How Does Physical Gold Investments Work?
You buy the gold from an individual or dealer and it becomes yours. This gives you a tangible asset to work with. You can keep it for however long you like.
There are several forms of physical gold to purchase:
Gold Bars
The typical size for gold bars is 1/10 of an ounce to 1kg. There are bigger options as well, but they are less common.There are two main kinds of gold bar called cast bars and minted bars. Cast bars are made by melting down gold and pouring it into a special ingot mould. Minted bars are made in a mint through a stamping procedure. Cast bars are cheaper while minted bars are easier to sell and tend to earn you more profit.
Gold Coins
Gold coins are made in mints. The finished product is called a gold bullion coin. These coins are much smaller than bars and ingots. They’re much easier to move around and sell but have a lower value.They also come with the advantage of being considered legal tenure in the country of their production. You can’t use them for legal tenure overseas though.
How can I Decide Where to Buy Gold?
There are a number of factors to consider before choosing where to buy gold:
Location
Obviously, you want to choose from dealers that are within your reach. You can narrow down the list by looking only at local dealers.
Online Options
You can choose to purchase from online dealers as well. Make sure to do your research before considering this option as you will not be able to check the gold before buying it this way.
Quality of Gold Production
It is essential that you find out where the gold came from. You need to know that the gold was manufactured at a legitimate location.
Premiums & Commissions
Most dealers will have a fee or commission that comes with the value of the gold. Make sure to check out a few legitimate dealers to find out whose fees are reasonable.
Check Against the Singaporean Dollar
You have likely noticed that most quotes are in USD. Make sure you convert the quote to Singaporean dollars before making a choice.
Delivery & Insurance
You also need to make sure that the gold you choose can be delivered in the way you want it to be. Make sure that it has the necessary insurance so that you won’t miss out if anything goes wrong.
Where can I Store My Gold?
There are a number of storage options once you’ve purchased your gold:
Bullion Dealers
Bullion dealers usually have a storage option available for you. When you purchase gold from them, they can store it for you with a small storage fee.
A Safety Deposit Box
Perhaps one of the most common methods of storage is the safety deposit box. Simply resnt one out and keep your gold in it.
Secured Vault
If you’re buying a large quantity of high-value gold, you may want to find a vault to store it in. This is more expensive but far more secure.
Home Storage
If your gold is a bit smaller and easier to handle, you can just store it at home. This isn’t the most secure option so make sure you have a good security system in place too.
Advantages of Buying Gold
Protection for Your Earnings
Gold is a great way to save up your earnings while also looking out for a new method of profit. The price of gold fluctuates often but tends to end up being higher at some stage within a year or two.
Ease of Purchase
Surprisingly, gold is quite easy to get a hold of with the right amount of money. Dealers and brokers are all over the place, waiting to give you great deals.
Great Emergency Asset
Should money become a problem for you or even if the Singaporean dollar should suddenly dip in value, your gold assets will not be affected.
Disadvantages of Buying Gold
Long-Term Returns Aren’t the Greatest
The value of gold goes up and down every once in a while but the overall value is quite constant. The amount of gold in the world doesn’t change, so you shouldn’t expect huge profits in the distant future.
Fees
As with all forms of investment, there are fees to consider. You will need to pay a fee to the dealer as well as extra fees for delivery, storage, security, and insurance.
You Won’t Earn Income
Investing in property offers you the opportunity to earn rent. Gold, on the other hand, offers you nothing until you sell it.
What Do I Need to Know Before I Buy Gold?
Purchasing gold is a great way to diversify your portfolio and keep some of your money in hard assets. However, gold investment comes with the same risks as any other investment.
You need to make sure you do plenty of research before making any purchases. Take note of the legitimacy of your dealer and the manufacturer that they get their gold from. You also need to make sure you can keep up with storage and other fees. Lastly, you need to know how and when your gold will increase in value so you can make a tidy profit from it at some point.
Can I Safely Buy Gold Online in Singapore?
Yes, you can! Just make sure you buy the gold from a reputable dealer. Avoid any dealer that doesn’t have clear legitimacy. Research and look into their trade associations and history before making any purchases.
How can I Make Money from Gold?
Instead of just buying and selling gold directly, you can always invest in an exchange-trade fund. These platforms check the prices of gold and buy or sell for you. There are still risks involved but it tends to be safer than doing it by yourself.
What Taxes are Involved with Gold Bullion?
If you own physical gold or silver and it increases in value, you might need to pay capital gains tax once you sell it. Contact your accountant to find out more about applicable taxes.
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