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Precious Metal Investment Strategies

25 April 2018 No Comment

Buying bullion sounds like a somewhat archaic type of investment. Surely, today’s investments are all about virtual transactions that take place in a fraction of a second and require only a change in some binary code on a computer server. Who wants to be physically taking possession of gold and silver bars in the modern world?

The answer, it seems, is more and more people by the week. One of the keys facets to a successful investment strategy is a diversified portfolio, and let’s be honest, it doesn’t get much more diverse than gold or silver bars at one extreme and cryptocurrency at the other.

Why buy bullion?

Traders buy gold, silver and other precious metals for the same reason they buy any other investment. Because they think it is going to increase in value. Gold, silver, platinum and more recently, palladium and rhodium have a reputation for stability in times of trouble and steady growth in value over time.

The current air of financial instability and political uncertainty, is exactly the kind of environment in which the precious metals markets have done well throughout history. And on top of that, demand for the metals themselves is soaring, with new applications being developed in the tech sector every week.

All of this creates a perfect storm – low and diminishing supply from mines, increasing demand and perfect market conditions. Little wonder the canny investors are heading for their bullion trucks and cannot get enough precious metal.

How to buy bullion

The image of a city slicker driving through central New York in an armored truck full of gold bars sounds like something from a 1980s comedy movie, but it is not as far from the truth as you might think. The best way to invest in precious metals is to physically buy them. There are pros and cons to the different types, but many enjoy the flexibility that is offered by silver. While gold bars are the stuff of legend, they are also extremely expensive, coming in at over $40,000 each. Alternatively if you buy silver bars from Golden Eagle Coins, the lower unit price gives you are more options.

Selling your bullion

Always sell your gold through a recognized company that has a transparent purchasing process. In general, you will get a better price selling back to the trader from whom you bought your gold or silver in the first place than from going to someone new. Many offer a “buy back” commission of only around the two percent mark, compared to the four or five percent they would otherwise charge.

Ride the waves

Bullion is an investment that you can hold, touch and feel. It stands a little apart from the frenzied 24/7 trading world in which we typically operate, and that cannot be a bad thing. Just remember to treat your bullion investment accordingly. Gold and silver are not commodities you can buy today and sell tomorrow – try that and you will end up on the losing side. But over time, they make one of the safest investment types imaginable. And for that reason, they deserve a place in every investment portfolio.

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