If you want to become wealthy with gold investments, you may have to wait a long time. However, if you’re seeking a non-correlated asset to protect against inflation and market instability, gold might be a suitable choice.

Gold is a haven asset
Gold is a haven asset

Pros and Cons of Buy Gold

Buying gold, like any other kind of investment, has both benefits and cons. Understanding them can help you determine whether you are a good fit for this asset class and improve your investing strategy.


Long-term exchange value

Gold has kept its worth from 1200 BCE, when the Chain Civilization of Peru utilized gold in castings for the Egyptians in 5000 BCE, and since the beginning of civilization.

Today, gold has both aesthetic and monetary worth, and it is used in jewelry and purchased and sold by millions of individuals throughout the globe.

Safe refuge

Gold is seen as a safe refuge during uncertain times or periods of sociopolitical unrest. For example, after the Brexit vote in 2016, its price increased by more than 10% in a single month.With the current international volatility, gold has shot beyond all-time highs and continues to rise by the day.

Used for emergencies

In the unusual event that UK banks shut down due to an emergency and refuse to give you your money, you may still use your gold as money for needs. You could barter, melt down, and trade for cash with someone who possessed liquid reserves.

Inflation hedge

Gold is one of the finest assets to utilize as an inflation hedge since it rises in tandem with the cost of living. Over a 50-year period, you will often discover that when there has been substantial inflation, gold has outperformed it. Even during the Great Depression of the 1930s, the price of gold rose dramatically. Can you understand why this is such an excellent asset?

Limited resource

People incorrectly believe that hundreds of thousands of tons of gold are created each year; however, the fact is that only approximately 50 million try ounces are. In actual terms, it corresponds to 14 cubic feet, which is not a huge amount given global demand. Many people understand that when something is rare, difficult to get, or limited, its value will likely grow. The same is true with gold.


Although many investors may have money in assets, stocks, enterprises, and real estate, they will also have cash to buy gold, which is excellent for asset diversification. When there are problems or volatility elsewhere, such as in the stock market, gold tends to climb.

Gold is seen as a safe refuge during uncertain times 
Gold is seen as a safe refuge during uncertain times


  • Expensive to keep. Storing gold at home exposes you to significant risks of theft or loss. Keeping it in a commercial facility incurs storage expenses, which are frequently determined by the amount and value of the assets (ranging from 0.5% to 2%). If you are not utilizing a professional storage facility, you need to insure your gold as well, which will incur an additional cost.
  • Illiquid. Physical gold cannot be sold by pressing a button or calling a broker. Even with dealers working for you, a transaction might take days or weeks to settle, and you must arrange for transportation.
  • Not give a high profit. Physical gold does not provide interest or dividends. The only opportunity for gain is if prices rise enough to allow you to sell at a profit.

Methods of Buying Gold

Historically, when it comes to investing in gold, earlier generations only considered purchasing real physical gold to accumulate over time. However, as the economy grows fast, numerous new ways to invest in and acquire gold have emerged to reach a larger audience.

You can invest in gold in a variety of ways.
You can invest in gold in a variety of ways.

Physical gold

When most people think about buying gold, they see “bullion,” as it is often known. Gold bars, gold coins, hunks of pure gold, and jewelry are the stuff of treasure chests and bank heists. While it’s perhaps the most exciting way to put your money into gold, it’s also the greatest hassle to buy, keep, and sell.

A word regarding gold jewelry: While it may occasionally appreciate in value over time, assessing it can be difficult, and there are no assurances you’ll be able to sell a piece for more than you paid for it. There are a number of customers who buy jewelry with the intention of reselling it. There is a significant markup on jewelry, and the value when resold is much lower than the initial purchase price.

Gold Stocks

purchasing shares in a gold mining firm, like purchasing any other stock, carries some risk, but it also gives you total choice over the companies you invest in. A gold mining company that cares about the environment more than one that doesn’t could attract more investors. And, although holding gold stocks does not allow you to physically hold gold, it does provide you with the advantage of having an asset that you may sell at any moment.

Gold Funds

Investing in gold mutual funds implies owning shares in a variety of gold-related assets, such as several gold mining or processing firms, but not the real gold or individual stocks themselves. Gold exchange-traded funds, or mutual funds, are more liquid than real gold and provide more diversity than a single stock. ETFs and mutual funds also have legal safeguards. Be aware that certain funds may charge administration fees. 

Gold Futures

A gold futures contract is an agreement to purchase or sell a certain quantity of gold at a later date. The contract is what is exchanged on an exchange. Gold futures have more liquidity than real gold and no administration costs, although brokerages may impose a transaction fee (also known as a commission) for each contract. Keep in mind that trading futures contracts has a high level of risk and is not an appropriate investment choice for new investors. The amount of money you might lose from these investments may surpass your initial investment.

This is a relatively new kind of investing that needs some familiarity with trading and technical chart analysis. For beginner gamers, consider copy trading on trustworthy exchanges such as Wecopytrade. Here, you may follow the market’s most experienced investors to reduce the danger of losing money when you have to grope.

Gold futures are frequently referred to as the XAUUSD trading pair
Gold futures are frequently referred to as the XAUUSD trading pair

Tips for Proper Gold Investments

Compared to other investing options, buying gold is one of the most straightforward. However, individuals who are fresh to the market should take heed of the following suggestions to optimize investing portfolio.

Know when to purchase

Because the price of gold travels in opposite directions to the stock market, the optimum time to purchase gold is when a recession or financial catastrophe is imminent. That advice, however, is so popular that demand tends to skyrocket in such situations, depleting gold supplies faster than they can be replenished.

Another solid rule of thumb is to purchase gold when things have calmed down, at least momentarily – the eye of the storm, if you will. However, many believe that gold’s long-term prognosis remains favorable, so now may be a good time to buy.

Learn how gold values are determined

The price of gold is regulated by the cycle of supply and demand, so if you purchase during a busy period, the competition pushes up the price. Also, keep in mind that when you buy gold, you’ll be paying for the item as well as a 1% to 5% premium, so make sure you budget for the whole amount.

Find the suitable dealer

Your typical brokerage or financial services business probably does not deal in gold. Bullion is normally offered solely by banks and gold merchants, while minted coins are available via coin dealers, brokerage companies, and precious metal dealers. Whenever feasible, attempt to buy from a bank first, since they sometimes have cheaper markups than dealers.

Banks may not always have the precise coins or size bars you’re searching for, so if you do decide to go to a dealer, do your homework to locate someone trustworthy. This entails carefully reviewing online ratings in trade periodicals and websites, as well as verifying for complaints with the dealer.

Select the sort of investment that best meets your unique financial requirements
Select the sort of investment that best meets your unique financial requirements

Prepare a storage strategy

Storing significant quantities of gold in your house makes you susceptible to theft, so insure it and choose an off-site storage facility where you can be certain it’s safe. In fact, if you wish to keep gold in an IRA account, the IRS requires that it be kept with a metals-specialist custodian via a gold IRA.

Investing in gold is not for everyone, and some investors prefer to gamble on cash-flowing companies rather than hoping that someone else would pay more for the bright metal. That is one reason why great investors like Warren Buffett advice against investing in gold and instead recommend owning cash-flowing companies. Furthermore, stocks and ETFs are easy to hold and very liquid, allowing you to convert your investment to cash fast if necessary.

Visit our website at to learn more about how to buy gold or to remain up to speed on important investing information and recommendations. Furthermore, WeMasterTrade provides a Funded Trading program, which allows new investors to comfortably participate in the investment game. Find out more and sign up for our program now!