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The Best Places to Buy Gold: Finding Reputable Dealers
By Victor Rosario MONEY RESEARCH COLLECTIVE
Buying physical gold can be a safeguard against inflation and economic instability. Gold has been historically recognized as a safe-haven asset, typically showing an inverse relationship with the strength of the US dollar.
You can invest in gold in your individual retirement account (IRA) or exchange-traded fund (ETF), but for some, the appeal of having a tangible asset is part of the reason for investing in physical gold. Read on to learn the ins and outs of how to find reputable gold dealers.
What to know before buying gold
Not all that glitters is a good investment. Before buying physical gold, make sure to know how to tell apart a legitimate gold dealer from a scammer, as well as knowing the current spot price and purity of the product you’re buying.
Know the current spot price of gold
The price of gold is regulated by a number of entities, including banks and oversight agencies. One of the primary institutions regulating the price of gold is the London Bullion Market Association (LBMA), which functions as a reference point for the market. Before buying gold, look up the current cost of gold per ounce to have an idea of what you will pay for your investment.
Learn how you can test the purity of gold
You should ensure the gold you buy is at least 99% pure. Buying from a certified retailer should be enough to ensure this. However, there are a number of ways to test the quality of your gold if you want to be sure.
- Magnet test: Pure gold is not magnetic. If a magnet sticks to your gold bar or coin, it may not be of the purest quality.
- Ping test: When you strike it against another piece of metal, gold makes a distinct and sustained high-pitched tone.
- Float test: As a dense metal, gold tends to sink when immersed in water. If your gold bar or coin floats slightly, it could be of inferior quality.
None of these tests are foolproof and you should try more than one before deciding you have been sold an inferior product. Check with your state’s regulatory agency for more information on potential scams.
Find a reputable dealer
You can make sure you’re being sold quality gold at an acceptable price if you buy from a gold dealer. Verify if your seller is a member of legitimate gold dealer associations such as the American Numismatic Association, Professional Numismatists Guild or the Accredited Precious Metal Dealers.
Where to buy gold bars and coins
There are a number of legitimate establishments from which to buy physical gold, including licensed online retailers, banks and traditional physical retailers.
Online retailers
Online retail has become the norm, why should gold be any different? Licensed online retailers let you shop for gold products from the comfort of your own home and can sometimes have a wider selection of products than traditional brick and mortar gold dealers.
The important part is to make sure that you select a reputable dealer. Cross-reference your potential dealer’s credentials with the appropriate institutions and verify their standing with reputable organizations such as the Better Business Bureau.
Some of the best online gold dealers include American Hartford Gold, APMEX, Goldco, JM Bullion and Orion Metal Exchange.
Banks
Some banks sell precious metals, including gold bars and gold and silver coins. You can verify with the bank you do business with to check if they sell gold. If they do, you may consider it easier and safer to buy gold from them.
As federally regulated institutions, banks fall under a bigger threshold of public accountability than retailers. However, you should always cross-reference their price and compare to the market to make sure you’re getting the best deal possible.
Physical stores
You can also buy gold at a physical retail store. The advantage of buying gold from a local precious metal retailer is that you can inspect the gold and verify its authenticity before buying it. More often than not, gold at brick and mortar stores will have higher prices than online stores, as the overhead of running a physical store comes into play.
Even when considering buying gold from a local gold dealer, it is important to do your research beforehand to make sure the retailer is a reputable one. Ask questions about the factors surrounding the product, including its authenticity and purity. Don’t shy away from leaving the store if something feels off. If it sounds like it’s too good to be true, it probably is.