I've been thinking about adding a small gold allocation to my portfolio, maybe 2-5% as a hedge. I use Robinhood and Fidelity for everything else and the experience is pretty seamless.
But when I started looking into physical gold (bars, coins), feels unclear where to buy and the websites seem very old fashioned. Also, lots of different prices depending on payment method, mint, brand, etc.. all for the same weight.
I also couldn't tell which sites were legit vs. sketchy or unfair. Then ,when I checked out local dealer and pawnshops, prices were just astronomical.
I ended up just buying GLD and moving on. But I still feel like I missed out on having something physical and will likely do so later this year.
Curious if others have gone through this. A few questions:
Did you end up buying physical gold, or did you stick with ETFs?
If you bought physical, how did you find a dealer you trusted?
How did you figure out which product to buy and what to pay?
Hope to get my hands on some bars soon!!
How, what, and where to buy physical gold?
byu/spuro123 ininvesting
Posted by spuro123
6 Comments
Don’t buy physical gold. Pain to store and sell just buy the ETF
Why are you so keen on physical gold…? What is this “feeling” about missing out? And what is it that you’re “hedging”?
Like do you just want gold for the novelty of it? Or what?
As far as where to buy, might depend on what country you’re in. There are certainly reputable places out there… but as an investment, IMO an ETF is clearly the way to go.
Yeah I mean ETF is very practical for large amounts. Having a few bars or coins feels good. Not just because it’s pretty and fun to hold in your hand (which it does), but because I know it will be there if the power goes out. Not a doomsdays person or prepper myself, but kind of like the idea of having it accessible.
Costco.
I hear you can buy it at CostCo, and no I’m not kidding.
I was in a similar boat recently and bought some through Fidelity, where I also have an account. I had to call to talk to someone in their previous metals department, who walked me through it all. They bought the gold on my approval, and it showed up in my account not long after. It just shows as any other line item in your online account.
Some time went by, j got a little anxious about the turnaround time for selling (you have to call back again, can’t buy or sell online) and the fees to store, which are not huge but also not 0. So I ended up calling back, selling at a small profit, and putting the money into mining companies, where it’s done much better.
Bottom line: it’s fun to pretend to be Ron Swanson for a bit but ultimately not worth it.
A lot of metal ETFs don’t have a redemption option. So the metal may just as well not be there. And in some cases, it is in fact not there, because they have purchased futures and swaps to synthetically replicate the price of metal. So you’re not really investing in metal, not even by proxy, but in paper. The difference is that the paper in the case of futures is tied to COMEX rules, which have force majeure or act of God exceptions and cash settlement options for delivery. So the fund risks not getting their metal when it matters most, eg during a bull run and exceptional circumstances. Sprott offers CEF’s with a redemption option. These are trusts which are fully backed by metal but they can often trade below NAV. Additionally some gold ETFs do give the option for delivery but not GLD to my knowledge. We also know from Wikileaks cables that the metal futures market was designed to depress metal prices, so you’re really just hurting yourself by partaking in such ETF’s that do synthetic replication.