There are many reason why someone might be interested in investing in bullion; hedging, diversifying, long term investing, etc.
In this guide, we focus on what you need to know about purchasing precious metals directly from bullion dealers and brokers & how and where to do so.
How to Buy Gold and Silver Bullion
Gold coins, silver bars, and other items made from precious metals are called bullion. Here are the most common ways to buy bullion:
- National mints – Many countries sell commemorative bullion coins from their mints like the American Eagle coin or the Canadian Maple Leaf.
- Local dealers – Pawn shops and other local businesses may also sell precious metals in various forms.
- Bullion dealers – Online retailers, like Money Metals Exchange, that sell precious metal coins or bars that you can store at home.
- Trading platforms – Some online dealers like BullionVault or BullionStar will allow customers to trade bullion with each other and also provide secure vaults for storage.
Choosing a Bullion Dealer
If you want to buy bullion, there are several things you’ll want to keep in mind when choosing a dealer or service.
First, you should determine if the dealer you’re looking at offers the type of bullion you want.
Bullion typically comes in the form of bars, rounds, coins, numismatics, or jewelry. Here’s what they look like:
(Apollo2005 / CC BY-SA.)
|Refined metal that can be cast or minted. Larger bars are called ingots. Typically have serial numbers and other information imprinted on them. Lowest premium on the marketplace.|
(sirqitous / CC BY 2.0.)
|Looks like a coin but is closer to being a bar. They can't be used as legal tender. No date or denomination.|
(sirqitous / CC BY 2.0.)
|Produced by government mints. Can be used as legal tender in addition to its bullion value. Coins have an issue date and a denomination (eg, $1) on the coin.|
(sirqitous / CC BY 2.0.)
|Commemorative coins that are collectible. Typically not used as a bullion investment since their value is often disputed.|
(Housing Works Thrift Shops / CC BY 2.0.)
|24-karat jewelry is considered bullion due to its purity. Some metals at this level of purity, like gold, are too soft to wear as jewelry, but can be used as an investment.|
Dealers sometimes specialize in specific precious metals. Most offer gold and silver bullion but it can be trickier to find other metals like palladium, platinum, copper, and rhodium.
Take note of the sizes of bullion the dealer offers. Remember that bullion weight is measured in troy ounces. A troy ounce weighs just over 31 grams.
Not all online dealers accept customers around the world. Check to make sure that the dealer you want to work with doesn’t have any geographic restrictions that exclude your location.
Pricing and Fees
You can compare pricing by looking at the spot price for a type of metal. A bullion dealer usually adds a percentage of the total value on top.
You may also need to factor in wire transfer fees, storage fees, or other fees to use a specific bullion marketplace.
Storage and Shipping
You’ll be responsible for storing the precious metal bullion items you purchase, so you need to factor in the cost of shipping. Shipping costs depend on the weight of your purchase.
Dealers should also fully insure your purchase if something happens to your package in transit.
If, however, you do not want to store your bullion, you should seek a platform that will store your bullion purchases for you.
It can be hard to determine whether a dealer is legitimate or not, so do your research to ensure that the company you’ve chosen is reputable. We recommend reading reviews to see how others have faired when working with a specific dealer.
Keep in mind that sometimes reviews, especially on a dealer’s website, can be edited, added, or removed. Because of this review bias, it’s best to check more than one site’s reviews.
What’s the size of your order? You’ll need to make sure that the bullion dealer you select has enough metal in stock to avoid splitting your order between dealers.
Some bullion dealers will offer bulk pricing or discounts on shipping for large orders.
If you lack secure storage, you might consider working with a company that offers onsite storage services like Money Metals Exchange.
Bullion Trading Platforms
Bullion trading platforms aren’t dealers per se, but they allow precious metals buyers to access professional bullion dealers via their platforms.
- Storage vaults so that you can store your bullion securely and then withdraw it whenever you like.
- Bank vault level security on your stored bullion.
- Insurance on shipping and stored bullion.
- Daily audits for purchased bullion.
- 24/7 access to buyers and sellers.
- Active traders have the opportunity to achieve a negative cost per trade by earning the spread.
Online Bullion Dealer Comparison
When your local coin dealer or national mint doesn’t have the products you want (or the prices you’d like), an online dealer fill the gap. These three companies are good place to start.
|Money Metals Exchange||BullionVault||BullionStar|
|Dealer Type||Bullion Dealer||Bullion Dealer & Trading Platform||Bullion Dealer & Trading Platform|
|Selection||Gold, silver, platinum, copper, palladium, rhodium||Gold, silver, platinum||Gold, silver, platinum|
|Forms||Coins, bars, rounds, kits||Coins (gold only) and bars||Coins (gold only) and bars|
|Pricing Over Spot||Gold: $79, Silver: $4.39, Discount on larger orders||0.5% transaction fee, +0.3% currency-exchange fee for Pounds, Euros, or Yen||Gold: 0.34%, Silver: 1.14%, Platinum: 0.6%|
|Storage||Maximum of $96 for up to $15,999 worth of bullion, 0.39 - 0.59% for larger orders||Per year: gold = 0.12%, silver = 0.48%, platinum = 0.48%||Per year: Gold = 0.39% (Singapore), 0.59% (NZ); Silver & Platinum = 0.59% (Singapore), 0.88% (NZ)|
|Shipping||In some cases, shipping is free. Insured.||100g gold bars ship for $140 - $230 depending on destination country. Insured.||Shipping is calculated on checkout. Courier delivery available in Singapore. Insured.|
Additional Ways to Trade Precious Metals
You don’t need to purchase physical gold or silver bullion to invest in precious metals.
Below is an overview of these other ways you can get exposure to the price of precious metals and other commodities without owning the metals physically.
Shares and ETFs
Purchasing shares and ETFs in mining companies can give you exposure to the prices of gold, silver, and other precious metals.
Learn more about shares trading from our guide to online stock brokers.
Contracts for Difference (CFDs)
CFDs are contracts that pay the difference in settlement price between the opening and closing trades, and they’re popular for short-term trades involving precious metals. If you’re looking for a CFD broker, we recommend Plus500 and FXCM.
With CFDs, you can speculate on price movements without actually owning the metal.
Read our primer on how to get started trading CFDs.
Futures and Options
Both futures and options on futures (often called simply “options”) allow you to speculate on the price movements of precious metals. Like with CFDs, you don’t own the asset with these types of contracts.
- Futures require you to buy or sell a metals contract at a certain price on or before a fixed date.
- Options on Futures give you the right (but not the obligation) to buy or sell metals at a specific price while the contract is valid.
Some bullion dealers like offer gold or silver investments in the form of self-directed precious metals individual retirement accounts (IRAs).
Gold IRAs act just like other IRA — including the ability to take possession of your gold investment (subject to normal IRA distribution taxes).
Overall Verdict On Bullions
Precious metals like gold and silver in the form of bars, rounds, and coins can be valuable assets to include in a diversified portfolio.
Unsure where to go next? Learn more about trading bullion with our precious metals guide.
How do bullion dealers make money?
Bullion dealers make money on the fees they assess on purchases. This amount is called the premium, and it is the amount the broker charges you above and beyond the precious metals’ spot price. The broker may also be speculating on the price of the metals, which can increase or decrease their profits.
How much gold bullion can I own?
Laws vary by location. In the United States, there are currently no laws on the books regarding how much gold bullion you can own. In the UK and the EU, there’s no limit but purchased gold bullion is subject to a capital gains tax. Be sure to check the local laws and regulations that apply to you before purchasing gold or other precious metals.
Is buying gold online safe?
Buying gold online from a bullion dealer or trading platform is safe if you work with a reputable dealer that employs SSL security on their website and they offer insurance their physical metals shipments. You should also check reviews of the bullion dealer you’re considering.
Can I buy gold from a national mint?
You can buy gold, silver, and other precious metals as commemorative coins, bars, or rounds from various national mints. The US Mint sells American Eagle Coins and American Buffalo Coins. You can purchase Maple Leaf Coins from the Royal Canadian Mint. The South African Mint lets you buy Krugerrand Coins and the Perth Mint in Australia also sells gold and silver coins.
What is the cheapest way to buy gold and silver?
To find the best prices on gold, first, choose a dealer that charges the lowest premium on top of the current spot price. Second, consider buying gold bars or rounds instead of gold coins. Although coins are legal tender, their commemorative value can cause the price to be higher than bullion like bars and rounds.
For silver, bags of “junk silver” are available from online brokers. These are generally bags of US quarters & dimes minted before 1965 — when these coins were comprised of 90% silver. This junk silver is sold by weight.
What’s the difference between gold coins and gold rounds?
Gold coins and rounds may share the same shape and percent purity of gold. However, coins are legal tender and have both an issue date and a denomination stamped on them. Rounds are not dated and can’t be used for legal tender.
Why do people buy bullion?
People buy bullion as an investment. Gold, silver, platinum, copper, and other metals can help traders and investors to diversify their portfolios. Some traders believe that bullion may act as a safe-haven investment when other assets show more volatility.
What’s the price for spot gold?
The spot price for gold is how much it costs to purchase or sell a troy ounce of gold on the various marketplaces. The spot price will change based on demand for gold, the value of fiat currencies, current events, and more. The spot price is the basis for what dealers charge when selling you gold.
Are commemorative coins worth more than other types of bullion?
It depends. The spot price for gold is consistent across all types — eg, bars, coins, and rounds. Government-issued gold coins have a legal tender value that is separate from its bullion value. Other collectible commemorative coins, called numismatics, aren’t legal tender and their purity and value can sometimes be disputed.
How does bullion compare to other investments?
Gold and other bullion have proven to hold their value over time, whereas other investments are more vulnerable to unforeseen events and historical economic downturns.
While a comparison of gold with the stock and real estate markets saw the latter perform better year-over-year between 2010 and 2020, gold did better than large indices and most other precious metals during the Covid-19 pandemic. It also outshone the major stock indices during the Great Recession of 2007 to 2009.
As a hedge against inflation, platinum and palladium have reached similar values than gold in recent years. In 2019, Palladium’s value surpassed that of gold for the first time.