Walking into a bank to buy gold would be pretty cool. As rare as it sounds, it isn’t impossible. Here are the things you need to know.
Banks are primarily known as the best medium for storing and loaning money. However, there are many other uses of banks, and surprisingly, purchasing physical gold cannot be ruled out.
How Good An Investment Is Gold?
Gold knows its worth, and maintaining this worth is usually not a problem, at least most of the time. In the right circumstances, investing in gold is an excellent financial decision. Gold is considered a safe haven for investors and has been known to be resilient even over inflation and a depreciating dollar.
As the only currency that cannot be debased, gold is the most stable currency in the world. In a nutshell, gold is a good investment, and buying it is, in most cases, an excellent idea.
Investing in gold isn’t limited to purchasing physical gold. To act as physical gold, gold securities can be purchased. Gold securities represent physical gold but cannot be redeemed for actual gold.
Buying Gold Securities
Other than purchasing physical gold, investments in gold can be done by purchasing stock in gold miners, investing in gold ETFs and gold mutual funds, and using futures to invest in gold. These options often require expert decisions and are not usually done in a bank.
Purchasing gold securities is more straightforward than purchasing physical gold because it gives access to gold without the stress, costs, and inconveniences of storage, security, and markups.
Purchasing Physical Gold
In many cases, investors fancy the touch and feel of physical gold. Physical gold cannot be hacked or erased and can be easily passed from generation to generation. Unlike gold exchange-traded funds, owning physical gold is tangible and more secure.
Buying gold is one of the easiest things to do. Innovations and advancements have it even easier. Today, gold can be gotten through pawnshops, banks, dealers, individual sellers, and even online.
The gold-buying process is not complicated but often requires expertise, as many gold bars and coins out there do not meet the requirement to be considered “pure gold.” Quality gold should be at least 99.5 percent pure, and anything below that is considered an alloy.
Gold below 995 is very valuable, but gold with purity above 995 is worth more. The internet is the most popular and preferred place to buy gold.
After the internet, reliable private vendors and dealers are the next. Banks can be trusted to purchase gold, but finding a bank that does it can be difficult.
Gold Bars Vs. Gold Coins: Which Is The Best?
Physical gold comes in the form of bars, coins, and jewelry. However, bars and coins are the most common forms of gold bought for storage and investment purposes. Gold in the form of jewelry is mainly for decorative purposes.
Gold coins are coins made entirely or majorly from gold. They are smaller and, therefore, easier to move around. However, gold coins are easier to lose due to their small size. This means that storing gold coins can be extra difficult.
Gold coins are the best options for investors who do not have much money to purchase gold bars. Due to their relatively smaller size, gold coins are far cheaper than gold bars and, as such, are excellent options for individuals and investors who cannot afford.
Gold coins are distinct for the designs and artworks on them. Gold coins give a historic appeal and are known for their rarity. However, most of the appeals given by gold coins are more beneficial to admirers of gold than to investors.
Gold bars are better than gold coins in offering more ounces of gold for less money. For example, the price of 10 oz. of American Eagle gold bar as of the 10th of August 2022 was $19,162.70 compared to the price of 10 1 oz. of American Eagle gold coins, which stood at $20,048.50.
Other than offering more value for money, gold bars are easier to store, can be privately minted, and offer a lower average premium.
Buying Gold From A Bank
Equity trading, modern stock, and bonds, have dominated the gold-buying process. With the internet, investors can get the best deals and purest gold bars and coins just at the tap of a button. However, physical buying of gold is still a thing, and banks are just one of the many trusted vendors.
To help promote stability, prevent inflation, management of risks, and strengthen the dollar, the Federal Reserve purchases gold in large quantities. In the US, the Federal Reserve purchases gold and then stores most of it in the US Mint under the custody of the US treasury.
Even with the possession of most of America’s gold, the Federal Reserve doesn’t sell it. Instead, the US Mint uses private dealers to deliver bullions and coins to individuals and investors.
By getting gold from the Federal Reserve, some banks in the US can act as dealers. However, only a few banks sell physical gold directly to customers. Generally, banks avoid selling precious metals due to the risks of price fluctuations which can disrupt the typical banking process.
Buying physical gold from a bank is not easy. Banks do not rank among the most accessible options for buying gold.
Physical gold can be bought from the bank. Sometimes, you can even sell gold to banks. Banks like TD Bank and Scotiabank are two of the most trusted and largest dealers of trusted metals in the United States. Banks offer access to precious metals like platinum, silver, and bronze besides gold.
Pros Of Purchasing Physical Gold From Banks
Some pros of buying physical gold include:
- Buying gold from banks is the best option for people new to the market.
- It requires almost no maintenance as gold cannot wear out and will not change colors.
- It is a tangible asset.
- It requires no specialized knowledge.
Cons Of Purchasing Physical Gold From Banks
- The safety of your gold bars or coins isn’t guaranteed due to the high risks involved in handling valuable assets.
- You may pay up to twice the amount to get it.
- It may take a long time to ship gold to the local bank, as they do not store gold in most cases.
- Most banks do not buy gold. This means that selling your gold back to your bank can be difficult or, sometimes, near impossible.
Frequently Asked Questions
Q1: Where Is The Best Place To Store Physical Gold?
Physical gold is best stored in a professional vault from a bank/storage provider. Vaulted gold can be protected against disasters and theft.
Q2: Are There Any Limits To The Amount Of Gold I Can Own?
No, there are no limits to the amount of physical gold you can own. You can buy and hold as much as you can afford.
Q3: So Gold Dealers Have A License?
Yes, dealers of all precious metals are required to own a license. With a license, you can easily know which dealer is approved and which one is very likely to be fake.
Gold investments cannot go bankrupt. Today, gold is one of the best commodities to invest in; fortunately, purchasing it is not easier than ever.
Martin Thomas, the owner of Sutter Gold Mining, is a true gold investment aficionado. With decades of experience and a wealth of knowledge, he is the go-to source for anyone navigating the vast world of precious metals. Martin has dedicated decades of his life to understanding the intricacies of the precious metals market and the best strategies for maximizing returns. His expertise in this field is unmatched, and his commitment to helping others make informed investment decisions is unwavering. With him as your guide, you’ll gain a deeper understanding of the gold market and learn how to make smart investment choices that will benefit you for years. With his guidance and wisdom, you will never have to worry about taking the wrong investment step again.