Investing on gold can be exciting, but there are several ways not to buy gold. Believe it or not, there is a right and wrong way to purchase gold! To make sure that you stay on the safe side, it is crucial that you should be aware of what you are dealing with. Here I am discussing 4 ways you should not follow while buying gold.
1) Don’t pay too much
The most important factor while buying gold is not overpaying. On the day that you purchase your gold, be sure that you are aware of the spot price. This information can be checked online at a variety of sources, including our Current Gold Price page, without any hassles. The typical markup over the spot price is 5-8%. If the asking price is more than the typical markup, never buy it.
2) Don’t consider the historical value
A lot of people make the mistake of purchasing coins for their historical value. In this situation, this is the wrong route to take. Keep in mind that coins of this type will not have any value other than their melt value (The metal value of coin). Some dealers try to charge extra markup by narrating the fabulous history associated with the coin. However, you are an investor here, not a historian. So, be aware of people who try to sell you these items.
3) Don’t buy out of confiscation panic
Be aware of confiscation scare tactics. Many dealers use the story of President Roosevelt (he ordered to confiscate gold from U.S. citizens due to circumstances, and some rare coins were exempted from it) to con people into purchasing coins that are extremely over-priced, saying that they are exempt from confiscation. Stay clear of situations such as this one.
4) Never borrow for buying gold
Borrowing to buy gold is a great mistake that some people tend to make. This method is referred to as buying or purchasing within or on a margin. Using this method will get you into more trouble that you may not be willing to endure. To stay clear of any issues or problems, it’s in your best interest not to purchase on a margin.
If you keep each of these tips and guidelines in mind while you’re purchasing or investing in gold, you will be on the road to success. It’s in your best interest not to get side-tracked or conned by dealers. If you’re not sure of what you’re doing and you want to a few of the most popular tactics that may be used, you should conduct a little research, such as on this site, before you step into this world.