Many people have heard about the benefits of gold. They know it is a prefe rred safe haven. They know people use it to protect against inflation. And they realize that they also should invest a portion of their wealth in bullion. What isn't as clear is what is involved in building and managing a physical gold portfolio. Spot prices and costs Investing in physical gold is often oversimplified, and the misconceptions can begin with pricing. A spot price by definition is the cost of immediate delivery and is a way to gauge how reasonable the ask or retail price is. The retail price is an amount that includes a mark up, or premium. Unfortunately, some investors only realize that spot prices are not what one pays for gold when they go to make their first purchase. In addition to the premium, there are numerous other expenses investors should be prepared to pay, including shipping, handling and insurance. There may also be processing fees or small lot fees for small purchases. In some instances, prices may be higher for individuals who choose to pay with a credit card. Then again, gold prices are sometimes lower for those purchasing larger quantities. Choosing physical gold Physical gold investors are generally looking for items that are 0.999 fine. Several products fit this description and one of the most preferred is gold coins, such as the South African Krugerrand or the American Gold Eagle. Another option is gold rounds, which are similar to coins, but are not legal tender. Both gold coins and gold rounds come in various sizes, usually ranging from 1/10 ounce (oz) to 1 oz, though other less common sizes are also available.