Buying gold and silver is not as complicated as it may seem, especially when you’re working with an experienced and trusted dealer who can guide you in making your investments.

It will help to do your research beforehand and understand the market as best as you can. Here are some facts and pointers that can help you in buying gold and silver.

Terms to know

When you decide to invest in gold and silver, it will pay to know these terms:

• Physical gold and silver (and other precious metals) – these are actual pieces of precious metals, often in bullion form. Precious metal bullions come as coins, bars and rounds, in various sizes.
• Paper gold and silver (and other precious metals) – these refer to investments in gold, silver and other precious metals without taking a physical delivery. What investors have, instead, are documents that prove their ownership of these metals, which are stored in authorized depositories. A common example is a precious metal- based ETF or Exchange Traded Fund.

Shares in mining companies and futures investments are also considered paper gold and silver assets.

• Spot price – this is the price of an ounce of unrefined gold and silver on the market. It varies constantly depending on market conditions, but historically has a direct correlation with inflation, and tends to rise when there’s perceived uncertainty in the economy
• Premium – this is a mark-up on the spot price to cover manufacturing and distribution costs. In buying gold and silver, the price you pay is typically the spot price plus the premium. Dealers often apply different premiums.

Physical vs. paper precious metals

In buying gold and silver, you may need to choose between physical and paper investments. Paper precious metals have the advantage of lower transaction costs. You also do not have to deal with storage.

Investing in paper precious metals, however, means not having physical ownership of your assets. You may take a delivery, but the minimum amount allowed for this is extremely large.

Buying physical gold and silver, on the other hand, gives you complete access to your investments. The transaction is fully private, and does not need to be reported to the IRS. You are also free to sell or barter your bullions as you see fit.

Physical ownership can be especially handy and comforting in a crisis situation where paper currency has lost much of its value. Gold and silver may be used as currency, particularly bullion and historic coins.

Where to buy gold and silver

You have two choices on where to buy gold and silver bullions: coin shops and online dealers.

Coin shops give you the chance to physically inspect a product before buying it. Buying from brick-and-mortar stores is also a more familiar, and therefore, more comfortable practice for some people.

Buying from a coin shop, however, is only convenient when there’s one near you. It also has disadvantages compared to buying from an online dealer, including:

• Potentially higher premium due to the added costs of running a brick-and-mortar establishment
• Less privacy. People can see you coming and going into a coin shop. On the other hand, buying gold and silver online can be conveniently done from the comfort and safety of your own home.
• Less security. Buying from coin shops makes you more vulnerable to counterfeits. Reputable online dealers get their products directly from mints and manufacturers who distribute their own products.

The key is to buy gold and silver from online dealers with proven track records, as well as accreditation and good ratings from consumer organizations like the BBB.

Products to buy

You can buy gold and silver in different forms. Among the most popular ones are:

• National bullion coins produced by government mints, such as Gold and Silver American Eagles, and Gold and Silver Canadian Maple Leafs
• Bars and rounds produced by private mints. Unlike national coins, these do not have nominal and numismatic values but come in lower prices for the same amount of metal.
• Numismatic coins – these are either modern or historic coins, whose value comes not only from their gold or silver content, but also from their collectability, based on factors that include rarity and beauty

Gold investment options

If you want to invest in gold but fear the possibility of future confiscation, one of the options you can consider is investing in gold-based ETFs (Exchange Traded Funds). ETFs allow investors to own gold assets in paper shares instead of physical ownership of the metal.

ETFs are backed by gold inventories in designated warehouses around the country. Unless you

This happened in 1933 in the wake of the Great Depression, when gold coins were still in circulation and used as legal tender.

With the emergency powers given him to address the dire economic conditions at that time, President Roosevelt ordered the confiscation of all gold coins, to be redeemed at their face value in paper money.

Just like gold, silver also serves as an effective investment diversifier, protecting your assets from the volatility of stocks and bonds. While gold has a higher value, silver may be the better investment option for some people. Here are a few reasons why:

• Silver is more affordable. For the same amount of money, you can get more silver, making it more attractive for beginning investors
• Silver