Buying gold for the first time: 5 crucial tips from insiders

Starting with buying gold can be exciting, especially with the current high gold prices. For a 20-gram bar you already pay more than €2,000. Naturally, you want to be sure that the gold is genuine. You also want a safe and preferably insured place to store your gold.

In this blog we give you 5 tips that you can easily apply to decide in a safe and responsible way whether you want to buy gold.

Tip 1: Preferably buy physical gold

The first tip is to preferably buy physical gold. You can also buy ETFs in gold or invest in shares of gold mines. This carries a risk because much more gold is traded on paper than is physically available.

You are buying gold as a safe haven to spread wealth risks, so you want to be sure that your gold is backed. That is why it is wise to preferably buy physical gold, possibly stored with a certified party if you prefer not to keep the gold at home (see also the second tip).

Tip 2: Buy from a reliable source

Especially with the high gold price, it is more lucrative for criminals to counterfeit gold or fail to deliver it. Therefore, always choose a recognized supplier. The Silver Mountain, for example, has an AFM license (Netherlands Authority for the Financial Markets), which is not easy to obtain. In addition, there are many reviews available about The Silver Mountain, and you can pick up the gold yourself and pay on the spot at two collection points in The Hague and Baarn.

The Silver Mountain also only supplies gold from recognized mints and refineries, and second-hand gold goes through an extensive inspection process. With parties without a license or a clear address, you do not have this certainty. Especially if you find it exciting to buy gold for the first time, it is wise to collect the gold in person and only pay when you receive it.

Tip 3: Carefully choose coins or bars

As mentioned above, The Silver Mountain only supplies gold from recognized mints and refineries that are LBMA-certified. LBMA stands for the London Bullion Market Association and is a leading standard that gold producers can obtain. The reputation and LBMA certification ensure that you know the gold is pure and that you can easily trade it again. So always choose gold from a well-known mint or refinery with certification.

Also, choose the right weight. When you buy gold, there is a margin for the dealer, also called the premium. This is the amount the dealer earns from selling the gold. A 1 kg gold bar has relatively less premium than a 100-gram gold bar. However, if you want to sell the gold later, 1 kg can be harder to trade than 10 bars of 100 grams. Choose a weight that fits your available investment budget and investment strategy.

Tip 4: Don’t focus too much on the daily price

The gold price fluctuates regularly, and it can be tempting to sell your gold or wait to buy. However, if you buy gold to diversify your investment portfolio, it is not wise to buy and sell gold frequently. You pay a premium and transaction costs each time.

Moreover, the gold price has risen fairly steadily over the past 25 years. It is therefore likely that even if the gold price dips, it will recover again. It is usually smarter to buy and hold gold than to sell it again in the short term.

Tip 5: Provide safe storage

Many private individuals choose to store gold at home. This is fine if it does not involve a very high value. Be cautious about telling people in your surroundings about your gold holdings.

If it concerns a higher value or if you find it stressful to keep gold at home, you can choose to have it stored with a professional party. For example, at Edelmetaal Beheer Nederland you can store gold for 0.65% of the value, including insurance. The drawback is that you cannot physically access your gold yourself.

Starting with buying gold

We hope that with these tips you have a better idea of what is involved in buying gold. Would you like to buy gold? Then The Silver Mountain is the right place. The Silver Mountain is a reliable and experienced company with an AFM license and physical collection points.

In addition, you can easily contact our customer service by phone or email if you have questions about the ordering process. It is important to note that The Silver Mountain is not allowed to give investment advice. It is up to you to decide what kind of gold to buy with your available budget. If you are unsure, consult a certified and independent financial advisor.

Disclaimer: The Silver Mountain does not provide investment advice and this article should not be considered as such. Past performance is no guarantee of future results.