There are many ways to get exposure in the precious yellow metal market. However, this article will tackle physical gold investments and not gold-backed ETFs or mining stocks.
Traditionally, people bought gold with the help of a broker. This is still being done today, and with it are the fees investors need to shoulder not only for the broker premium but also the shipping and storage costs of gold. Premiums for the precious metal can go as high as 15%. For coins, the lower the denomination of gold content in each coin, the higher the premium.
Germany is the second-largest gold holder in the world and those who keep themselves in the loop with gold news would be familiar with the fiasco the country experienced in 2013.
BullionVault reported that the country ordered a repatriation program for some of its reserves that are stored in the U.S. However, apart from political issues, one of the problems that the country is experiencing is the sluggish repatriation of its reserves. In 2014, which is after a year of the repatriation order, the U.S. was only able to return a trivial amount of 5 tons to Germany. If investors can’t get a hold of their gold fast when they need to, gold investments would lose its sense as a good hedge to a bad economy.
Thankfully, there’s a new way to buy gold today, and it’s cheaper and more hassle-free.
The physical gold and silver market for private investors online, more commonly known as the “Internet peer-to-peer bullion exchange market”, is a trading site for physical metal investors. Some of these sites strictly follow the regulations of the London Bullion Market Association (LBMA) – the center of the world’s trading of gold bullion – so investors can be assured that they’re only buying and selling good delivery gold. The Internet peer-to-peer bullion exchange market started in the UK and boomed in 2005. The good thing about this type of trade is that people can buy gold via the market and the provider will handle the shipping and storage fee of its customers. In addition, people won’t need to pay for high premiums since transactions are made directly between two people. It’s like being on Ebay where two people transact and after a deal has been reached, the site will direct both parties about the shipping and handling of the product.
Do you have reservations for the online trading of gold and silver? Have your say in the comments section below