If you’re new to buying gold and silver, you’re likely wondering the best place to buy precious metals. With so many options to choose from, it’s definitely difficult for a brand-new investor to make the best choice.
In fact, some people prefer to go to traditional brick-and-mortar stores to buy gold, silver, platinum, or palladium. Others consider purchasing them from online classified sites and other selling platforms including eBay, Craigslist, and Facebook Marketplace.
I’d like to steer you in a completely different direction. Believe it or not, I can say with certainty that the best way to buy precious metals is in a gold IRA. Buying in a self-directed IRA account provides tax benefits, portfolio diversity, avoiding inflation, and other valuable advantages.
Do you know what else it provides? It provides security during times of economic turmoil. When the US dollar struggles due to inflation, the value of gold typically increases at the same time. This is a perfect way to hedge your bets against inflation and protect your overall portfolio from a massive selloff.
This information is about the best place to buy precious metals. Before I delve even deeper into my favorite places, I’d like to share info about certain methods I don’t like. You have to understand why it’s important to avoid certain places to purchase precious metals. This way you can truly understand why my recommended method is so valuable and necessary.
Ways to Avoid Purchasing Precious Metals
Prior to diving into my favorite way to buy precious metals, I’ll share some potential pitfalls to avoid. These purchasing options are valid but you must know a great deal about silver, gold, and other metals before using them.
Otherwise you could end up getting ripped off. And instead of growing your wealth, you end up flushing your hard-earned retirement money down the toilet.
Nobody wants that to happen, right? I know that I want to see you succeed, which is why I’m sharing this information in the first place. Without further ado, here are the gold buying options to avoid at all costs.
Never Buy Precious Metals Investments from a Jewelry Store
Why is this a bad idea? Jewelry stores create beautiful jewelry to say the least. And because they make beautiful creations, they charge a huge markup for the artistic value.
As an example, let’s say you buy a beautiful gold necklace. The content of the gold works out that it’s roughly an ounce of real gold. At the moment, an ounce of gold costs $1932. That’s the value of the necklace based on the content all alone.
But here’s the kicker. When you ask the clerk how much they charge for this necklace, they’ll tell you that it costs somewhere between $3000-$4000 or more. Remember, they place a huge markup on jewelry because of the artistic expression and the beauty of the piece itself.
As an investor, your goal is to buy precious metals for the content all alone. You aren’t looking for beauty, artistry, or any other features that add potential value.
Why? The IRS frowns upon these types of investments for a gold IRA or silver IRA. They aren’t allowed and they aren’t welcome. So, your investment will have to sit in the drawer or jewelry box and hopefully accrue value somehow or some way. But if you were to try to sell this necklace on the street, you’d undoubtedly take a huge pay cut.
Do yourself a favor and open a precious metals IRA right away. Read my review of the top 10 companies in the industry to figure out the best company to work with.
Steer Clear of Buying Precious Metals from Classified Ad Websites
It shouldn’t surprise you in the least that I recommend avoiding classified ad websites. You never know who you’re dealing with and it’s very easy to get burned by unscrupulous sellers on these platforms. In fact, it happens all the time to the least suspecting and nicest people you’ll ever meet. Don’t be one of them!
The reason classified ad websites are terrible is because they are open to everyone. There is no real oversight regarding who can sell their products on these websites. And there’s no way to get your money back if you ever did get burned by one of the sellers.
And it read some of the listings. They are truly outrageous! No one would ever sell precious metals at some of the rock-bottom prices you’ll find on these sites. It’s insane to say the least. But it’s also happening because these people are scammers and they’re out to get your money.
A few examples of potential scam headlines include:
- 5 1-ounce American Eagle Gold Coins for $200
- 10 Silver Canadian Maple Leaf Coins for $2 Apiece
- 1 Ounce Platinum American Eagle Coin for $300
As you can tell, these prices are so low that it would be stealing on your part if you were ever to buy them. But you’re an intelligent investor and you know better. You know that buying any of these scams will ultimately result in losing your money.
And if you don’t know that, it’s even worse. Because you’re too new to precious metals and you need to find a company that you can trust. You need to find a gold broker on the Internet that will help you get started the right way.
Read my top 10 review of the best precious metals IRA brokers in business right now.
Stay Far Away from Coin Collectors at All Times
You might be thinking, “What’s wrong with buying precious metals from coin collectors?” As a collector, they obviously know what they’re doing. So, why aren’t they a valid option for you?
In a nutshell, coin collectors typically trade in numismatic coins and other coins that are expensive because of their rarity. For starters, these precious metals aren’t legally allowed as part of a precious metals IRA. They do not meet the stringent requirements laid out by the IRS.
These coins are also valued very differently than gold, silver, platinum, and palladium bullion. These coins are valued because they are rare, beautiful, and people want them for other reasons besides their content.
Do you know what else? The IRS has very strict rules about the types of coins and the coin content allowed in a silver IRA. Each precious metal must possess the specific purity content assigned below:
- Gold – 99.5% pure
- Silver – 99.9% pure
- Platinum – 99.95% pure
- Palladium – 99.95% pure
Collectible coins never or rarely meet these purity level requirements. For this reason alone, they aren’t allowed in a precious metals IRA. The IRS also trusts certain governments and mints around the world. Your rare or special coin, bar, or around might not come from an approved mint.
Stick with gold IRA investing. It’s the best way to accrue wealth over the long term. Read about the top 10 companies in the precious metals space right now.
Opening a Precious Metals IRA: The Right Way to Invest for Retirement
As I’ve alluded to throughout this article, opening a precious metals IRA is the only way I invest in gold and silver. The benefits are tremendous and this style of investing is attuned to long-term investing.
You won’t feel the need to sell your investment as soon as it starts losing a little value. You have years or even decades to make up for minor shortfalls.
If you look at historic figures, you’ll see that gold typically gains 10% per year averaged out over the last 50 years. This is much better than leaving your money in a savings account that barely accrues interest. And it’s better than leaving it in a money market account, bonds, treasury bills, or more because the return is much better.
Let’s not forget about the tax breaks…
The IRS allows you to accrue money in a pre-tax account or a post-tax account. The pre-tax account allows you to offset your yearly income and lower your total amount earned.
If you made $65,000 in 2021 but deposited $6000 into your IRA account, your gross adjusted income was $59,000. This is a tremendous benefit because it allows you to put more money in your pocket to invest in your future.
Or the other option is post-tax dollars account funding. This lets you accumulate lots of money in your retirement account through investments. And you’ll never have to pay taxes on the investments because of the way the account is structured.
See how valuable this is? It’s a much better investing strategy than simply buying gold and silver from a jewelry store or coin collector. The benefits are tremendous to say the least.
By now, I really hope you understand that the best place to buy precious metals is through an online broker. They’ll help you set up your precious metals IRA account and share the best investment recommendations as well.
To get started sooner rather than later, read my review of the top 10 companies in this space. Choose one of these companies to help you begin your gold IRA investing journey.