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How To Buy Gold Safely Online
Investors who want to jump on the gold-buying bandwagon have numerous options on how to invest in the precious metal. Whether buying gold in its physical form - jewelry, coins or bars - or buying shares in a gold exchange traded fund, buyers should always fully research their options and the seller to ensure they will not be ripped off.
The price of gold has fluctuated wildly over the last year, with prices starting at $1,700 at the start of 2012, and spiking as high as $1,800 in October of that year. Despite the unpredictable change in value from one day to the next, it's never too late to invest in gold.
There are a myriad of reasons why investing in gold is a good idea. The biggest reason is that unlike paper currency, gold is not affected by inflation or global uncertainty. During times when a country's paper currency is losing value, gold will gain in its worth.
But how does one safely invest in the precious metal? One of the most popular ways to invest in gold is through online brokerages and gold-selling companies. Purchasing shares in a gold exchange traded fund, or even buying gold in the bulk form of bullion, is risky for the investor who has never done it before. It's important to follow a few rules if you plan to buy gold online for the first time.
- Hire a broker: The best way to get sound advice and a more secure investment is to make it through an accredited gold broker. The Better Business Bureau keeps a list of brokers who have proper accreditation and a solid reputation for trading and investing in the precious metal. Investors also can see any prior complaints about a gold broker on the BBB's website, as well as recommendations from previous customers.
- Know the Market Price: Prior to buying, selling or trading, it is important to know the current market price, also known as the "spot price", of gold. Websites such as monex.com list the current spot price of gold. Knowing this information will help investors to negotiate a fair price when they are buying or selling gold.
- Do Your Homework: Before clicking the "buy now" button on any gold buying or investing website, it is best to do some research on gold buying and the gold market. There are four kinds of gold investment that can be made: gold bullion, gold exchange traded notes, gold exchange traded funds and gold miner stocks. Buying the bullion form (jewelry, coins, and bars) is the safest bet. There is more risk associated with buying the traded notes and funds, and investing in gold miner stocks is the riskiest venture of all. Gold coins are the most prized way to invest because they have many uses: collector item, low bar for entering the investment market and easy to cash in. The only down side to coins is that they often have other metals mixed in, so they are not pure gold. Prices for gold coins also tend to fluctuate more rapidly than for other forms of gold. The most stable form of gold is the bar form.
- Know Your Limit: Prior to making any investment, it is best to establish a pre-set limit for spending. If the investor has $5,000 to spend, find ways to diversify your investment to make the best use of that money. If an investor has less than $2,000 to spend, it will be best to consult a broker to find the best use for your limited resources.
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