For centuries, gold has been a well-valued symbol of security, wealth, and timelessness. People rush to gold during trying times in history, as their investments are a haven of safety. With this interest, there is a flood of misinformation and myths associated with it, making the process of buying gold bars seem more difficult than it is. If gold has ever crossed your mind regarding adding it to your portfolio, it is vital to learn the difference between fact and myth.
In this article, we’re going to address common myths about buying gold bars so that you’ll be armed with the most important facts to know what works best for you.
It’s Difficult to Store Gold Bars Safely
Storing gold bars can be much less difficult than one might imagine. Many investors keep their gold in a home safe or a safety deposit box at the bank. Professional vaulting services can offer high-security storage options for a minor fee of 0.39% of your gold bullion’s price. By choosing the appropriate option for storage, you will be assured that you can fully secure and protect your gold without building a fortress around the assets.
Gold Bars Are Hard to Liquidate
Gold bars are highly liquid. There’s always a gold market, and you can sell bars to gold dealers, pawn shops, or online platforms. The process is pretty straightforward, and because of the global demand for gold, in most cases, you can find a buyer fast. Liquidity in gold makes it a very good way of diversifying a portfolio.
All Gold Bars Are the Same
One of the biggest misconceptionsis that all gold bars are the same. The truth is that gold bars come in different purities, weights, and even from various mints around the world. The most common purity for investment-grade gold bars is 99.99% (24-karat); however, there are bars of lower purity. Bars bear the signature of well-known mints like the Royal Canadian Mint or PAMP Suisse and are generally more trusted. The premium may be higher in their cases. Know the differences in gold bars to be assured of getting value for money.
Gold bars are only for the rich
One of the most persistent misconceptions is that buying gold bars is meant for the wealthy. This is not the case. The gold bars come in weights and sizes, from as little as a single gram to 1 kilogram and above. You could decide to start buying smaller bars and just develop your portfolio over time. All you need to do is start small where you’re comfortable—remembering that even a small amount of gold could be of great value to your investment strategy.
You Need to Buy Large Quantities to See a Return
While the underlying justification is more plausible with higher quantity purchases helping to reduce the premium you are paying over the spot price, even small amounts of gold can realize value.
Gold tends to move in the price range with economic conditions, even modest investments should offer growth potential. Buying smaller weight bars also allows you to invest gradually, taking advantage of dollar-cost averaging that lets you spread an investment over time. This way, you can gradually accumulate significant instances of gold ownership without the need for a huge initial outlay.
It Is Expensive to Insure Gold Bars
For many other investors, the cost of insurance for the gold bars that they own is a concern. While there is a relatively high cost of insurance for most valuable items, it is not as exorbitant as many fear. Most insurance companies have policies covering precious metals, and typically the premiums are based on the value of the gold.
Most vaulting services will include insurance at a price. According to the Insurance Information Institute, you may be able to have a per-piece coverage limit of up to $2,000 and an overall limit in the precious metals category of up to $5,000. By finding the best policy to suit your needs, your investment will be well covered, but won’t break your bank account.
Gold Is Too Volatile
Some investors avoid gold due to its perception of volatility in price. While it is true that the price of gold does move, in general, it is much less jittery than other investments such as equities or cryptocurrencies. Gold does indeed actually react to market conditions, and short-term jumps might be witnessed, but the long-term trend has been pretty much consistent: up.
In other words, if gold is held as an investment for a long time, short-term fluctuations can be dissipated, while its stability over time can still be enjoyed. For example, in the last 10 years, gold prices have increased 93.31 percent in the US. In doing so, gold always acts as a very important hedge against economic uncertainty and market volatility.
Buying Gold Bars Is Complicated
Many people seem to be afraid of buying gold bars, mostly because of their fear of inauthenticity, being ripped off on the price, and dealing with genuine sellers. Buying gold bars is quite simple if you know what you are looking for. First, find lists of dealers who belong to groups such as the Professional Numismatists Guild or American Numismatic Association. Second, ask for a certificate of authenticity and verify the gold’s weight and purity. Just by doing these easy steps, you will be able to buy gold bars with confidence and steer clear of several pitfalls.
Gold Bars are Only for Doomsday Preppers
The myths associate gold bars with doomsday preppers who worry about the complete crash of the financial system. Gold is one of the favorite metals of preppers, prepare themselves in case everything goes wrong. Equally so, it is a mainstream investment product that the financial experts, for the vast fortune of diversified investments, mostly recommend. Central banks, institutional investors, and people buy gold ito hedge against inflation, currency devaluation, and economic instability. For some, buying gold isn’t about waiting for the end of the world; it’s simply a savvy way to protect your wealth.
Gold Bars Are Difficult to Authenticate
Perhaps one of the largest fears people have is that it’s hard to make sure gold bars are genuine, and one could end up with something fake. However, no reputable dealer is going to take any chances with authenticity. Many gold bars come with certificates of authenticity stamped with a serial number and often, too, the mint’s hallmark. Further, with today’s technology, like XRF analyzers, it will take just a few seconds to verify the composition makeup of a gold bar. You can buy pre-owned gold from reputable sources since available technology can now give better assurance of authenticity.
