Investing in gold 🪙 Best Tips 2025 USA (14 min read)
Investing in Gold
Investing in gold is one of the best ways to protect one’s wealth. Gold is a very scarce commodity on our planet. You only find it in specific places where some incredibly rare and unique physical and chemical events took place.
This makes it a highly valuable metal and gold was probably the first metal to do trade between civilizations. Over the long term, gold always kept a high value and is therefore the most consistent commodity. The demand for gold was always high and kept rising through history. Gold is the best safeguard in times of economic crisis.
There are several ways to invest in gold. The most common way is to simply buy the material in the form of gold bars or coins or jewelry. Problem is the enormous weight of the material and where to store it safely.
Another way is to buy gold in the form of shares of a mutual or exchange-traded fund (ETFs), gold certificates or trade gold as a commodity. This is the way for more experienced investors.
When you start with investing in gold you should study all the pros and cons of the various methods so you can learn more about how to invest in gold. We hope this article will contribute to your knowledge.
Advantages Investing in Gold
There are a lot of advantages of investing in gold compared to other investments. First gold is one of the oldest ways to hold your savings. And through all history gold turned out to be the most stable precious metal.
The demand kept rising and so its value. Especially in times when other assets were very volatile or losing worth, gold kept its status and became more and more popular.
Reasons to invest in physical gold
Gold jewelry like rings, necklaces, and bracelets are easy to acquire but the resale value is more uncertain.
Here is a list of reasons to invest in the physical form of gold:
- Wealth protection in times of economic instability
- It is not a complex product, everybody knows gold is valuable, it is tangible
- It can be bought and sold relatively easy compared to stocks and commodities, real estate
- An easy way to save money for later
- When it is in a safe place you don’t have to look after it
The worth is very stable and in general rising over the long term
It can be inherited after your death.
Gold investments can be a perfect method to diversify your investment assets. Last but not least: gold won’t lose its price when it gets older.
Invest in gold with small budget
Even with a small budget one can decide to invest in gold. Gold bullion coins are a good start and are payable. They are easy to buy and easy to hold. You can start collecting them bit by bit.
Is there a minimum amount to buy in gold? You can own this precious metal for as little as 50 dollars … So you don’t need to be rich to start investing in gold.
Not physical gold but mutual funds and ETFs are an easy and safe way to start to invest in gold. At a broker they can be bought and sold easily. Or via your retirement plan. The costs are low and the minimum investment also. So ideal for beginning investors.
Gold programs
There are also investment programs that help you buy a small amount of gold on a monthly basis. You can join those programs and even get rewarded by bringing in new members. That is not obligatory, it is an option.
There are also cheap small gold coins. They have a smaller size: there are ½ ounce, 1/10 ounce and 1/4 ounce variants.
Furthermore one could invest in cheaper precious metals like silver. Silver is also a stable investment. Don’t forget the saying ‘don’t put all your eggs in one basket’ and spread the risk by diversification.
Disadvantages of investing in gold
There aren’t many disadvantages of investing in gold. Gold can always be ‘liquidized’ meaning be sold quickly to gain cash.
Biggest problem is where to have the precious metal stored safely. We wouldn’t recommend storing it at home in your own vault.
So if you are planning to buy a larger amount of gold we would recommend doing it through a certified Gold Investment Company. Then you are the most sure that the gold is pure and legit. And then you know that the storage is well organized and secure. Those companies also have insurance against theft and robbery.
Of course, as with all investments, there is always a risk factor and there is no guarantee that gold will keep this role in the future.
Disadvantages
There are people who mention these disadvantages of investing in gold:
- Gold is not always pure so please buy it with a certified dealer and have your certificates.
- The cost of storage externally. Well worth it when it is safe and gives you peace of mind, we think.
- You don’t earn interest on stored precious metals.
- Other investment methods : If you invest in paper gold like shares you can earn interest.
- There are investment possibilities with higher returns but they require a certain expertise and also implicate a higher risk.
- Paper gold doesn’t have problems with impurity and cannot be stolen because it is all registered. So you don’t need costly storage.
Investing in Gold | Buy physical gold or not?
As we have seen in previous paragraphs, buying physical gold in the form of bullion bars or coins is a wise decision to have your savings in a relatively stable asset. It is not difficult to buy physical gold bars or coins and you can start with little money like 50 dollars. The thing is you have to store it in a safe place and at a bank it will have costs.
Another option as a beginning gold investor is to buy shares of companies that work with the precious metal. You can start with little share investments and if necessary these shares can be sold easily and quickly if you might need the money at once.
Physical Gold advantages
Gold investment has a lot of advantages. Let us list some:
- Gold gives you peace of mind in times of inflation.
- Gold is used for over 5000 years and was valuable during the entire history. Cryptos are very new and still have to conquer a stable place in the economy.
- Gold is in fact a form of money. No matter what currency will come and go: gold will always hold its value. Also for your heirs.
Anybody can buy gold. It is easy and you don’t need to be an expert. - Gold can be bought in a confidential and anonymous way and is part of your privacy.
- Gold is tangible and cannot be hacked or stolen or removed in a digital way. It is independent from the economy and cannot go broke or bankrupt.
- Gold storage is easy with low maintenance and little space. The costs are low.
Gold can be sold easily if you need cash. It is heavy but portable. You can take it with you. - Gold can compensate for the ups and downs of your stocks as its value tends to go up when your stocks go down.
- Gold can be stored in a foreign country with a stable government.
We think these advantages are very convincing and speak for themselves.
How is the price of gold determined?
The price of gold is not only determined by supply and demand. The Federal Reserve has a big impact on monetary policy which influences the price of gold.
And the economy and the value of the dollar have an indirect influence on the price.
The supply is diminishing and the demand keeps on rising because gold is used in jewelry, electronics, medicine and of course as an investment.
But there are several other factors that affect the price of gold.
Some unique physical properties make gold ideal as a component in electronic devices.
Gold does not corrode or oxidize. It is used in electronic devices that demand high-precision. Think of computers, phones etc.
How To Store to Avoid Tarnishing
Gold is also used in science and medicine. For example in the treatment of rheumatoid arthritis and other ailments. And let us not forget dentistry.
Another huge industry that demands tons of gold every year is the gold jewelry industry.
And then of course there is the investment market. A growing number of people are searching for ways to invest.
Gold production is also a big factor. Gold is merely found in these countries: Canada, United States of America, Indonesia, Russia, China and Australia. It is getting more and more difficult to mine the gold and that makes the production more expensive. The resources are limited and the demand is rising.
When is it the right time to invest in gold?
In times of inflation and economic crisis, the price of gold tends to go up.
There are very interesting graphs about this subject. They show that the price of gold on average (measured over 40 years) tends to be lower in the first 8 months of a year (until august) and then it rises quickly and stays high until january.
So on average you can better buy gold in the first 8 months of a year than the last 4 months. Of course this will differ every year but it is a very clear trend. So this is important to know and to act upon.
Buy gold in first 8 months of a year
Still it is very difficult to determine when would be the best time to buy gold. No one can predict the future. There are a lot of people who simply buy gold every month for a certain amount regardless of the price.
Then you never can worry about whether or not having bought it when it had a lower price. In general your buying price will be good. Still we would suggest that you buy gold only in the first 8 months of a year.
In this graph : Average gold price during the months of the year measured over 46 years.
Source: Bundesbank.
Investing in gold | Factors influencing gold prices
As we already explained in a previous paragraph, the price of gold is not a simple supply and demand matter. If you research the factors influencing those supply and demand …
Here are some factors :
The time of the year has an influence. The demand for jewelry for example has peaks in times like Christmas and other holidays.
Same thing with electronics and especially phones. Of course it is a little more complicated than that because the products first have to be produced.
In general we can conclude that in the first half of the year the price on average is lower than in the second half of the year. Then again, some years are exceptional … The more you wait, the higher the price gets: better buy this year than next year.
Young or old?
Should you buy gold at a young or old age? The younger you start the more it will be worth when you retire and the more time you have to build up some serious capital. When your older a gold investment is an option to diversify your assets.
A simple rule that is already truthful for over 50 years, you have to keep in mind: when the value of the dollar drops, the price of gold and silver goes up.
Investing in gold | Gold bullion
Gold bullion is the gold as we know it from movies : the physical form of yellow metal bars or coins. The gold bullion is generally formed into bars or ingots and has a certain purity. There are bullion bars in all kinds of sizes with different finenesses and therefore different values.
The meaning of the word ‘bullion’ is that it is a refined and exact weight of precious metal. It is relatively easy to buy this form of gold at precious metal stores, a broker or a bank.
Gold bullion and silver bullion are investments for the long term as a store of value. These forms of physical precious metals are the most common investments. It is one of the most stable ways to protect your wealth.
Gold coins have more historical and cultural value. They are more collectible items.
Potential
Before the year 1974 it was illegal to have gold bullion in our country, without a license.
Since January 1, 1975, this has changed by law in the USA. You don’t need a license anymore and there are no restrictions.
You don’t have to report to the government when you buy precious metals under 10,000 dollars. If you buy more than 10,000 dollars you have to report this cash movement.
It is advisable that the precious metal is stored in your own vault or at a bank. Still you should insure your assets. Otherwise this could keep you awake at night. When you buy a vault to install at home, you might alert the wrong people. If you own these valuable, tangible assets you could become a target of burglars. Better store it at a professional facility.
Investing in gold | Gold coins
Gold coins are bullion coins bought as an investment. One of the best selling bullion coins is the South African Krugerrand. The South African Krugerrand is a very popular coin and is ideal for investment.
Other popular International gold coins are the Canadian Maple coins and the American Eagle coins. The coins maintain a high value.
The advantages of Gold investment coins are that they are affordable and an easy way of starting with gold investing. You can also buy special collector’s coins.
But you need to have knowledge about these coins to buy and sell them at the right price. In general it is better to stick with bullion coins. The most common gold coin is the American Eagle.
Well known Gold coins
Here is an overview of well known coins:
- Gold Krugerrand
- Gold Britannia 1oz
- Gold Maple
- Gold Panda
- Small Britannias
- Gold Sovereign
- Half Sovereign
- Gold Eagle
- Perth Mint Gold
- One Ounce Gold Coins
- World Coins
- Half Ounce Gold Coins
- Tenth Ounce Gold Coins
- Gold Nugget
- Gold Buffalo 1oz
- Isle of Man Gold Noble 1oz
- Gold Guineas
- Small Krugerrands
- Gold Philharmonic
- 2 Ounce Gold Coins
- Quarter Ounce Gold Coins
- Best Value Gold Coins 1oz
- 2022 Gold Coins
- 2023 Gold Coins
- Gold Queen’s Beast
- Gold French Francs
- Gold Myths & Legends
- Gold Tudor Beasts
- Gold Tudor Beasts
- Royal Arms
- Quarter Sovereign
- Royal Mint Gold Lunar Series
- UK Currency Coins
- Isle of Man Angel
- Gold Double Eagle
- Dragon Rectangle Coin
- Isle of Man Sovereign
- Rare Gold Coins
- Two Dragons
Video Investing in gold and Gold coins
Investing in gold and Gold coins
Gold ETFs and mutual funds are always mentioned together in the same breath. With ETFs you own shares of a gold mining company. The value of the share is reflected by the price of gold. A mutual fund is a sort of package of a portfolio of stocks, bonds, or other assets.
A gold ETF is ideal for beginner investors as it is easy to obtain. You can also sell them easily. When you buy an ETF you have to consider that you have the cost, they called it an ETF expense ratio.
You can diversify by buying shares of different gold mining companies. When you buy and sell ETFs and mutual funds expect that prices might be different from the price of gold. They can be higher but also lower.
Gold futures
We also have to talk about gold futures and options. With futures and options you obtain the right to buy gold in the future for a specific price. As an investor with this kind of speculation you kind of ‘touch’ the price of gold.
With leverage you can multiply your gains but also your losses. You need enough capital to cover potential losses. Otherwise it can happen that you are forced to liquidate all options or futures.