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The price of gold has reached record highs in recent years. While this shows how great of an investment it is, it also makes it difficult for everyone to buy bullion. This leads many people to purchase silver or spend their time seeking the cheapest ways to invest in gold.
Fortunately, there are a variety of ways to put your money into gold without breaking the bank. Entire businesses and market funds have sprung up with this as their primary focus. For new investors, though, some of these options present risks they may not expect.
At Silver Gold Bull, we know how important it is to be informed before making investment decisions. We’ll go over some of the cheapest ways to invest in gold in this guide — along with whether buying into such strategies is a good way to secure your financial future.
Are Coins or Bars the Cheapest Way to Invest in Gold?
Not everyone trying to save money on gold is looking for the cheapest route. While purchasing large quantities of junk gold may be affordable — something we’ll discuss in more detail later — it simply carries too many risks relative to buying gold bullion.
For that reason, many people’s biggest question is whether they should buy gold bullion bars or coins. Both are great investments that provide high-quality precious metals that can build value. If you’re looking for the cheapest way to invest in gold bullion, though, bars are your best bet.
There are several reasons behind this:
- Coins cost more to produce — in both private and public mints.
- Gold coins can carry added numismatic and collectible value.
- Demand for coins is higher. The U.S. Mint recently had a shortage due to demand.
Ultimately, both gold bullion bars & coins are great low premium options available to all investors. You cannot make a bad choice choosing one over the other, as they’re both suitable options.
Is Scrap Gold a Good Investment?
An increasingly popular way to invest in gold is by purchasing scrap items. Scrap gold is any item containing the precious metal that no longer holds value in its original form. A broken piece of jewelry, for instance, would likely only be worth its intrinsic value.
Scrap gold is a thriving industry because it allows us to reuse the metal. We can easily turn old items into new and beautiful products. And as one of the cheapest ways to invest in gold, it’s gained a lot of attention and excitement from budding investors recently.
Folks looking to buy scrap gold have far more options than just jewelry. Consider the following common scrap items:
- Unidentifiable or damaged coins.
- Smartphones.
- Dental work.
- Computers and circuit boards.
Unfortunately, there are some downfalls to this investment type. The biggest issue is that you’re not typically getting a gold item. You’re receiving something that contains gold. Even when you purchase broken jewelry, it’s usually not bullion-grade precious metal you’ll receive.
You’ll also find that scrap gold gets pretty expensive as the metal’s price goes up. This essentially means you’re not getting the cheapest way to invest in gold. On top of paying comparable prices for the metal, you’ll end up getting what equates to junk unless you pay for refining.
Are ETFs the Cheapest Way to Invest in Gold?
If you’ve ever heard someone refer to “paper gold,” there’s a good chance exchange-traded funds (ETFs) were the topic of conversation. These funds have a goal of tracking underlying assets. In the case of gold ETFs, their value should theoretically increase as gold prices rise.
There are a variety of different gold ETFs with varying underlying assets. Some invest heavily in mining companies, but there are a few that simply buy large amounts of bullion and store them. There are a variety of benefits to these ETFs, but most people go to them for the price. They’re easily one of the cheapest ways to invest in gold.
Unfortunately, investing in ETFs isn’t really investing in gold. There are a variety of fees that come with these investments, and poor executive decisions can drop prices even when gold performs well. The simple fact is that physical gold is the way to go.
There are simply too many risks and unknowns to gold ETFs. If you can’t ignore this option as one of the cheapest ways to invest in gold, though, at least do your research before choosing a fund.
Can I Save Money Buying Gold on Auction Sites?
When you buy gold from a dealer, you’ll always pay a premium above spot value. That’s because gold doesn’t simply come out of the ground ready to sell. There are prices related to mining, refining and production on top of dealer costs. You’ll always pay above spot in these situations.
Many people think they can get around this by shopping on eCommerce sites. After all, most of us have spent decades learning that eBay is the place for great deals. If you look at the gold available on the site, though, you’ll quickly realize it’s not selling at spot price either.
That’s because this simply isn’t the cheapest way to invest in gold. eBay charges sellers a variety of fees, and an auction format means you’ll face increased competition. This always equates to higher prices.
And considering how many online gold scams there are, it’s best to go with a reputable dealer.
Buying Gold By the Gram
When the article Economic Uncertainty Drives Gold Price To A Record High spread across social media, there were many thoughts that cross people’s minds. For those who had already invested in gold, these thoughts were likely along the lines of “I just got rich.”
Of course, there were also those who saw this as a bad thing. Many people want to invest in gold, but when prices approach $2,000 per ounce, some folks simply can’t afford it. Fortunately, no one ever said you have to buy an ounce to invest.
While they’re not advertised as extensively as their larger counterparts, gram gold bullion bars are widely available. And if you’re looking for the cheapest way to invest in gold, this is a great option. When an ounce of the metal hit over $2,000 per ounce in August 2020, the price for a gram was under $70.
There are a variety of other benefits of gram gold as well:
- They always come in protective cases, and this safeguards your investment.
- Gram gold is small and easy to store. A single bar is only about half an inch.
- While it’s tiny, it still holds the value of gold. You’ll still see the same rate of return.
- Gram gold has high liquidity because more people can afford them.
- Smaller bars have similar low premiums to their larger counterparts.
- Gram bars come in a variety of sizes (e.g., 1 gram, 10 grams, 50 grams).
While buying gram bullion bars might not be the cheapest way to invest in gold, it’s certainly one of the safest and most affordable. You get all the benefits of owning physical bullion without having to spend large amounts on massive bars.
And as you accumulate more of these small gold items, you can always liquidate them for something larger. Investing is about building wealth — not getting rich through underhanded means. As the price of gold goes up, your profits and ability to make larger investments will grow.
The Cheapest Way to Invest in Gold Isn’t Alway the Best
There are plenty of low-cost ways to buy gold. Unfortunately, you won’t always get the deal you’re expecting. Popular investment routes like ETFs won’t necessarily track the price of gold, and buying scrap materials can leave you facing refinery costs and significant profit losses.
As with most things in this world, there is no “get rich quick” scheme with precious metals investing. The cheapest way to invest in gold will rarely be the best investment. Fortunately, there are still low-cost ways to buy the yellow metal to secure your financial future.
At Silver Gold Bull, we strive to provide products to meet everyone’s price comfort level. That’s why we offer gram gold and promise to match any competitor’s online pricing. When you shop with us, you know you’re getting the best value. Visit our Gold Bullion Products page to see our offerings.
