There was a time in our history when every cent of American currency in circulation was backed by gold and silver.  In the days of the gold standard, one U.S. dollar could be converted into 1.5 grams of gold.  The gold standard was suspended temporarily in 1933 at the start of the Great Depression to fight the deflation of the U.S. dollar and was quickly reinstated, but with a system in which the values of the U.S. dollar and gold would be determined by different market factors.  When inflation caused the U.S. dollar to become worth less than its traditional backing of gold in 1971, the gold standard was abandoned completely.

While the U.S. has been off the gold standard for almost 50 years, precious metals like gold and silver have not lost their value.  These precious metals are still considered a valuable commodity and many people invest in these metals by purchasing gold and silver bullion.  Gold and silver have been shown to have steady market prices over the years and many believe that these stable prices offer protection for their investment that they cannot get with the U.S. dollar that is subject to inflation.  There are many reasons to invest money into precious metal bullion whether you are protecting your money long-term from market conditions or simply converting your savings into a stable, physical commodity.  If you are interested in investing in silver or gold bullion, this guide will help you better understand the bullion market so you can make smart investments and avoid scams to reap the benefits.

What is Bullion?

Guide-to-Investing-in-Silver-and-Gold-Metal-Bullion

When investing in bullion, as with other types of investments, the idea is to buy low and sell high.

Bullion, in general, is a bulk amount of a precious metal that is considered valuable such as gold, silver, platinum, and palladium.  Regular bullion is typically sold in the form of bars or ingots, and the value is determined by weight.  It is also common to buy bullion in the form of coins.

Bullion Coins

Bullion coins are coins minted by the U.S. Mint that are made from precious metals like gold and silver.  These coins are typically bought as an investment and their value is determined by their precious metal content, as well as the market price of gold and silver.  This means that their value does fluctuate.  There are two types of bullion coins produced by the U.S. Mint:

  • Proof bullion coins: These coins are meant for collectors and they are sold directly by the Mint and come with a protective display case.
  • Uncirculated bullion coins: These coins are more for investment purposes and are made available to authorized buyers to purchase from the Mint at the market price of the precious metal, plus a small premium.

The American Gold Eagle is a popular bullion coin printed by the U.S. Mint and they are guaranteed by the U.S. government.  People do commonly invest in foreign bullion coins as well such as the Canadian Maple Leaf, South African Krugerrand, and the Australian Gold Nugget.  However, the value of these foreign bullion coins is mostly determined by the melt value of the coin.

How do I buy Bullion?

When investing in bullion, as with other types of investments, the idea is to buy low and sell high.  What you must remember however is that the prices of silver and gold are relatively stable compared to other commodities with only slight dips or spikes.  It is also difficult to predict just when the price of gold or silver will dip or rise on the market.  The stability of precious metal prices makes silver and gold a good long-term investment as these metals have a much lower inherent risk of loss as other commodities like stocks and bonds.  It is best to make an investment in silver or gold bullion when the prices have dipped so you can expect a steady rise in value.

Buying Bullion

There are several ways you can buy gold and silver bullion including purchasing funds that invest in the commodities and buying paper gold certificates, or ETCs.  The best way to invest in precious metal bullion is to buy the physical metals in the form of ingots, bars, or coins.  When purchasing physical bullion, you will have to figure out a way to keep it safe and secure, such as storing it in a safe or vault.

Where to Buy Bullion

You can buy bullion ingots, bars, and coins from banks as well as from coin and precious metals dealers.  Coin dealers like PGS Gold & Coin are staffed by professionals who are experts when it comes to the precious metals market and they can help you make a sound bullion investment.

Selling Bullion

If you are looking to sell your gold or silver bullion, there are several options such as selling to a private buyer through online methods like eBay or selling to a coin and precious metal bullion dealer.  When you sell to PGS Gold & Coin, our professionals will offer a fair price based on the current market value of the precious metal.

Avoid Rip-Offs with Bullion Investments

When looking to invest in bullion, it is important to know how to recognize scams.  There are scams out there that will try to trick people into buying bullion with false claims and shady deals.  These are the most common scams to watch out for:

  • False Claims: With this type of scam, sellers make false claims about the products they are selling. They may lie about the precious metal content of the product and even pass off regular coins as rare coins.  It is important to go to a reputable coin and precious metal dealer to avoid this.
  • Leveraged Investment Scams: With these scams, a seller will claim that the price of gold or silver is about to rise considerably and then offer to sell an amount of the precious metal for a down payment of about 20 percent. However, the other 80 percent is considered borrowed money as the institution holds the metal for you and they will charge storage fees and interest that will be taken out of your equity of the down payment.  The institution will then charge you to get your equity back up to the original 20 percent and if you refuse to pay, they will sell the metal and charge you the difference if the amount they get doesn’t pay off the loan.

These tips will help you ensure that you are making smart bullion investments:

  • Investigate the melt value of bullion coins, this information is readily available online.
  • Look up products that you are interested in purchasing to get a good idea of their value.
  • Consider other costs in relation to bullion investment such as insurance and storage options. This may affect how much money you invest in the precious metals.
  • Make sure that any bullion bars or coins that you purchase will be delivered to you and not held by a third party.
  • Ask for a certificate of authenticity when purchasing bullion bars, ingots, or coins.

Start your Bullion Investments with PGS Gold & Coin

Precious metal bullion has been shown to be a sound long-term investment and a great way to protect your assets from inflation and hedge losses.  However, you must do your research before investing in bullion so that you can invest wisely and avoid scams.  If you are ready to start investing in bullion, come to PGS Gold & Coin to talk to our experts and view our inventory of gold and silver bullion coins, ingots, and bars.  Our professionals are very knowledgeable about the market for precious metals and we will always offer a fair price for your investment.  If you are looking to sell your precious metal bullion, we will offer a fair appraisal that is also based on the true market value.

You can call PGS Gold & Coin at (888) 416-2701 or visit one of our locations in Schaumburg, Wheaton, or Palatine, IL.