10 Tips for How to Buy Gold Bars and Store Them Properly

So you’ve decided you want to buy your first bar of gold. We’re excited for you, and we’re here to help.

The US may have gone off the gold standard in 1971, but that didn’t change how valuable gold is to our economy. The US still has the world’s largest gold reserve, almost as much as the next three countries combined.

The thing is, buying gold can be a tricky process with a lot of pitfalls and even full-out scams. So read along as we share tips on the best way to buy gold bars and store them properly.

Why Buy Gold Bars?

Gold bars can be an excellent choice for many buyers.

First, if you want to make a significant investment in gold and can comfortably buy a kilogram, you’ll save the most on the premium over spot price, and your dollars will buy the most gold. There are smaller gold bars than that too, but if you’re looking at a serious gold bar, like a kilogram, that’s where the premium works in your favor.

Gold bars are also good if you’re looking to store value and beat inflation, but you don’t necessarily want to invest in TIPS, Treasuries, or the stock market. You want an appreciating asset, and a bar of gold can be a great place to store value.

Another one is if you’re looking to pass down wealth. Or maybe you don’t trust the financial system, or you’re looking to invest in real assets that aren’t real estate. Or you’re trying to build your personal balance sheet. Maybe you already own a few ounces of gold coins, but now you’re ready to take the next step.

Really, buying a bar is for somebody who has their goals and knows what they want. To borrow from the stock market, you’re a buy-and-hold investor. You’re not looking to do a lot of transactions.

In fact, premiums on kilo gold bars can run as much as $50 per ounce lower than the premium on American Gold Eagles. Coins carry the extra costs of minting, and some are vintage or collectible, which adds to their price. A bar doesn’t have any of that.

1. Make Sure You’re Buying Physical Gold, Not Paper Gold

Thousands of companies will gladly take your money in exchange for a gold bar. Not all of them, however, will hand you physical gold.

Paper gold can be a very useful tool if you know what you’re getting into. But there are dealers out there selling gold online, or maybe over the phone, who won’t actually send you physical gold or store physical gold for you. They’re selling you a claim to gold stored somewhere else. That’s totally fine if that’s what you’re looking for and you’re aware of it.

But think about the scale. If gold is $4,000 an ounce, a kilo is over $130,000. If you go through the entire sales process to give somebody that kind of money, you want to make sure you’re getting real gold, not just a claim to it. Unless you’re specifically after paper gold for speculative reasons, you’ve got to verify with your dealer or broker that you’re actually getting physical gold.

If you want a tangible, real asset, paper gold isn’t what you want.

2. Know Which Bars to Buy

Gold bars have four important attributes to keep in mind: purity, weight, form, and manufacturer.

Purity. Pure gold is 24 karat, which is north of 99.99% purity, with only trace amounts of non-gold material. Anything less than this is an alloy and isn’t investment quality. Strive to always purchase gold that is 24K, or .9999 fine.

Weight and form. Bars come in all sizes, from the smallest 1-gram bars up to the largest 400-ounce London Good Delivery bars. There’s also the distinction between cast and minted bars. Cast bars are rapid-production ingots with a natural gold texture. Minted bars have that classic reflective, polished texture. Choose smaller bars if you want to break up your investment or sell a portion later.

Manufacturer. Believe it or not, the company that mints the bar has an effect on its value. Owning a PAMP Suisse or Perth Mint bar means your gold is trustworthy and sought after by other investors. Gold from less reputable organizations may be harder to trade or evaluate.

3. Seek a Reputable Vendor

As we’ve hinted, the market is awash with scams of all sorts. New companies spring up every day and make bold promises.

First, do your research. The most reputable gold vendors are known throughout the industry. Shy away from those the experts don’t have a good reading on.

Second, look for some form of assurance. Check for BBB ratings and backing from financial institutions.

Finally, read the documentation and any contractual agreements carefully. With something as expensive as gold, you always want to read the fine print. This can alert you to possible issues with the company you are dealing with.

4. Consider Testing Your Gold

Working with a reputable dealer will help you avoid a lot of pain in the first place. An ounce of prevention is worth a pound of cure.

That said, a seller can put any mark they want on a bar, even a fake one. If you want extra certainty, you can test gold from home, or hire a verified third-party assayer who uses an XRF machine or acid test. That gives you a certificate of authenticity you can use to prove your gold’s quality later.

5. Take Possession Securely

Depending on the company you buy from, you will either pick up your gold in person or have it shipped by mail.

If you pick it up in person, take all necessary precautions. Make sure the gold is not visible and is stored in an unassuming container. Bring it quickly from the pick-up location to your vehicle, then straight home. Consider bringing along a friend as backup.

When shipping gold, there is a procedure:

• Insure the gold for shipment
• Get pictures for verification
• Use a padded and secure shipping box
• Track the shipment in transit
• Receive and sign for the shipment
• Verify the content

A lot can happen from A to B. Take the time to weigh the gold, check for scratches or imperfections, and consider having the gold tested at this point.

6-8. Avoid Common Gold Buying Mistakes

This is a serious purchase, so you should absolutely have a plan. A few mistakes come up repeatedly.

One is not vetting the dealer. If a dealer is pushing bars that are “limited” or “rare,” or they start upselling you, that’s a problem. The two most common kinds of gold bars are PAMP and Royal Canadian kilo bars, and those are what you want to anchor to. You don’t want to get caught selling bars down the road that a buyer can’t easily verify.

Another is not setting your budget before you start. Understand the denominations gold bars sell in. A kilogram is a lot of money, over $130,000 at today’s prices, so know what you’re buying into.

And the last one is not understanding spot price versus premium. That’s the most basic thing to get right, and many first-time buyers skip it.

9-10. Store Gold Safely

Our longstanding advice is simple: buy the physical gold and store it yourself. The form of the gold, whether Krugerrands, American Gold Eagles, or gold bars, is not as important as taking physical possession.

A kilogram gold bar is a very liquid and very serious investment. If you’re looking to store it at home, a floor safe might not be the best bet. You’d want to look into something really secure, like a heavy floor safe or a wall safe, or a safety deposit box, or maybe a professional third party.

Here’s the thing about us: our specialty is sourcing and selling gold. It is not storing it. CMI does not hold or store gold for its clients. We ship it to you. But we do have articles on this, and if you give us a call, we may be able to give you recommendations depending on where you live.

(The one exception is a precious metals IRA, which by law has to be stored in an IRS-approved depository.)

A final note on storing gold at home: never, ever store gold in a bedroom. That’s the first place a common burglar goes, looking for cash, guns, and jewelry.

If you store at home, buy a quality safe, ideally one that’s fireproof, waterproof, and tamper-proof from a reputable maker. Keep bars in a cool, dry place away from sunlight and chemicals, since pure gold is soft and scratches easily. And insure your gold, giving your provider documentation of what the bar actually is so you’re compensated for its real value.

For apartment dwellers, we lean toward a bank safe deposit box over home storage. And don’t keep all your eggs in one basket. You might store some gold at home and the rest in a safe deposit box, so if something happens to one stash, the other is unaffected.

The Bottom Line

When you buy gold bars, there’s a lot more to the process than just finding good market prices. Buy physical gold from a reputable vendor in the proper amount for your investment strategy. Insure it, and store it on your own or with a third party you trust.

If you’ve decided a gold bar is right for you, it’s worth doing a little more research before you commit. CMI Gold & Silver is a straightforward way to get access to real gold bullion. You can get started with our 1-oz gold bars from Perth Mint, Royal Canadian, and other world-renowned manufacturers.

Gold Bar FAQs

What is the most liquid gold bar size? It depends on your goals. You can see the sizes we carry and how they compare on our gold bars page.

Does CMI store my gold for me? No. We’ve been buying and selling gold and other precious metals for over 50 years, and our specialty is buying and selling, not storing. We don’t store it ourselves, but we have articles on storage that give good insight, and we may be able to recommend storage over the phone depending on where you live.

How do I know my gold bar is real? Make sure you work with a reputable dealer. That one choice avoids most of the trouble.

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Source: https://www.cmi-gold-silver.com/proper-gold-bar-storage/