Thinking About Buying Gold Or Silver? Here’s 7 Things You Should Know.
Buying precious metals is an important decision, and it can feel overwhelming at first.
That’s why we’ve compiled this guide of 7 things you should know before making a decision to buy gold or silver.
1. What Are Your Objectives?
When people talk about buying gold and/or silver, there are several things they could be referring to. And each one carries a different level of risk associated with it.
The key distinction here is that a lot of precious metals products are actually still paper assets. Gold derivatives, Gold ETFs, buying shares in a gold mining company, etc. You are not buying real physical gold. So you still have counterparty risk with all of them, which means your investment depends on the company management. That’s why your risk increases with these types of investments.
When you buy gold and/or silver through a Precious Metals IRA or with a Direct Purchase, you are buying a tangible asset that is yours. You own it, there’s no counterparty risk, it has real value based on the actual metal. So make sure you know what you are buying.
2. What Kind Of Coins Or Bars Should You Buy?
Once you know your objective, the next question is what form your metals should take. This trips up a lot of first-time buyers, because the options range from tiny fractional coins to 100-ounce bars, and the right choice depends entirely on how you’re buying and why.
If you’re buying through a Precious Metals IRA, your options are limited to IRS-approved bars and coins. The IRS sets minimum fineness standards (99.5% purity for gold, 99.9% for silver), and only specific products qualify, like American Gold Eagles, Canadian Maple Leafs, and certain bars from approved refiners. Your dealer should know these rules inside and out. If they try to sell you something that doesn’t qualify, that’s a red flag.
If you’re making a Direct Purchase outside a retirement account, then US products will usually be your best option. Here’s why:
- Privacy: Certain legal tender coins have no dealer reporting requirements when you sell. Bars are reportable in specific quantities.
- Liquidity: Popular coins like American Eagles are easy to buy and sell because everyone recognizes them. Obscure or off-brand metals might be cheaper upfront, but your sale price will reflect their diminished appeal.
- Divisibility: Owning one large bar might feel impressive, but it means you have to sell all of it or none of it. Coins give you the flexibility to sell as little or as much as you need, when you need it.
- Value: Fractional coins (half-ounce, quarter-ounce, tenth-ounce) let you benefit from economies of scale without giving up divisibility. When you need to sell, they often fetch among the best prices in the market.
3. Where To Buy?
Where you buy matters just as much as what you buy. The precious metals market has honest dealers and bad actors, and the difference between them can cost you thousands.
Here’s how the most common sources stack up:
- eBay: You can browse from home and might pick up a bargain if a seller has no reserve. But the risk is very high. There’s no guarantee of authenticity, no paperwork, and little recourse if something goes wrong.
- Auction: Some auctions offer decent quantities, but attending is time-consuming and final prices often run higher than expected once buyer’s premiums are added. There’s also a real risk of buying illiquid metal that’s hard to resell.
- Jeweler: Convenient for a quick pickup, but jewelers typically carry a very limited stock of investment-grade coins and bars. Paperwork is rare, and when it’s time to sell, expect a vastly lower price since many jewelers value your metal at melt value only.
- Dealer: A reputable dealer (like National Gold Group) provides expertise and guidance you won’t find anywhere else. They offer a wide selection, competitive prices, proper documentation on every transaction, and often a buyback guarantee, which becomes critical when it’s time to sell (more on that in section 6).
Whichever route you choose, do your homework. Read customer reviews across multiple platforms, check Better Business Bureau ratings, and look at how long the company has been in business. And be wary of anything marketed as “FREE” gold or silver. Those promotions almost always inflate the cost of your purchase somewhere else. Nobody gives away free metals.
4. How Do You Know It’s Real And High Quality?
Counterfeit gold and silver exist, and they’ve gotten more sophisticated over the years. The good news is that protecting yourself is straightforward if you follow a few rules.
First and most important: buy from an established, reputable source. The overwhelming majority of counterfeit metals come through informal channels like online marketplaces, classified ads, and sellers with no track record. A legitimate dealer stakes their reputation on every sale and has too much to lose by passing off fakes.
Second, know what to look for. Gold and silver bars should carry a serial number and often come with assay certification from the refiner. Government-minted coins like American Eagles have precise weight, dimensions, and design details that are extremely difficult to fake convincingly.
Third, only work with dealers who adhere to a strict code of ethics and provide complete transparency in their pricing and sourcing. If a dealer can’t or won’t tell you where their metals come from, find another dealer.
5. Is The Timing Right?
This is the question everyone asks, and the honest answer surprises people: for most buyers, timing matters less than they think.
That said, here’s the current landscape worth understanding. The national debt is closing in on $40 trillion with annual deficits near $2 trillion. Inflation has run above the Federal Reserve’s 2% target for five straight years. And global uncertainty, from the Middle East to questions about the dollar’s role as the world’s reserve currency, keeps pushing investors toward hard assets as a safe haven.
On the supply side, physical gold and silver stocks have been tight for years, with demand consistently outpacing available supply. Central banks around the world have been buying gold at the fastest pace in generations, which puts a strong floor under demand.
Gold currently trades above $4,000 an ounce, and while that’s a record in nominal terms, it’s roughly in line with its inflation-adjusted peak from 1980. Silver, meanwhile, still trades well below its own inflation-adjusted high, which is why many analysts see more room to run there.
If the price makes you nervous, there’s a simple way to take the emotion out of it: dollar cost averaging. Instead of trying to nail the perfect entry point, you buy a set amount on a regular schedule. When prices dip, your dollars buy more. When they rise, your existing holdings gain value. Over time, it smooths out the volatility and removes the pressure of trying to predict the market.
Most importantly, remember that gold and silver are medium to long-term holdings. If you’re buying for retirement protection over the next 10, 20, or 30 years, whether you bought on a Tuesday or a Thursday matters very little in the big picture.
6. How Will You Sell It?
Almost nobody thinks about selling when they’re buying. That’s a mistake, because how easily you can sell, and at what price, determines whether your investment actually worked. Smart buyers plan their exit before they enter.
Here are your main options when the time comes:
- Selling coins one at a time to collectors can get you the best price per piece, especially for desirable or low-mintage coins. But it’s slow. Finding the right buyer for each coin takes patience, and if you need cash quickly, this route won’t help.
- Selling to a jeweler is the easiest option, but expect a low price. Most jewelers will value your metal at melt value or less, since they plan to refine it. You’ll leave money on the table compared to what a collector or dealer would pay.
- Selling on eBay can sometimes bring a strong price from the right buyer, but factor in eBay’s seller fees, PayPal charges, shipping costs, and the risk of disputes or returns. And don’t forget to set a reserve price, or you might watch your gold sell for far less than it’s worth.
- Selling back to your dealer usually offers the best combination of convenience, speed, and price. This is why the buyback guarantee from section 3 matters so much. When you buy, ask the dealer directly: “Do you have a buyback guarantee?” A dealer who stands behind their products with a strong buyback policy is telling you they believe in what they sell. A dealer who hesitates or dodges the question is telling you something too.
7. Where Will You Keep Your Metals?
If you’re buying inside a Precious Metals IRA, the decision is made for you. IRS rules require that IRA-held metals be stored in an approved third-party depository. You can’t keep them in a home safe or a bank safe deposit box. Doing so counts as a distribution, which triggers taxes and potentially a 10% early withdrawal penalty if you’re under 59½. Reputable depositories like Delaware Depository or Brink’s offer segregated or commingled storage with full insurance, and your dealer or IRA custodian will help you set this up.
If you’re making a Direct Purchase, you have more options, each with trade-offs. A home safe gives you immediate access but carries theft risk, and most homeowner’s insurance policies cover only a small amount of precious metals unless you add a rider. A bank safe deposit box is more secure but comes with annual fees, limited access hours, and no FDIC insurance on the contents. A private vault or depository offers the highest level of security and insurance, often with 24/7 monitoring and full replacement coverage.
There’s no single right answer. Many experienced buyers split their holdings: some metals at home for quick access, the rest in professional storage for peace of mind. Whatever you choose, make the decision before you buy, not after. And never tell more people than necessary where your metals are stored.
The Bottom Line
Buying gold and silver is one of the oldest and most proven ways to protect wealth. But like anything worth doing, it rewards preparation. Know your objectives, buy the right products from the right source, verify what you’re getting, don’t obsess over timing, plan your exit, and decide where your metals will live before they arrive.
Get these seven things right, and you’ll be ahead of most first-time buyers before you spend a single dollar.
Want to learn more about investing in Precious Metals? Talk to us today by calling (800) 719-7408.
