How to Invest in Gold
Today, perhaps more than any time in history, investors are turning to gold. Economic and geopolitical uncertainty is at unparalleled levels, and the state of the world’s fiat currencies is tenuous at best. Even the most respected sovereign currency, the US dollar, has had its supply (as measured in M1 Money Supply) inflated by as much as 80% in just seven years, which according to classic economic principals, will usher in accompanying price inflation and wealth erosion. How do investors protect against inflation, or even profit from it? The world’s renowned inflation hedge investment is gold. And what asset can benefit from geopolitical turmoil? Gold – it is the world’s financial safe haven.
So then . . . Why did gold and prices suffer late in the 2016 election year?
According to the widely-respected financial analysts at the CPM Group, weakness in gold prices in late 2016 resulted from equity market optimism regarding economic prospects in the US and expectations of Fed rate increases. However, the incoming Trump Administration and the Fed are not likely to deliver all of what the markets have priced in.
This mismatch in expectations versus reality, coupled with the numerous political and economic problems that the world faces, should combine with price-supporting, long-term supply/demand fundamentals to push gold prices higher in 2017, and on a long-term basis. This combination makes building and maintaining a long-term position in gold more compelling for reasons above and beyond purely portfolio diversification.
First Republic Precious Metals is uniquely positioned in the precious metals investment industry to assist astute investors in establishing both long-term core investment positions and shorter-term trading positions in physical gold bullion and gold bullion coins. For 50 years, First Republic has been America’s trusted name in precious metals, as well as one of the largest precious metals merchants in the U.S., because we offer the finest investment-quality gold products coupled with an attractive two-way, buy/sell market, and offering the utmost in service to our valued customers.
Gold bullion is real, honest money . . . and many say, the best form of money the world has ever known. It is a store of value and a safe haven in times of crisis. A small amount, easily carried, can purchase a significant amount of goods and services. It is universally accepted and can be easily bought and sold around the world.
First Republic Precious Metals offers pure gold bullion for investment of at least .995 fine purity only. What are the best sizes of gold bullion ingots? For home delivery, customers choose our 10-ounce gold bullion bar of .9999 fine purity, produced and hallmarked by either Heraeus, which is one of the largest and most respected refineries in the world, or the Royal Canadian Mint, likely the most respected producer across the globe. Also available from First Republic is the 32.15 troy ounce gold “kilobar” – a one-kilogram bar of fine gold bullion of .9999 purity. These “four-nines” fine gold bullion ingots are among the purest gold bullion bars available to investors today. Not for everyone, but certainly also available, are 100-oz gold bars. All gold bars are hallmarked by a leading refinery to certify weight and purity.
Gold bullion coins are just that: they contain pure gold bullion and are produced by a government mint (non-government-minted ”coins” must legally be named ”rounds,” ”medals,” etc.). Gold bullion coins are one of the more popular ways today for investors to hold gold in that they are very easy to buy, easy and convenient to hold, easy to divide, widely recognized and thus are easy to sell or trade.
The most popular gold bullion coins, the only gold coins First Republic offers to its customers, are minted by government mints in the United States, at the US Mint . . . in Canada, at the Royal Canadian Mint . . . in Vienna, Austria, at the 800-year-old Austrian Mint . . . and in South Africa, at the South African Mint.
The pure, 24-carat gold bullion coins available from First Republic Precious Metals are the one-ounce American Buffalo . . . the one-ounce, quarter-ounce and tenth-ounce Vienna Philharmonic . . . and the one-ounce, quarter-ounce and tenth-ounce Canadian Maple Leaf. First Republic also offers 22-carat gold bullion coins (which contain copper as a hardener) and these include the American Eagle gold coins which contain exactly one-ounce, quarter-ounce or tenth-ounce of pure gold . . . and the South African Krugerrand which contains precisely one ounce of pure gold.
When buying gold bullion coins, it is important to remember that as the size of the coin gets smaller, the minting premium percentage increases. So, if you are looking for the lowest possible premium when purchasing gold bullion coins, the best way to buy them is in one-ounce form.
Why should I invest in gold?
Investors and experts have often recommended that 10% to 20% of an investor’s assets should be invested in precious metals, but the reasons for investing don’t stop there. Throughout history, precious metals, including gold, have been a solid hedge against a declining U.S. dollar. Along with this comes the security which gold has to offer during times of war, political strife and uncertainty. Just look to 2009, though a recession occurred, gold experienced a 25% increase. This safe-haven investment could also offer outstanding price appreciation and profit.
Should I invest in gold bullion or silver bullion?
Investments in either gold or silver are completely reliant on the customer’s preferences. The important thing in deciding what to invest in is to ensure you are informed in the metals markets. Our website offers terrific resources to help you determine what investment is right for you. To understand more about why you should invest in gold, silver, palladium or platinum, visit the page on “Why Silver” and also take advantage of First Republic Precious Metals proprietary “Market Outlook” which contains reports analyzing each of the four precious metals.
Is now a good time to invest in gold bullion?
As the world’s most recognized alternative investment, buying gold goes hand-in-hand with greater uncertainty in the world. During recent months, uncertainty has rippled throughout not just our economic system, but the geopolitical system as well. When uncertainty looms on the horizon, it suggests an ideal time to buy gold.
What is the difference between gold bullion and gold coins?
Gold coins are more aesthetically pleasing, containing amazing designs such as the bald eagles on a Gold American Eagle or the American Bison on the American Buffalo Gold Coin. Though gold bullion does not include such striking imagery, solid pure gold ingots are extremely beautiful to hold and an incredible precious metal to own. Ten ounces of pure gold bullion and ten one-ounce coins have the same intrinsic value, but investment grade gold coins trade at a premium while having the advantages of their smaller format and improved authenticity features. Gold bullion is often selected more for larger commercial investments; gold bullion coins increase in value similarly according to their like intrinsic value. Coins, which are truly rare and historically significant, vary in price according to numismatic collector supply and demand and typically not relative to their intrinsic metal value.
How much gold do I need to buy in order to diversify my portfolio?
For those that appreciate how gold works to improve investment reward vs volatility/risk in a portfolio, it is recommended that a minimum of 10% of an investment portfolio should be in gold or other precious metals. However, investors often purchase more when economic or geopolitical uncertainty in the markets and around the world rises. Mathematically, “How Much Gold” over time would have suggested preferred diversification is close to 10%, but certainly, your preferred mix of assets is dictated by your personal views and preferences.
What factors affect the price of gold?
Arguably, gold has the freest market value mechanism of all assets in the world. As such, economic factors determine the price of gold, mainly the decline of the U.S. dollar, or other fiat currencies which it is measured by. Decreases in the value of one’s currency leads to higher prices of gold and greater appreciation for its value as true, honest money. Also, uncertainty in the financial markets such as interest rates, stock prices, and political uncertainties generally lead to greater demand for gold and a greater appreciation in the price of gold.
How do I purchase gold bullion?
Once you have decided on the quantity of gold bullion to purchase, your First Republic Metals Account Representative will assist you in executing your order over the phone. Your purchase and price will be confirmed by a voice recorded line after your acknowledgment, and a written confirmation will be sent to you with the details of your order. Payment may be made after you order but must be initiated on the day of purchase, which means you must mail or wire funds on the day of your purchase. You can have your metal (a) shipped to your home; (b) made available for pick-up at over 30 facilities across the U.S. and Canada; or (c) have your metal delivered to a bank/depository for storage.
Can investors store gold bullion purchased for First Republic Metals?
Yes, investors can store unlimited amounts of gold with First Republic. Your gold will be securely stored with Brink’s or F&M Bank to ensure maximum safety. To learn more about storage with First Republic Precious Metals, call an Account Representative now.
What are the advantages of home delivery versus depository delivery?
Whether you choose to have your metal delivered to your home or to keep it stored in your depository custodian’s vault, it is up to you. By storing it in a depository vault, you gain the comfort and satisfaction of knowing that your investment is safely guarded according to depository industry standards. Stored metal provides you with the benefit of being able to liquidate your investment quicker. You may direct First Republic to ship you your metal, at any time.
How can I get more information on investing in gold bullion?
The best places to get information for investing in gold bullion would be our “Investor Info” tab at the top of this page. There you will find more information about not just gold investing, but also investing in silver and palladium. You will also be able to subscribe to our Precious Metals Review (PMR) and our Gold Value Insights. Both of these subscriptions help to keep you informed on up-to-date information on the precious metals markets.
Which gold products are reportable?
Your purchases of gold do not require reporting to the IRS. Reportable gold products include your sale of 32.15 ounces or more of gold bullion, 25 or more gold one-ounce Maple Leaf coins and gold one-ounce Krugerrand coins. Feel free to discuss any questions you may have regarding reportability of precious metals with your Account Representative.
What ingot sizes are the most popular?
The most popular size of ingot is our ten-ounce size bar for its ability to offer lower premiums, yet great divisibility. This low-cost form of pure gold metal is also an excellent way for new and veteran investors entering the precious metals market to experience how the metals move with markets.
Where can I see First Republic’s Live Gold Prices?
The best place to find live prices for gold is on the First Republic live prices page found using our live prices tab and through the First Republic Precious Metals Bullion Investor smartphone app available for both Apple and Android smartphones. Along with gold, you will also have access to live prices for silver, platinum, and palladium.