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precious metals basics

Basics for Investing in Precious Metals

There are two primary ways to invest in gold and precious metals – Bullion and Investment Grade Certified Coins. Though they may look alike in some cases, they are actually two different asset classes, meaning they do not necessarily go up and down at the same time.

What Is Bullion?

  • Bullion is “raw” gold, silver, platinum or palladium in coin or bar form.
  • Price is based exclusively on the weight of the metal.
  • The “spot price” of the metal is established by the Commodities Exchange (COMEX).
  • Prices can be quite volatile, similar to the stock market. Daily gains or losses of 2% are not uncommon.
  • Bullion is popular with experienced commodities speculators looking to time the market for a quick return.
  • Investment in bullion requires a high tolerance for risk, since the price can rise or fall dramatically.
  • Bullion can add short-term liquidity to a balanced portfolio for investors that may need to cash out early.

What Are Investment Grade Coins?

  • Coins are graded and certified by a third party organization (PCGS and NGC are the most widely recognized).
  • Certification guarantees the quality and condition and assigns each coin a certification number and bar code.
  • The value of investment grade coins is determined by supply and demand, just like other high-end hard assets(fine art, antiques, classic cars, etc.).
  • Investment grade coins are considered to be a more secure investment since historical data indicates much less volatility, along with a more steady return.
  • Rarity is the key factor that drives the price up over time. Selecting the right coin is key – and our firm can help you do that.

 

Watch this short video on how to diversify into and also, within Precious Metals using a strategic mix of bullion and investment grade coins.

 

 

Bullion is generally recommended for investors that may be looking for a quick return and have a high tolerance for risk, since the price can rise or fall dramatically in a short amount of time.  The most popular types of bullion include American Eagles, American Buffaloes, South African Krugerrands, Canadian Maple Leafs and refined bars ranging in size from 1 ounce to 1 kilo (32.15 ounces).

The value of investment grade coins is determined by supply and demand, just like other high-end hard assets (fine art, rare wines, antiques). Investment grade coins are generally considered a secure investment since historical data indicates much less volatility, along with steady price appreciation.

 

Not sure what to invest in?

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