Precious Metals FAQ

Start with 1 oz gold coins from major government mints (American Eagles, Canadian Maple Leafs, or Austrian Philharmonics). Buy from reputable dealers, and begin with an amount you're comfortable holding long-term. Most experts recommend allocating 5-15% of your portfolio to precious metals.

For most investors, 1 oz government-minted coins are the best choice. They're universally recognized, easy to sell, and come in convenient sizes. Bars have slightly lower premiums but are less liquid and harder to verify. Coins are better for beginners; bars make sense for larger purchases ($50K+) where the premium savings add up.

Most financial advisors recommend 5-15% of your portfolio in precious metals. Conservative investors may stick to 5%, while those more concerned about inflation or economic instability may go higher. There's no single right answer—it depends on your risk tolerance and financial goals.

Silver is more volatile than gold but offers higher potential returns in precious metals bull markets. It's also more affordable, making it accessible for smaller investors. Many stackers own both—gold for wealth preservation and silver for potential growth.

The premium is the amount above the spot price you pay for physical metal. It covers minting, distribution, and dealer margins. Premiums typically range from 2-5% for gold and 5-15% for silver. Lower premiums mean more metal per dollar. Always compare premiums across dealers.

Spot price is the current market price for raw gold/silver. The price you pay includes the premium (minting, distribution, dealer margin). If spot is $5,000 and the premium is 4%, you pay $5,200. You can't buy physical metal at spot price—that's only for large institutional trades of 400 oz bars.

Usually no. When you sell, dealers typically pay spot price or slightly above. The premium is essentially a transaction cost. Some exceptions exist—American Eagles often fetch small premiums when selling, and during supply shortages, premiums may be recoverable.

Stick to established dealers with 10+ years in business, good reviews, and industry memberships. Major online dealers include APMEX, JM Bullion, SD Bullion, Bold Precious Metals, and Monument Metals. Avoid eBay, Craigslist, and unknown websites where counterfeits are common.

Bank wire or check typically saves 2-4% over credit card prices. For your first purchase, credit card offers buyer protection (chargebacks if something goes wrong). Once you trust a dealer, switch to wire/check to save money.

Yes, from reputable dealers. Major dealers ship fully insured, in discreet packaging. They have guarantees on authenticity. Buying online often gets you better prices than local coin shops due to lower overhead.

Options include: home safe (immediate access, your responsibility for security), bank safe deposit box ($50-300/year, limited access hours), or private vault storage (highest security, 0.5-1% annual fee). Many investors use a combination—some at home for accessibility, bulk in vault storage.

A quality safe (TL-15 rated or better) bolted to concrete provides reasonable security for modest holdings. Cheap fire safes offer almost no burglary protection. Never tell anyone about your holdings. For larger amounts ($50K+), consider professional vault storage.

Standard policies typically only cover $1,000-2,500 in precious metals—not nearly enough for most stackers. You need a separate valuable items rider or a dedicated precious metals insurance policy. Contact your insurer for details.

They offer good security at reasonable cost ($50-300/year), but have drawbacks: limited access hours, no insurance from the bank, and contents can be frozen with a court order. During a crisis (when you might need your metals), banks may be closed.

Yes. In the US, precious metals are taxed as collectibles at up to 28% on long-term gains (vs. 20% for stocks). Short-term gains are taxed as ordinary income. Consult a tax professional for your specific situation.

Cash purchases over $10,000 require reporting (Form 8300). Sales of certain quantities (like 1,000 oz of silver or 25 oz of gold in bars) trigger 1099-B reporting. Most individual transactions don't require reporting. This is complex—consult a tax professional.

Gold IRAs let you hold physical metals in a tax-advantaged retirement account. They make sense for diversification (5-15% of retirement funds), but have higher fees than standard IRAs. They're best for those with significant retirement savings where the fees are proportionally smaller.

Basic tests: magnet test (gold isn't magnetic), weight/dimensions (compare to official specs), visual inspection (compare to mint images). Advanced: Sigma Metalytics tester ($700+) can verify through electromagnetic conductivity. When in doubt, buy from reputable dealers who guarantee authenticity.

Yes, especially from unknown sellers. Sophisticated fakes (including tungsten-filled bars) exist. The best protection is buying from established dealers. Avoid eBay, Craigslist, and too-good-to-be-true deals. For secondary market purchases, invest in testing equipment.

Tungsten has nearly identical density to gold, making it possible to create fake bars with tungsten cores. Standard tests (weight, magnet) won't detect these. Only Sigma testers, ultrasonic testing, or drilling can verify. Stick to reputable sources for bars.

Key factors: US dollar strength (inverse relationship), interest rates (higher rates = lower gold), inflation expectations, central bank buying, geopolitical tensions, stock market performance, and supply/demand. No single factor dominates—they interact in complex ways.

The ratio of gold price to silver price. Currently around 50:1, meaning it takes 50 oz of silver to buy 1 oz of gold. Historical average is about 60:1. High ratios (80+) suggest silver is cheap; low ratios (40-) suggest gold is cheap. Some investors trade between metals based on this ratio.

Timing the market is extremely difficult. Studies show 'time in the market' beats 'timing the market' for most investors. Consider dollar-cost averaging (regular purchases regardless of price) rather than trying to pick the perfect entry point. Focus on the long term.

During panics, demand surges while supply can't increase quickly (mints have limited capacity). Basic economics: high demand + fixed supply = higher prices. In March 2020, silver premiums hit 100%+ briefly. Buy during calm markets when premiums are normal.

Bullion coins trade based on metal content (spot + small premium). Numismatic coins trade based on rarity, condition, and collector demand (often 50-500%+ over melt value). For investment, stick to bullion. Numismatic coins are for collectors who understand that market.

Pre-1965 US coins (dimes, quarters, half dollars) that contain 90% silver. Called 'junk' because they have no collector value beyond silver content. Popular because they're recognizable, divisible, and often have lower premiums than bullion. $1 face value contains ~0.715 oz silver.

Both are excellent. Eagles are 22K gold (more durable, higher premium, more recognized in US). Maple Leafs are 24K (pure gold, lower premium, better security features, preferred internationally). Both contain exactly 1 oz of pure gold. Many investors own both.

Fractional coins have much higher premiums (8-15%+) because they cost almost as much to mint as 1 oz coins. Buy 1 oz pieces for best value. Fractional only makes sense if you specifically need smaller denominations for potential barter or have very limited funds.

Generally not recommended. Jewelry has huge markups for craftsmanship, branding, and retail margins (50-400%+ over gold value). When you sell, you typically only get melt value. For investment, stick to bullion. Buy jewelry because you want to wear it, not as an investment.