Your First Purchase

Like all new investments, you should have plenty of questions before your first gold or silver purchase. Learn how to decide what makes sense for you in this article.

Which Precious Metals Should I Buy? 

Investors look for stability and security in their portfolios in a world of uncertain economic conditions and fluctuating markets. Since ancient times, precious metals like gold and silver have been dependable investments that protect against inflation and economic downturns. Making the decision to invest in gold or silver requires serious thought.

With thousands of options available in the market today, it can be difficult to distinguish between them. Knowing what kinds of products work best with your preferred strategy will make it easier for you to select the right product for your goals. 

 

Bars and Coins: What’s the Difference? 

When investing in physical precious metals, there are two primary forms: bars and coins. They have their differences, but the one thing to note is that buying larger sizes is almost always cheaper per oz/gram than smaller bars.  

Bars 

Gold and silver bars are usually produced by private refiners and sovereign mints. They are a well-liked option for serious investors because they provide simplicity and purity. Bars are available in a range of sizes to suit different investment strategies and budgets, from tiny increments to larger denominations. If you want to store a lot of wealth in a dense format, bars are the best option. 

Coins 

Coins are valuable as investments in bullion and have historical significance. Coins struck by sovereigns, such as the Canadian Maple Leaf and the American Gold Eagle, are recognized as legal tender by their respective governments. Because of their designs, use as legal tender, and desirability, coins frequently fetch higher premiums than bars.

 

Sovereign or Private Mints: A Matter of Trust 

Reselling coins and bars from sovereign mints is typically simpler. One important feature that fuels public demand for bullion from government mints is enhanced liquidity. However, there are also private mints that are well-known and have gained credibility in the industry.  

Sovereign Mints 

Sovereign government-minted coins are guaranteed to be pure, authentic, and of high quality. They can be easier to resell because they are supported by the government that issued them and are acknowledged globally. Additionally, sovereign mints add security features to their coins, like tiny engravings on the Royal Canadian Maple Leaf or a missing reed on American Eagles.  

Private Mints 

To accommodate a wide range of investor preferences, private mints provide a greater selection of sizes and designs. However, in order to guarantee the product's quality and the mint's legitimacy, careful investigation is necessary. Popular private mints well-known for their gold bars are Credit Suisse, Valcambi and PAMP Suisse; however, the future of Credit Suisse mint remains uncertain following the bank's failure in 2023. 

Collectibles or Bullion: Balancing Art and Investment 

Some coins have historical significance, are rare, or have a distinctive design that elevates them above mere objects of desire. Because collectible coins are speculative in nature, they carry a higher level of risk even though they can appreciate significantly. Before making an investment in numismatics (coin collecting), investors should carefully consider their risk tolerance and the reasons behind their decision to buy precious metals. 

It's noteworthy that a lot of people invest in rare coins as a pastime. Numismatics, lies at the nexus of art, history, and money. A buyer of vintage gold coins might have different objectives than a novice investor in gold or silver. The buyer of vintage goods might be assembling a collection for a variety of motives, such as commemorating history or paying tribute to their ancestry. For collectors of rare coins, a sizable return on investment is feasible, but it is not always the main objective.  

Bullion includes bars that are primarily valued for the monetary gurantee they contain. Since bullion bars has a lower spread and is simpler to liquidate when the time comes to sell, most investors choose to purchase it over coins. 

Size Matters: Troy Ounces vs Grams 

Troy ounces and grams are the two primary units of measurement for precious metals. One troy ounce is the equivalent of 31.1034768 grams. 

Troy Ounces: Troy ounces are the standard measurement in the precious metals industry, and they are widely used for gold and silver. Gaining an accurate understanding of troy ounces will aid in determining the worth of your investments. Every time you check the spot price of precious metals, the value of a troy ounce is displayed. The majority of well-known mints use troy ounces, the unit of measurement used worldwide, for their coins and bars. 

Grams: Since grams are frequently used for smaller denominations, some investors prefer to work with them. It's critical to convert troy ounces and grams correctly when comparing prices. The Chinese Pandas began using grams in 2016 instead of troy ounces, which is how most sovereign coins are made. 

However, troy ounces should remain the standard unit of measurement for novice investors without a solid plan. Monitoring the value of your holdings is simpler. Shopping in grams may help believers in fractional investments find better deals on premiums.    

Best for Beginners: Building a Strong Foundation 

Beginners are typically advised to start with coins minted by sovereigns or well-known private mint products because of their easily recognizable quality and resale ability. Respected sovereign mints consist of:

- The Royal Canadian Mint

- The Royal Mint

- The US Mint

- The Austrian Mint

- The Perth Mint

Novice investors might be persuaded to purchase collectible gold or silver from a sovereign mint because of their exquisite designs, sentimental associations with special occasions, or just personal taste. The Perth Mint, for instance, creates incredible commemoratives, like the magnificent 1 oz Gold Koala in High Relief from 2023.

The premium on this coin is 85%, though. With only 200 coins produced globally, this premium could increase even further if the coin becomes popular. This coin is classified as semi-numismatic. A coin such as this one runs the risk of losing appeal and seeing a drop in secondary market premium sales. We wouldn't expect novice investors to take this risk, since it would be a significant loss if they could only sell this close location in the future. In contrast, the Perth Mint Kangaroos are frequently available for a premium of roughly 5% over spot, occasionally even less. The quantity of gold you receive remains unchanged, but instead of investing in a collectible, you are purchasing a Perth Mint bullion coin. This lowers your spread, which facilitates future investment recovery. For novice investors, this is the best kind of investing.