Browse frequently asked questions, terminology and advice on gold and silver investing and other precious metal investments.
Gold & Silver Investing FAQ
Is it best to buy silver, palladium, platinum, or gold?
The truth is that, whichever metal you invest in, the market will always fluctuate. Here are some fundamental rules to follow when buying:
1) Minimal transaction fees mean added value for you. It is wise, therefore, to buy bullion with a small spread, meaning the closer the bid price and the asking price, the better.
2) Stay with well-known and universally tradable products. (Generally the bullion we keep stocked is a wise bet!) Steer clear of unusual and risky metals, this will ensure you have a buyer when you want to sell.
3) Don’t necessarily buy big, as you won’t be able to break down what you’ve bought. Instead you can invest in fractional coins, which are smaller and as such will allow you to do business of whatever size is convenient. For example, the 1/10 oz. American Gold Eagle coins.
When making the choice of either gold or silver, you don’t need to worry too much; we have seen throughout history that popular metals will always have a market. If you’re still not sure, don’t hesitate to submit your details via the gold investment form on our home page for a free consultation to help you understand which precious metal is the perfect fit for you.
When should I begin my precious metals investments?
According to the economic failures of times gone by, as well as those of the present day, we would say that now really is the time to invest; the political and economic situation is growing ever more unstable, and worries of a market crash are not irrational. Throughout history, however, we have seen that precious metals are a commodity which hold their value very well and which produce a far higher return than most other stocks.
What is a good amount to invest in precious metals?
In general we view 15-25% of an individual’s wealth as being a wise amount for investment. This is, however, disputable and you may receive various different suggestions from other sources. It is important to remember that this rule cannot be applied to all situations, and if you feel you would prefer to invest more, that it’s always wise to speak with your accountant or financial advisor. If you’d like to learn more about precious metals investments, get in touch!
Am I just purchasing “paper” silver and gold or “physical” silver and gold?
You will be buying physical silver and gold, which can either be delivered to you personally, or to a storage place of your choice. BGO can suggest a number of depositories which are insured fully.
Which options do I have when buying physical metals?
Most people look through their Precious Metals IRA choices, but you can also make cash purchases to be delivered at home. A common query is with regard to the American Eagles coins. These coins, along with a variety of other bullion products are given value based on their weight and metal content, as well as purity. One of the most financially wise ways to invest would be in bullion, being easily movable and very liquid in terms of physical assets.
Is there any chance that the government will confiscate my gold?
It’s highly unlikely. The cases of confiscations happening were generally under President Roosevelt’s ‘Gold Confiscation Act’, which occurred as a result of a nationwide banking crisis in 1933. This act was, however, revoked within its first year, being extremely unpopular, as well as very difficult to enforce.
It often happens however, that gold vendors will spread rumors of gold being confiscated etc. as it allows them to keep the price of antique coins higher. They may say that their coins have no risk of being confiscated, therefore putting forth an implication that modern bullion coins are somewhat at risk. In this way, they are able to sell the antique coins for more than their actual worth.
At the end of the day, if a gold call-in were to happen, none would be safe. By law, the government may take any gold it finds. Most experts, however, say that it is incredibly unlikely that another gold confiscation will take place.
How is a troy ounce different from a regular ounce?
The difference is that “troy ounces” are used to weigh precious metals, whereas regular or “avoirdupois” ounces are used to weigh non-precious metals, such as iron, copper, etc. When speaking in the context of precious metals, the terms “ounce” and “troy ounce” are interchangeable, and refer to the troy ounce, which weighs an approximate 31.104 grams. The regular ounce, on the other hand, weighs an approximate 28.5 grams.
When are the precious metals markets “open”?
You can either order over the phone or online.
Will all my personal and financial information be safe?
Certainly, any personal information will be securely transmitted via SSL web pages. These pages are encrypted to ensure that no personal financial or identifiable information is made available to anyone other than you, your bank, or the processor.
Can I clean my precious metals?
It is always best to keep precious metal products in the same condition in which they were received. Bullion can dull or oxidize over time, but that should not affect the bid or offer price you get when selling to a dealer. Store your metals in a dry, cool place and let them be.
Are there any educational resources available?
We have a Gold Investment Guide, containing a vast array of information pertaining to all things precious metals, which is particularly helpful to those just starting out on their investment journey. On our website you will find one page dedicated to silver prices, which includes a spot price chart, and you will find another page with gold prices and a ten year history of price fluctuations, as well as much more.
Where are you situated?
Our headquarters is based in “New York”. The address is 244 5th Avenue, Suite C201, New York, N.Y. 10001, USA Please take note, this is our corporate address, it is however, not our physical address.
Is there some kind of guarantee ensuring that what I am buying is genuine and meets regulatory standards?
A variety of precious metals products do come with authenticity certificates. Besides which each bullion round or bar has its own stamp of approval in the form of a maker’s mark, as well as an indication of weight and fineness. A certificate from whichever refiner or mint produced it ensures ease of assay, trade, and sale of the bullion.
Would it be a better idea to buy small bars and coin or large bars?
You must decide for yourself, but here are some great guidelines to help you decide, Bars classified as ‘large’, include 100-ounce palladium bars, 50-ounce platinum bars, 1,000-ounce silver bars and 100-ounce gold bars. These bars in general have smaller bid/ask spreads, and lower premiums, which means that when buying, they are the lowest cost alternative. They can only be liquidated in large units, however, and require larger investments. Delivery can be a challenge, and when redelivering, you may be required to have the precious metals assayed and refined. Storage costs are another consideration which must be considered.
Small bullion bars and coins, on the other hand, generally have larger bid or ask spreads. On the plus side, they can be exchanged in small unit sizes, usually don’t require assay when being redelivered for liquidation, and are easy to ship, as well as being easy to store in any safe deposit box, or commercial vault.
What is it that makes precious metals “precious”?
What is the definition of a precious metals IRA?
IRA stands for Individual Retirement Account, and consists of silver, platinum, and gold, instead of bonds, stock, etc.
Why is it a good idea to get a precious metals IRA?
There are numerous tax benefits which come with having your investments in precious metals IRAs. First and foremost, it allows you to experience tax-free and tax-deferred growth on your investments.
How would one go about setting up a precious metals IRA?
Complete the form on the right side of the page and an IRA partnership custodian can start an account. Put the funds into your account, and tell them your intention to buy IRA-approved precious metals. When the account is funded, your order will be processed.
Which products are eligible for IRA?
IRA-eligible products must have a purity level of at least 99.9%.
On offer at the moment, we have the following IRA eligible items:
- Canadian Silver Maple Leaf coins
- Austrian Gold Philharmonic coins
- American Silver Eagles coins
- Gold Buffalo coins
- America the Beautiful coins
- Austrian Silver Philharmonic coins
- Canadian Gold Maple Leaf coins
- American Gold Eagle coins
- All 24k gold bars and coins or .999 fine silver bars and rounds which come from NYMEX or COMEX approved suppliers.
Is there an annual contribution limit? If so, what is it?
If you are 50 years of age or older, you can contribute a maximum of US$6,000 a year. If you are younger than 50, the maximum you can contribute is US$5,000 a year.
What fees are involved?
This differs depending on which custodian you choose. Generally speaking, there is a beginning setup fee, a yearly fee, and most often, a storage fee.
Is it possible for you to deliver my investments to me?
It is IRA policy that investors may not be in any way involved with the delivery of, or take possession of their contributions. All products are directly shipped to the depository of your choice. If you decide you would like to take delivery, tax ramifications would apply as it would be considered a distribution.
How is a self-directed IRA different to a normal IRA?
The two are more or less the same. What sets the self-directed IRA apart is the set of investment options available. The majority of IRA custodians allow only approved bonds, mutual funds, CDs, and stocks. A self-directed IRA custodian on the other hand, allows all those types of investments, as well as private placements, real estate, tax lien certificates, notes, and many others.
Is there an option for me to have more than one IRA?
As an investor, you can have multiple IRAs, however the yearly contribution limit remains the same for the total of your IRAs as it would be for one.
How could I purchase bullion and then place it in an IRA?
The main distinguishing factor of a self-directed IRA is the fact that you get to decide how you would like to invest your IRA funds. You choose the amount of silver, gold, or other IRA-approved precious metals that you would like to invest in.
You can choose from a variety of IRA eligible coins, rounds, and bars that can be used to diversify your portfolio. After an account has been set up and funded, we’ll deal with the purchasing of bullion for you at the best rates available, and with depositing it into your IRA.
Owing to the improving market, it is likely that your retirement funds could be significantly boosted in the next few years if you convert your existing IRA funds to precious metals.
Will there be any tax implications?
No, transferring assets from one qualified retirement plan to another one has no tax implications.
Can I use a contribution to open a new IRA?
Yes, there is the option of using a contribution to open a new IRA, but the limit on your annual contribution will remain the same.
Can I use my current IRA or 401k to invest in precious metals?
Yes, using an IRA or 401k is permitted under certain strict IRS conditions, as long as the current custodian or trustee is prepared to administer the investment.
How will my precious metals be stored?
There are two types of storage available, depending on your chosen IRA service provider; either segregated or non-segregated storage. With non-segregated storage, precious metals of the same kind are mixed together since they are identical in terms of weight and purity, while segregated storage means that the specific coins or bars that you purchase will be stored separately from other customers’ items.
What is the meaning of “any year” when applied to coins?
If a coin is designated as “any year”, it indicates that the coin that you buy from us will be from a year of our choosing.
What is meant by a “troy ounce”?
Whereas a regular (or “avoirdupois”) ounce has a weight of approximately 28 grams, and is used in measuring base metals, the standard measurement of weight for precious metals is called a “troy ounce” and represents 31.1034768 grams. In the precious metals trade the words “troy ounce” and “ounce” are used interchangeably.
What is the meaning of a Common Date coin?
Coins that have been produced in large quantities over a number of years are called Common Date coins, and are also termed “generic gold”. Since they are not directly linked to a specific commemorative event, they tend to have a relatively predictable value and are often considered a sound investment.
What is meant by an “Assay”?
An “Assay” means a test undertaken to determine the type, composition and purity of a metal.
What is meant by “FV”?
“FV” stands for “Face Value” and indicates the legal currency value assigned to a coin by the mint that produced it.
What does the “Mintage” mean?
The “Mintage” of a coin denotes the volume of coins produced from a particular series or in a given year.
What is the meaning of a “Mint”?
A “Mint” is a facility that produces bullion. A government mint generally produces a country’s official currency, while private mints produce bullion in the form of bars, rounds, medallions and bullets.
What is the meaning of “Obverse”?
The term “Obverse” denotes the front face of a coin, as opposed to the “reverse”. The obverse often contains a coat of arms or the profile of a prominent person’s head, and is commonly known as ‘Heads’.
What is the meaning of “Reverse”?
The “Reverse” of a coin is its rear face, as opposed to its “obverse”. It is commonly known as ‘Tails’.
What is the meaning of “Premiums”?
“Premiums” denote the fixed dollar amount by which a precious metal products exceed the spot price (or market price) of their underlying commodities. Also known as “Premium Over Spot”.
What is the meaning of a “Proof”?
A coin which has a mirror-like finish resulting from a special minting process is known as a “Proof”, and it is usually considered a collectible.
What is meant by “Purity”?
The percentage of the relevant precious metal within a piece of bullion is termed its “Purity” (see also “Fineness”).
What is the meaning of “FS” when applied to coins?
A precious metals “Refinery” is an installation where metals are refined or reduced to their purest state.
What is the meaning of “ER” in relation to coins?
“ER” stands for “Early Release”, the designation given by the Numismatic Guaranty Corporation (NGC) to coins received by it or by a NGC-approved depository within the first 30 days of the release date of that coin.
What is the meaning of “spot price”?
The current market price for a troy ounce of a raw precious metal such as silver, gold, platinum or palladium is its “spot price”.
What is meant by “MS” grade?
“MS” stands for ‘Mint State’ and refers to a coin that is in superior condition. Grading companies often use this grade, which ranges from MS60 through MS70.
What is meant by “BU” grade?
“BU” stands for ‘Brilliant Uncirculated’, referring to a coin that has never been in circulation and that exhibits only very minimal wear. It might also be graded with the term “Uncirculated” or “Mint State”.
What is meant by “AU” grade?
“AU” stands for “Almost Uncirculated’, referring to a coin with only slight wear and circulation, and 95% of the original design being present.
What is meant by “XF” grade?
“XF” stands for ‘Extra Fine’, indicating that there is only light wear exhibited on the coin, with 90% of the original design being intact and with flaws and scratches only on the highest points of the coin.
What is meant by “VF” grade?
“VF” stands for ‘Very Fine’, indicating that as much as 25% of the original design on the coin has been smoothed.
What is meant by “F” grade?
“F” stands for ‘Fine’, indicating a coin that exhibits major signs of wear, with up to half of the design having been smoothed.
What is meant by “VG” grade?
“VG” stands for ‘Very Good’, indicating that the coin exhibits significant signs of wear throughout.
What is meant by “G” grade?
“G” stands for ‘Good’, indicating that as much as 90% of the original design has become smoothed. A “G” coin will appear heavily worn.
What is meant by “Cull” grade?
A coin that is in an extremely poor condition and is therefore considered non-collectible, is referred to as a “Cull” coin.
What different types of bullion are there to choose from?
There are a number of different forms of bullion available; Bullion in the form of bars, rounds, bullets and coins. Bars and rounds are mostly produced by private mints and tend towards having a lower premium, since they are not considered currency. Bullets are modelled after gun cartridges but are not intended to be used as ammunition. Coins generally have a higher premium than the other forms of bullion; they are legal tender and are usually produced by government mints.
What are the advantages of buying gold bullion online?
What are the main reasons for buying bullion coins?
With modern bullion coins you can own investment grade (from 0.90 to 0.9999 fineness) legal tender gold coins with a small premium compared to the spot price of gold quoted on market exchanges. The value of bullion bars and coins follows the bullion price, being almost entirely determined by the gold price.
Gold and silver bullion coins are minted in numerous countries, including the US, Canada, Austria, Australia, South Africa and the UK. Most are minted in 1/10oz, 1/4oz, 1/2oz and 1oz formats, although some are available in 2oz, 10z and 1kg form). By far the most popular form both for small investors and HNW individuals are one ounce bullion coins such as the Britannia or the Krugerrand. The divisibility of these legal tender bullion coins, whether in private possession or in depositories, is a valued advantage.
What is meant by a “certified” coin?
A “certified” coin is one which has been graded and authenticated by the Numismatic Guaranty Corporation (NGC) or the Professional Coin Grading Service (PCGS). It is graded on a scale of 1 through 70, with 70 indicating a coin that is in perfect condition. The “certified” coin is then given a serial number for verification and sealed in a plastic slab.
What is meant by the term “junk silver”?
This term is used to refer to any silver product containing 35% through 90% silver (for example, pre-1965 issue dimes, quarters and half-dollars). The composition value of such a product is greater than its collectible or numismatic value.
Which is better to buy; gold, or silver, or both?
Diversifying your investments is recommended as the best option, buying gold, silver and other precious metals, as well as copper. Whatever your budget, we at BGO can accommodate it with the variety of sizes we have available.
What is the American Eagle?
Explain why a Gold Eagle weighs more than its size indicates?
To make a gold coin more durable, a small percentage of silver and copper, totalling 8.33%, is added to the gold content. A 1oz American Gold Eagle is therefore made up of one troy ounce (approx 31.1g) of gold which makes up 91.67% of the coin’s weight, plus approximately 2.8g of silver and copper. Therefore the total weight of the coin is approximately 33.9g, or 1.09 troy ounces, of which a full 1oz is the gold you have paid for and expect to receive!
Why is there no mintmark on my American Eagle?
The mintmark, “W”, standing for the US West Point Mint in New York, is only applied to proof and burnished versions of the American Eagle coin.
What differentiates “PGCS” from “NGC”?
The Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation (NGC) are the two best-known and most respected independent coin grading companies based in the United States. They are third party services that undertake the grading and certification of coins. For example, PCGS MS70 and NGC MS70 are the gradings given by the respective companies to coins in Mint State Perfect condition.
Why is the value of antique gold coins so much higher than bullion of the same weight?
Owing to their rarity, antique gold coins often have substantially higher inherent numismatic value compared with bullion coins which, in the US at least, are deliberately meant to not have numismatic value, since they are not intended for everyday use. Older gold coins such as the old gold eagle, were mostly in circulation at one stage, and, as antiques, will be valued according to their condition, rarity and market demand.
Be aware that some dealers may try to scare you into buying collectibles, from which they make more profit than bullion coins, by suggesting that the government might decide to confiscate bullion.
We recommend, however, that unless you are a serious antique collector, you go for simple gold bullion coins like the American Gold Eagle.
How does a PF69 coin differ from a PR69 coin?
Both coins are proof coins having a numerical grading of 69 on the Coin Grading Scale. PF is the designation used by the Numismatic Guaranty Corporation (NGC), to denote proof coins, while PR is the designation used by the Professional Coin Grading Service (PCGS).
How does “DCAM” differ from “UCAM”?
Both terms designate coins that have strong frosted devices against clear, mirrored fields. The terms are interchangeable, but DCAM (Deep Cameo) is the description used by the PCGS and UCAM (Ultra Cameo) is used by the NGC.
What does the term “fineness” or “purity” of a precious metal mean?
The term “fineness” relates to the purity of a precious metal and is measured in parts per thousand, being the proportion of pure precious metal actually present in the refined product in comparison to any remaining alloys. Thus a gold bar that has a fineness of 999.9 (parts per thousand), also described as “four nines”, will be 99.99% pure gold.
How do bullion coins differ from rare or “numismatic” coins?
Bullion coins, because they are struck in massive quantities by government mints as legal tender in their country of origin, have a slight but not significant premium over the spot (or intrinsic) value of their metal content. Their value moves in accordance with price fluctuations in their underlying commodity (e.g. silver, gold, platinum or palladium).
Rare or “numismatic” coins can potentially be far more valuable than the value of any precious metal they contain owing to special collectible qualities such as uniqueness, scarcity, historical significance or individual beauty.
Who produces the silver and gold coins and bars?
Silver and gold bullion programs are operated by numerous countries around the world. American Silver Eagle and American Gold Eagle coins are struck by at the US Government mint, while the China Mint produces Silver Panda and Gold Panda coins, the South African Mint strikes the Krugerrand, and the Royal Mint in Britain makes the Gold Sovereign.
Will an Assay Certificate be provided with my bullion?
Yes, Assay Certificates are supplied with larger bullion bars, which are individually cast and stamped with a unique identifying serial number. Some small bars (1g to 100g) and some minted coins, although they are not stamped with individual serial numbers, are furnished with numbered Assay Certificates sealed in clear plastic cases with the item
What is your opinion relating to gold stocks?
We believe that gold stocks do have a place in a client’s portfolio, but emphasize that they should not be viewed as a substitute for actual ownership of gold in the form of physical bars and coins. Stocks should rather be considered an addendum to a portfolio that already contains a sound diversity of gold bullion and coins. Stocks are subject to a number of different market and non-market forces that can have unexpected outcomes, while the value of gold bullion and coinage is linked directly to the price of the precious metal alone.
What is your opinion on gold futures contracts?
Leveraged exposure to the market make futures contracts among the most speculative of options in the investment market, since market movements become highly amplified. Most investors in futures markets tend to lose out, so for anyone wanting to hedge against risk, ownership of the precious metal itself is definitely the better route to take.
What is your opinion regarding ETFs?
Since it is difficult to actually take delivery from ETFs (Exchange Traded Funds), they are considered more of a price bet than genuine ownership of the relevant metal. Because of this even hedge fund managers have been moving away from ETFs, with ETF sales dropping off sharply in 2011 at the same time that investments in bullion and coins for physical delivery rose dramatically.
In summary, what would be the best strategy for the investor wanting a safe haven?
In order to protect yourself against stock market weakness, inflation, deflation and potential currency problems – that is to say, in order to hedge financial uncertainties, only one portfolio item is certain to serve you under most circumstances and through all seasons and that is gold – whether in bullion or coin. Be sure to do due diligence on any company that you consider doing business with, and ensure that the ownership vehicle you decide on will truly meet your aspirations and goals.