5 Things to Know Before Buying Gold and Silver

John HutsonBlog

Long Term Investments

An increasing number of Americans are buying precious metals based on the latest reports with silver and gold being the most highly sought-after. At present, an estimated 12 percent own gold while more than 14 percent own silver. Nearly 10 percent have invested in both. Several considerations factor into the decision to purchase these precious metals, but one of the most prominent is their high liquidity. At the same time, their value generally tends to increase in proportion to decreases in the value of the U.S. dollar. 

What to Know Before Buying Silver and Gold

Millions of people already own gold and silver, and many more are considering adding these metals to their portfolios. If you’re among those in the latter category, it’s important to understand a few of the finer points before making a purchase. Researching and augmenting your knowledge on the subject will increase your chances of getting the most out of your investment both now and in the future.

1) How to Invest in Silver and Gold

When it comes to investing in precious metals, people in Dallas find that there are several ways to approach the matter. You can purchase stocks and bonds, exchange-traded funds, gold and silver certificates, futures, and options to name a few. Not all of them are created equally.

Experts recommend purchasing physical silver and gold. That means investing in pieces you can actually touch and keep in your possession. In many cases, those other alternatives provide no guarantee that investors actually own precious metals. They may even leave people settling for cash payouts rather than precious metals when the time comes to sell. 

2) How Much to Pay for Precious Metals

Knowing how much to pay for silver and gold to get the highest possible return is also essential. Numerous companies offer precious metals for sale, and their prices vary greatly. When you buy gold, it’s best to pay as close to the spot price as humanly possible. Spot price is the current price for which an asset can be bought or sold.

In short, don’t panic and pay just any asking price for gold or silver. Know what their spot price is at the time you decide to buy, and try not to pay more than five percent over that amount. If you pay any more than that for precious metals, it’ll be more difficult to actually make a profit when you’re ready to sell. 

3) Which Types of Silver and Gold to Buy

Additionally, you need to be aware of which types of physical silver and gold to purchase. Jewelry is a popular option for those who want to purchase precious metals. This isn’t a bad idea. After all, you can always sell those items to jewelry resellers, pawnshops, and other establishments in a pinch. It’s easy to sell jewelry to individuals via online marketplaces as well.

Still, you can’t always count on getting fair market value for those items, so you might end up losing money. On the other hand, silver and gold bars may be worth more money, but selling them can be difficult. Many authorities on the subject recommend purchasing silver and gold coins because of their inherent value and liquidity. That doesn’t necessarily mean that bars and jewelry should be left out of the mix; just consider diversifying. 

4) Where to Purchase Silver and Gold

Another key to maximizing returns is knowing where to purchase silver and gold. With precious metals becoming increasingly popular, quite a few companies and individuals are looking to cash in. That means many are selling fraudulent products. They may offer bars, coins, and other items that aren’t really authentic. They may be plated instead of solid or have cores made of worthless materials. Only purchase from trusted sources, and avoid purchasing precious metals that seem a bit too inexpensive. They may sound like a good deal at the time, but they could leave you at a loss in the long run.

5) Know When to Buy and When to Sell

Silver and gold will always have value even though their prices tend to rise and fall just like any other type of investment. It’s always a good idea to watch their prices and look for trends. Though you may not find them available at rock-bottom prices, try to purchase them when their values reach low points. Then, hold onto them until their worth surges. This will go a long way toward maximizing your returns.

Making the Most of Your Silver and Gold Investments

Keep all these points in mind when looking for silver and gold to buy. Doing so will empower you to make the most of your investment. Silver and gold are solid investments as long as you purchase the right items from the right sources. At the same time, knowing when to buy and sell will help further boost your returns. For more than 40 years, Alliance Gold & Silver Exchange has been purchasing precious metals from people in the Dallas-Fort Worth area. They’re dedicated to providing top prices and giving sellers a safe way to cash in on their silver and gold.