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TheStreet Open House

A Guide To Physical Gold Investing

For one thing, it is important to ensure that participants are indeed allowed to take possession of their metal. Since it is not uncommon for the rules to include withdrawal minimums, investors should make sure they are comfortable with any such requirements. Other important details to pay attention to are the cited risks and costs as well as the circumstances under which the gold is kept and the process for confirming its existence and taking possession of the metal.

Storing gold

Determining the best storage option involves weighing risks against costs. Paying for secure storage eats into profits from the metal's gains, so some people choose to store their gold at home or in their office. In theory, that is the riskiest option as it involves the highest potential for loss due to theft or disaster. But in many instances these risks are not substantial enough to justify the cost of other storage options.

Investors who have significant quantities of gold or whose circumstances involve elevated security risks should consider securing the metal in a depository or safe deposit box. Investors who do so should note that rates vary, so bargain hunting can pay off.

Selling gold

Just as buying gold often provides investors with a pricing wake-up call, investors who decide to sell their gold are also sometimes surprised at the prices they receive. That is because the buyback price, or bid, is lower than the asking price. The difference between the two is referred to as the spread and it is a loss that the seller initially bears.

For example, if an investor pays $1,733 for a 1-oz Canadian Maple Leaf and decides to sell it back the same day, the buying price may only be $1,693.

Furthermore, there are usually other costs involved with selling gold, including shipping, insurance and liquidation fees. Some businesses have minimum purchase requirements, and depending upon payment arrangements, it may be necessary for the investor to pay bank wire fees or postage to receive a check.

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