How to buy gold online

Here are the most common ways to buy gold online.

Vaulted gold

Vaulted gold (also called allocated gold) is gold bullion that is stored at formally recognised bullion storage facilities, facilitated by the third-party vaulting company. To be true allocated gold, the gold is 100% outright owned by the gold investor. That way if anything should happen to the vaulting company, they cannot claim the gold in storage (a separate entity to the vaulting company).

Owning an allocated portion of gold saves the need to buy whole gold bars, of which a standard gold bar is 400-troy-ounce (12.4 kg). By buying vaulted gold the gold investor has physical ownership of gold, without the hassle of transporting and securely storing it at home.

Providers of vaulted gold make their money from trading commissions and storage fees. Reputable vaulting companies have a bar list, which is a publicly accountable statement listing the stock of bars by the vault operators.

BullionVault offer vaulted gold where you can buy as little as one gram at a time.

For larger orders (or if you prefer to own whole bars and coins instead of fractions of) visit BFI Bullion from Switzerland.

If you prefer to buy gold with Bitcoin then Vaultoro offer a similar service to BullionVault where you can trade with other account holders 24-hours a day.

Bullion bars

Buying gold bullion bars is the most cost-effective way to hold physical gold for self-storage. A 1-ounce gold bar retails slightly lower than the cheapest 1-ounce bullion coin.

Bullion bars range in size from 1 gram to 400 ounces (12.4 kg), though for investment purposes it’s best to buy sizes over 1 oz.

The 1 gram (.032 troy oz) gold bar is the smallest commercial size available. Its retail mark-up is a higher percentage compared to larger bars, thus it’s mainly used as a gift or novelty item. Popular 1 gram bars include the Perth Mint Gold Bar and PAMP Gold Bar

At the other end of the scale is the 400 oz bullion bar.

Gold coins

Gold coins from BFI Bullion

Gold coins (also known as bullion coins) offer another easy way of buying gold. There are several coin series produced by national mints or their affiliates that have become globally recognised as trustworthy.

There is a higher premium above the spot price compared to gold bars or allocated gold. This can be anywhere from 3% to 10% above spot, depending on the manufacturer and retailer.

When it comes to selling you may only get the value of gold on the day, so potentially less than what you paid for. The coins are not likely to become a valuable collector item in the short term, so don’t expect them to rise in numismatic value.

The advantage of gold bullion coins is that they are a universally accepted medium of gold storage and can be easily sold.

Coins are produced in a variety of sizes, from 1gram to 1 kilogram. Like gold bars, sizes from 1 ounce and above are the best value.

When buying gold coins online. Gold can be delivered to you, or some places will store on your behalf (with gold ownership in your name).

And don’t be tempted by a seemingly cheap price. No one is going to sell below the current gold price, so if it is true good to be true it probably is.

For those who would prefer to hold physical gold, then buying gold coins and bullion bars online has become a simple process. The main issues to look for are how the gold is delivered (fully insured) and having a secure delivery location.

There is also the consideration of having a secure place to store gold. It’s one thing to have a gold coin hidden in the sock drawer, but if you have a shoebox filled with gold coins you will need a secure place to store them.

BullionStar offer bullion coin delivery worldwide. They stock the world’s most popular 1 oz gold coins at competitive premiums. Gold coins include the American Eagle, Canadian Gold Maple Leaf, South African Krugerrand, Australian Kangaroo, Vienna Philharmonic, and Britannia Gold Coins.

These are the leading 1 oz gold coins that have unlimited mintage every year.

American Buffalo

Diameter (mm): 32.77
Weight (gram): 31.103
Alloy (gold %): .9999
Gold Amount: 1 oz
Buy American Buffalo

Australian Kangaroo

Diameter (mm): 32.10
Weight (gram): 31.162
Alloy (gold %): .9999
Gold Amount: 1 oz
Buy Australian Kangaroo

Britannia Gold Coin

Diameter (mm): 32.69
Weight (gram): 31.104
Alloy (gold %): .9999
Gold Amount: 1 oz
Buy Britannia Gold Coin

Gold Maple Leaf

Diameter (mm): 30.00
Weight (gram): 31.103
Alloy (gold %): .9999
Gold Amount: 1 oz
Buy Gold Maple Leaf

Vienna Philharmonic

Diameter (mm): 37.00
Weight (gram): 31.105
Alloy (gold %): .9999
Gold Amount: 1 oz
Buy Vienna Philharmonic

American Gold Eagle

Diameter (mm): 32.70
Weight (gram): 34.050
Alloy (gold %): .917
Gold Amount: 1 oz
Buy American Gold Eagle

Krugerrand

Diameter (mm): 32.60
Weight (gram): 33.93
Alloy (gold %): .917
Gold Amount: 1 oz
Buy Krugerrand

Chinese Gold Panda

Diameter (mm): 32.00
Weight (gram): 30.00
Alloy (gold %): .999
Gold Amount: 30 grams
Buy Gold Panda

Gold Numismatic Coins

numismatics refers to the study or collecting of coins, paper money, and medals.

Technically gold bullion coins can also be numismatic coins as they are collectible. For the purpose of this guide, numismatic coins refer to gold coins that are no longer in production. These coins could be anything from antiquity to bullion coins minted last year.

The appeal of numismatic coins is that they may become far more valuable in the future. The most famous gold coin (at least in terms of price) is the 1933 double eagle that was auctioned for a record price of $7.59 million.

For the most part, most numismatic gold coins are never going to reach such lofty heights. Retailers also charge a higher premium than for bullion coins, yet if you can’t find a buyer the resale value will only be the spot price of gold.

Numismatics comes with the risk of being scammed, either by fake gold coins or by worthless coins being sold as valuable. Unscrupulous dealers are always looking for newbie buyers to offload unwanted coins at an unreasonable price. Unless you are an experienced gold buyer it’s not worth starting your gold investment journey here.

Buying rare and collectible gold coins is best reserved for collectors who treat this as a hobby, or for those who have deep knowledge of the subject.

If you are looking to buy numismatic gold coins then stick to reputable online dealers to begin with. There are numerous gold sellers online on auction and classified sites such as eBay and Craigslist. While there are reputable dealers on those sites, it’s not worth the risk of buying at such places unless you know the sellers.

Gold-backed cryptocurrency

When the price of one Bitcoin surpassed the price of one ounce of gold in 2017, interest in cryptocurrencies went mainstream. There are hundreds of asset-backed cryptocurrencies on the market or in development, with gold being one of the most popular forms of backing.

A true gold-backed cryptocurrency should have an allocated amount of gold for each coin (for example 1 coin = 1 gram of gold). Like the vaulted gold services, the crypto-gold should also have publicly accountable stored gold. Make sure that the gold is 100% allocated to the coin owner, so if the crypto company should go out of business they can’t take your gold on the way out.

A gold crypto coin offers the safeguard of at a minimum being the value of the current price of gold. And if the cryptocurrency becomes popular it gets the benefit of increased value on top of the gold price.

At this point, there is no “one coin to rule them all”, or a gold standard of gold-backed cryptocurrency. In a way that is good because it would be healthy to have numerous coins competing with each other, rather than one dominant coin. To find out more about gold-backed cryptocurrency check out the comprehensive guide to gold cryptocurrencies.

Gold jewellery

Gold jewellery (jewelry in American English) is technically another way to invest in gold, and jewellery can easily be bought online. It’s not an efficient form of investment though, and definitely not for beginners.

Gold jewellery is a popular means of storing wealth in Asia. China and India account of over half of the gold jewellery market (with China overtaking India as the largest buyer in 2012).

When buying items such as gold chains, necklaces, and earrings, there is considerable workmanship that goes into such items, so there is a higher premium above the value of the gold. This can be up to 30% on the price of spot gold. Ultimately gold jewellery should be bought with the intention of it becoming a valuable family heirloom. If it comes to the time when you need to liquidate your assets, you will most likely only get the scrap value of the metal (ie the spot price of gold on that day).

That’s not to say that jewellery can’t be an investment that appreciates. There is an art to investing in gold jewelry, but it should be reserved only for those who have a keen interest in the art of jewellery. A former jeweler points out some of the common jewelry scams that unscrupulous dealers pull on unsuspecting buyers.

Another consideration of gold jewellery is that it’s not always pure gold, which is indicated by karats (or carats in UK spelling). 24-karat gold is the purest, being 99.99% gold.

The World Gold Council has a gold fineness table showing the percentage of gold per karat. For example, 18k is 75% gold. Gold jewellery is not always 24k because gold is too soft. An alloy with other metals is needed to make the gold firmer and more durable.

This presents another problem for the novice gold investor because you need to know how to identify the hallmarks stamped on gold, which is another opportunity for scammers to pass off fake gold. An experienced goldsmith can usually tell by the look and feel if it’s real, but as a beginner, you do not want to be learning this in an untrustworthy gold shop or dodgy dealer online.

BullionStar offer a safe and convenient place to buy gold jewellery and gold bullion jewellery.

Gold Exchange-Traded Funds (ETFs)

Gold exchange-traded funds (ETFs) are exchange-traded products traded on stock exchanges that aim to track the price of gold. Gold exchange-traded products do not always hold the same amount of physical gold that equals investors’ deposits.

As an ETF investor, you do not own personally own the gold. Instead, you are a beneficiary of a debt owed by the trust, which is backed by gold. This is an important distinction if you want to physically own gold in your name.

Gold ETFs (also known as mutual funds) are traded on the stock market, so they can only be bought and sold during stock-market hours.

Like an index fund of shares, the funds may not hold the exact amount while the price fluctuates during the day. There is also a question of if gold is being used by fund managers to secure other interests.

The largest gold ETF is SPDR Gold Shares, managed by State Street Global Advisors (SSGA). This ETF is listed as SPDR Gold Shares (GLD) on NYSE Arca. At one point it was the largest exchange-traded fund in the world, and today the fund remains as one of the largest holders of gold in the world.

With the rise of vaulted gold services that offer 100% allocated gold, ETF’s have become a less appealing way of buying gold without physically holding it. Individual investors are better off staying with the likes of BullionVault, where you can trade 24-hours and claim 100% ownership of your gold.

Gold Certificates

A gold certificate is a certificate of ownership of gold, usually issued by banks or mints. The gold certificate was a form of currency in the United States from 1863 to 1933 (up until the Gold Reserve Act). Like savings accounts at banks, there is no guarantee that the bank holds all the gold issued on a certificate should every certificate holder cash out.

Gold certificates were a way of holding gold without having to store it, which was a problem that gold ETF’s and then allocated vaulted gold accounts solved. This is now an archaic way of buying gold, but they are still available and it’s another way of buying gold online.

One of the leading issuers of gold certificates is the Perth Mint of Western Australia (wholly owned by the Government of Western Australia). The Perth Mint Certificate Program (PMCP) is a certificate issued by The Perth Mint stating the amount of gold held. The certificates are only issued via approved distributors listed on the Perth Mint website. Contact these agents to find out the procedures for buying gold certificates online.

Bullion vaulted with The Perth Mint Certificate Program can be bought through GoldCore.

Gold Mining Shares

Another way of gaining exposure to gold is by investing in the actual gold mines. Maybe you already do without knowing it. For example, if you own shares with Freeport-McMoRan in the US or BHP Billiton in Australia then you already own shares in a gold mining company. If you have any kind of investments in index funds then you most probably also own a slither of shares in a gold mine.

Shares in gold mining companies are especially popular on penny stock reports. These are usually new mining companies that are still exploring gold deposits, and their share prices are low (pennies per share). The idea here is that they find a massive gold deposit and their stock prices explode. This is a speculative investment and the potential high reward comes with high risk.

Note that if you own shares in a gold mining company you never actually own the gold that is mined. You are investing in the potential rise in the price of the shares and for dividends.

Sovereign Gold Bond

A Sovereign Gold Bond (SGB) is an Indian security denominated in grams of gold. The bond is only available for residents of India and is issued by the Reserve Bank of India on behalf of the government of India. It’s listed here as it’s an unusual investment model worth knowing about (perhaps the only investment model of its kind in the world).

Investors pay the issue price in cash, and the bonds are redeemed in cash on maturity. The bond is like holding physical gold, so the value may have increased or decreased at the end of your term. An SGB differs from holding gold in that it also pays interest.

India has strict laws on holding and importing gold. In 2019 the government increased the import duty on gold to 12.5%, which has also increased gold smuggling. Holding gold in India is also subject to income tax, so these reasons are why a gold deposit account is able to pay interest.

For Indian residents who would like to buy gold online in India, you can buy gold bullion online with BullionVault. Account holders can transfer up to USD 125,000 per financial year without paying a gold import duty and sales tax. Gold can be stored in Zurich, Singapore, London or New York.

How to store gold – vaulted gold or physical gold?

A question asked by new gold buyers is how to store gold. Should you trust a third party to hold your gold, or should you store it yourself?

This is a recurring debate in the gold-buying community. Holding your own gold is often brought up by gold bugs to protect yourself from buying fake gold (or paper gold).

Certainly, this was the case when the only alternatives were gold certificates and ETF products that didn’t guarantee ownership. This is not an issue now with the vaulted gold services firmly establishing themselves as an alternative to storing gold.

The main question you need to ask yourself is if you are confident in securely storing gold yourself. The security risk of holding gold has long been a negative for gold as an investment. There are enough stories of people who have had gold stolen from their property to make you concerned for your own safety.

If thieves could get away with stealing a 100kg gold coin from a museum in Germany, do you feel confident enough to store gold in your own home?

While the world’s super-rich are hoarding physical gold in underground bunkers, the average investor can get by with a hidden vault at home. Consider getting an in-wall or in-floor safe installed professionally.

Despite these drawbacks, many people prefer to have physical possession of their gold. In the worst-case scenario of an uninsured vault being robbed, or a bank or government collapse, you have immediate access to your asset. There is also the precedent of the United States forbidding the hoarding of gold coin, gold bullion, and gold certificates in 1933. While that was an unprecedented time in history, it remains an example for the case of having gold hidden away.

Buying gold “offline”

This is a guide for buying gold online, so it doesn’t cover buying physical gold at places where you can walk in off the street.

This option is best if you prefer not to have gold delivered by mail, or if you want gold immediately. When buying gold from a shop for the first time, make sure to research reputable dealers first.

Gold stores and dealers with shopfronts are being listed in the gold dealers directory.

How to buy gold online

A guide to buying gold online

Where to buy gold online

BullionVault

BFI Bullion

BullionStar

Vaultoro