Gold Bullion

HOW TO BUY GOLD BULLION AND WHERE TO BUY GOLD BULLION OR GOLD BARS

If you are interested in buying bars of gold you need to do some research about how and where to buy your gold bullion before you actually invest. There are a growing number of companies offering gold bullion bars online. Choosing which company is the best for you is not always easy so we have put together a list of some of the more important questions you should ask before you buy any gold online. This page is focused on how to buy gold bars but when you have finished reading you may also be interested in our page on how to buy gold coins.

ALLOCATED OR UNALLOCATED GOLD:

Most of the information on this page is based on the assumption that you are going to invest in allocated gold. This is where you buy gold which is physically segregated and is assigned to you. You will have full title to the gold in the account, with the dealer holding it on your behalf as a custodian. Your holding will be identified in a weight list of bars showing the unique bar number, gross weight, the assay or fineness of each bar and its fine weight. If you invest with an unallocated account you have a general entitlement to the gold but no specific bars are set aside for you. This is often a cheaper method of investing in gold than an allocated account. When you invest in an unallocated gold account, your investment in backed by the general stock of bullion held by your dealer. In this situation you are actually an unsecured creditor. It is for this reason that we would recommend you buy allocated gold or buy gold which you have delivered to you at home.

SOURCE OF GOLD BULLION:

Where does the gold bullion come from and if it is new then who was the refiner? All bars of Gold above a certain size (often 250g) should be stamped with a serial number and be accompanied by a certificate. With smaller bars it varies depending on the size of the bar and its source. Another thing to look for is whether or not the gold refiner is approved by the London Bullion Market Association (LBMA). This is because LBMA approved refiners have to meet very stringent quality control standards. Bars of gold from manufacturers approved by the LMBA are called ‘good delivery’ bars and can therefore be traded on the worlds professional markets.

STORAGE OF GOLD BULLION:

Not all gold bullion dealers offer you the option of taking delivery of your gold bullion and not everyone wants to store their own gold bullion. If you are not having your gold bullion delivered then you will need to know what provisions are being made for its storage. Where is the gold stored, how much does the storage cost and how is the gold audited and insured? These are just a few of the more obvious questions you should ask.

REGULATION:

Who a company is regulated by will depend on where that company is registered. UK registered companies are regulated under English law. Unlike modern financial services businesses throughout Europe and America, gold bullion dealers do not deal in paper based instruments or ‘securities’, and are therefore not regulated by the Financial Services Authority (FSA). When you buy gold from a UK registered Bullion dealer you own the physical metal. This means that bullion trading falls outside the scope of the FSA and is regulated by traditional English property law. The codes of practice of the entire London bullion market are defined by the London Bullion Market Association (LBMA). One thing you could do is check that the company you are buying from is a member of the LMBA.

PRICE OF GOLD BULLION:

When you buy gold bullion, the price will be the metal’s current spot price plus a buy fee. This buy fee will vary depending on who you buy from and the size of the purchase but can be as low as 0.8%. The fee is lower if you are buying bars or partial bars of gold which are already in the companies storage facility. If you are buying smaller gold bars so you can take delivery of them yourself you will probably have to pay a higher fee. This is because of the increased costs in producing and testing smaller bars.

Since the 1st January 2000 investment gold is NOT subject to VAT throughout the EU.

MINIMUM INVESTMENT:

Gold bars come in various sizes but the central banks only deal in 400 oz bars (about 13kg). When buying gold bars online there are a large variety of sizes available and you can buy gold bars as small as 1g. Some of the dealers mentioned on this site deal in partial gold bars. In this case parts of a gold bar are allocated to different people. Obviously this is only the case for companies that store your gold bars for you.

OUR RECOMMENDATIONS ON WHERE TO BUY GOLD BULLION:

You should obviously do your own research before you buy gold bullion. Our personal preference based on our own research is as follows. If you wish to have your gold stored for you, we would recommend BULLIONVAULT. Their commision is a maximum of 0.8% and they are regulated by British Law and are members of the LMBA. If you want to take delivery of your gold and store it yourself, we would recommend GOLDMONEY. Please note that with GoldMoney you can take delivery of gold bars in multiples of 100g only. GoldMoney is regulated by the Jersey Financial Services Commission.

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