Lucrative investment options provide investors with the potential for moderate to high-risk appetite, endless opportunities to generate regular income and build wealth. A range of investment vehicles like shares, stocks, mutual funds, and others help create a diversified portfolio to meet financial goals and objectives. However, one of the most potent investment tools ruling the investors’ preference is gold bullion. Before going further, it’s essential to understand the bullion market and what bullion means in the investment domain.

What is bullion?
Bullion comprises precious metals like gold and silver in bulk form or in the form of bars and ingots that are nothing less than 99.5% pure. Bullion is held as a reserve asset by major governments and central banks. It’s also held as reserves by institutional investors who invest money on behalf of individual investors.

Bullion is initially obtained by extracting gold from the earth in the form of gold ore. Gold is then separated using chemicals and extreme heat to get the pure bullion called parted bullion.

What is the bullion market?
The commodity markets where precious metals like gold are traded as bars, ingots, and coins are the bullion markets. It’s a market where gold and silver are exchanged over the counter and in the futures market. These markets are open 24 hours and have a high turnover rate where transactions happen predominantly via electronic means or through the phone.

Bullion is considered a safe bet to hedge against inflation that can affect its trading value. Several bullion markets are operating across the globe. The London Bullion Market is the world-renowned bullion market and is the primary one globally for trading in gold and silver.

The industrial uses of gold and silver decide the pricing of these precious metals and are considered a safe haven for investment.

Bullion banks always keep performing activities in the precious metals’ markets, including clearing, risk management, trading, hedging, and playing intermediaries between buyers and sellers. Nearly all bullion banks are esteemed members of the London Bullion Market Association.

Difference between gold and bullion
While coming to trade in gold, the same term is significantly different from bullion. Gold is exclusive, while bullion is inclusive.

Gold includes different forms of its types, including bars, coins, and ingots, whereas bullion comprises other precious metals like silver and platinum apart from gold. You can observe another significant difference when it’s said gold is traded in the bullion market. Hence, gold is a part of the entire bullion market, but it’s the most important and the most traded commodity than silver and platinum.

Trading in bullion always happens in the physical market that is entirely different from the futures market. The bullion market is where you trade precious metals, including gold, in physical quantities like coins and bars, and you talk about investing in gold even in the futures market. Trading for gold in the futures market is most preferred since there’s no worry about physical storage and theft.

Points to consider before buying bullion
Buying precious metals like gold or silver in physical form for investment isn’t as straightforward as it seems. You should ask yourself several questions after taking a comprehensive look at the details and the market conditions. The premium is only a part of the equation, and it doesn’t mean you’ll earn it back on sale.

Young and fresh investors should specifically watch out for unscrupulous dealers who trick you into buying commodities giant on premiums but low on retention value. Here are some of the most important questions to consider before investing in precious metals:

What is the best way to invest in gold and/or precious metals?
Investing in precious metals can either be through buying them in physical forms or via financial products like exchange-traded funds (ETFs). While it’s a very convenient method of investing in gold, you don’t own it, and you have no claim on it. This means you’re restricted to take the metal when the need arises. However, buying physical quantities of gold lets you own it and store it as your asset separately. There’s no risk of default by counterparty like financial institutions if they fail to meet their obligations.

Should you buy gold or silver bullion?
While the bullion market benefits both gold and silver buyers, gold bullion is a better investment option due to its significantly large liquid market. Another advantage is that the price of gold is less volatile than that of silver that is more speculative in relation to economic activity. However, investing in silver is a good option during down cycles and is easily accessible for small investors.

Should you invest in bullion bars or bullion coins?
Bullion coins are ideal investment options for investors due to their sovereign status. Bullion coins are more recognizable and easy to trade and sell for higher premiums than gold bars. Gold bars are generally harder to sell and involve higher transaction costs. However, for institutional buyers and other investors looking to buy huge quantities of gold, bullion bars are the lucrative option considering their lower premiums.

What are the best bullion coins to purchase?
Depending on the region investors are investing from, specific types of gold coins tend to be more profitable. There are investors from North America who find American Eagle and Canadian Maple Leaf coins highly profitable. Eagles or Austrian Philharmonics are the preferred choices for European investors. Irrespective of the region, investors can also choose to invest in renowned gold coins like the Australian Kangaroo coin, English Britannia coin, and South African Krugerrand coin. However, avoid investing in sovereign coins from lesser-known countries. Special edition commemorative sovereign coins are also not a wise option due to their high pricing and low resale value.

Which is the best place to buy precious physical metals?
When you want to buy gold bullion or other precious metals in their physical form, go through an online dealer offering a buy-and-store program, make sure it’s approved by non-bank London Bullion Market Association vaults. Avoid taking physical possession of precious metals, and make sure to store them in a secured vault. Precious metals stored in vaults are easier to sell since the chain of custody is intact.

The importance of investing in bullion
If you’re wondering why investing in bullion has its significance while there’s the stock market and the bond market, it all boils down to the risk factor. When a global crisis strikes, markets for stocks, shares, and bonds become very volatile. Even safe investment tools like various savings options offer low-interest rates, making it a challenge to maintain asset value. Savings accounts also provide very minimal interest. In a scenario like this, investing in bullion is ideal for a wise investor to secure financial goals and protect asset value. It becomes more critical during times when the property market takes a beating due to economic downfall.

During times of a global crisis, economic slowdown, and mass unemployment, gold bullion is a safe and reliable investment and wealth generation source.

The process of buying and storing physical gold
The touch, feel, and security of owning physical gold lures investors to choose the same over intangible investments like ETFs. Investors can buy physical, investment-grade gold at spot prices that include the price of unfabricated gold and additional costs subject to vary seller-wise. The advantage here is physical gold can be easily liquidated during unforeseen events like an economic collapse.

Investors can buy physical gold pretty easily online from authorized and reputed websites like JM Bullion, WholesaleCoinDirect.com, and APMEX. There are various choices of gold bar products available in different weights, quantities, and various prices. There are attractive offers available that are given for choosing different services and payment options. You can keep them securely in a packed condition at home or in a safety deposit locker at the bank.

While buying physical gold on auction sites, take a thorough review of the seller’s feedback and other legal information. A series of negative feedbacks regarding quality and delivery and excessive shipping and handling fees are the red flags to watch out for.

Gold to Go ATMs
Check out a revolutionary move to buy gold bars and gold coins in select world-renowned cities known for their gold trading history. Gold to Go ATMs offer investors the opportunity to buy a gold bullion of .999 in purity. It’s essential to pay attention to the spot price since ATMs sell physical gold bars and coins at comparatively higher prices than other conventional retailers. These ATMs are exclusively designed to be installed in shopping malls and airports to enable the general crowd to develop awareness and confidence in investing in gold. These vending machines regularly update their prices to market value via an encrypted internet connection.

Exclusive features of gold ATMs

• A state-of-the-art ID scanner with AssureTech validation determines the quality and the current value to create an offer instantly.
• It monitors real-time prices.
• It captures and authenticates users by examining the ID hologram.
• A video teller examines every customer in real-time to offer assistance.
• In case a technical issue arises, an automatic video call will be made to the customer support.

Pure gold
Investment-grade gold bars and coins should be at least 99.5% pure. The minute percentage is either silver or copper to enable smelting. While going to buy gold for investment purposes, the bar should feature the manufacturer’s name, the weight, and its purity stamped clearly on the face. It’s worth checking out gold bars from popular gold mints like Perth Mint, Royal Canadian Mint, and Valcambi.

Gold bars and gold coins
All types of pure gold have significant monetary value, but all investment-grade gold is not equal. Investors looking to add weightage to their portfolio and track the price of gold may well avoid gold coins. Despite their historical value, gold coins contain a lower quantity of gold and cost more due to their numismatic value.

Gold coins can sometimes alter the investment portfolio’s value due to their high price influenced by being valued as a collector’s item. While investors wanting collector items like gold coins are rare, most of them go for gold bars convenient to secure for the long term and easily convert to cash.

Other important points to note while buying investment-quality gold
Buying gold for investment purposes involves a thoughtful process, including weighing various aspects to derive maximum benefits.

Buy gold in workable sizes
It’s always wise to consider the ease with which you can liquidate gold bars whenever the need arises. If an investor has a certain amount of investment capacity to invest in multiple gold bars, it’s wise to do so rather than buy just a couple of bars. It’ll be easy to resell the lot whenever required. The investor can also sell the bars one at a time or a couple of them as and when needed. Hence, it’s always advisable to save up and buy gold bars in substantial sizes that offer maximum profits.

Consider multiple options
It pays to be aware of gold spot prices while browsing the bullion market. While it’s pretty straightforward to buy gold, prices vary greatly and include sellers’ profit margin, shipping & handling charges, processing fees, and the cost of authentication certificates. It’s wise to compare different sellers’ prices to ensure you get the best deal on buying gold bars.

Avoid rip-offs
Always check review websites and study the rip-off reports to educate yourself thoroughly about a seller’s reputation. Reputed gold sellers are required to disclose all the fees and costs involved without any hidden fees. Always be alert and watch out for sellers charging exorbitant prices. You may face difficulties while clearing the gold via customs.

Investing in gold bullion is, by far, the only investment option that increases your portfolio’s worth over time. Irrespective of the market conditions, it’s a safe and highly profitable investment option that gives investing a solid foundation to build wealth.