1 thought on “Can someone give me advice on investing in gold bullion? Is this a pretty safe investment?”

  1. Salami and Orange Juice

    Gold should not be viewed as an investment, but as an insurance policy. Gold purchased 10 years ago would have doubled in prices. That's little more than 7% interest. Gold purchaed in the early 80s and sold in the mid 90's would show a decline of over 50%. Again, it should be viewed as insurance. You should have at least 10% of your investable assets in gold.

    Owning gold will protect you in times of severe inflation, depression, recession, declining dollar, war and turmoil or the end of the world as we know it. It is at these times that the worthlessness of the dollar becomes apparent and people see the value of gold.

    I prefer the hard shiny kind rather than ETFs or certificates because, after all, you're preparing for the unknown. In an emergency, you don't know what will happen to the institutions holding those vehicles, but you will know about the gold you have stashed away. In an emergency where financial institutions are off-line and the dollar is distrusted, folks will trade goods and services for the shiny stuff.

    Do not buy "rare" gold coins. Instead buy Bullion. Bullion comes in coins and bars. Bullion sells for the price of gold + a small premium for minting. Bullion coins are generally more expensive than bars because they have the backing of the govt. that produced them, are easily identifyable and are harder to counterfeit as well. Either is good.

    American Eagles and Krugerands are 22Kt and weigh 33.9 grams per ounce.
    Bars, Austrailian Kangaroos and Canadian Maple Leafs are 24Kt and weigh 31.1 gram per ounce.
    Either contains an ounce of gold. The 22kt kind contains a bit of copper as well for hardness.

    Buy a gram scale to verify the weight of your bullion. You can find these on ebay for ~ $10.

    Store it safely and keep it quiet. With recent bank mergers, safety deposit boxes have been subject to "disappearance" and many people have lost their contents. Beware.

    Never sell your gold for anything but cash as you may find the IRS looking for their cut.

    Good luck.

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