How to Buy Gold and Silver Bullion

Bullion is gold or silver bought mainly for its metal content, usually in the form of coins, bars or rounds. If you are thinking about buying some for the first time, this guide covers the main product types, how pricing works, how to choose a dealer, and how to keep what you buy safe. It is not investment advice; it is about buying sensibly.

Know the main product types

• Government-minted bullion coins: Coins issued by national mints with a stated weight and purity, such as American Eagles and Buffalos, Canadian Maple Leafs, South African Krugerrands and others. They are widely recognized and easy to resell.
• Bars: Made by private refiners and some mints in many sizes. Larger bars usually cost less above metal value per ounce, but are harder to sell in part.
• Rounds: Coin-shaped silver or gold pieces made by private mints. They are not legal tender, but are valued by weight and purity.
• Junk silver: Older circulated 90% silver US coins, traded largely for their silver content.

Collectible or "numismatic" coins are a different market where rarity and grade matter more than metal. Beginners are often better served by keeping bullion purchases and collectible purchases separate.

Understand spot and premium

The spot price is the current market price for one troy ounce of raw metal, which changes throughout the trading day. When you buy, you pay spot plus a premium that covers minting, distribution and the dealer's costs and margin. When you sell, dealers usually pay a price related to spot that is lower than what they charge.

The difference between a dealer's buy and sell price is called the spread. Premiums and spreads vary by product, size, dealer and market conditions. Small items and popular coins often carry higher premiums than larger bars. Ask any dealer to tell you both their selling price and what they would pay to buy the same item back.

Learn the units

Precious metals are weighed in troy ounces, which are slightly heavier than the ordinary ounces used for food. Also note purity: many bullion products are .999 or .9999 fine, while some well-known coins, such as the American Gold Eagle and the Krugerrand, are 22 karat and contain a full ounce of gold plus added alloy for durability. Read the product description for both weight and fineness.

Choose a reputable dealer

• Look for a business with a long track record, a physical address and clear policies.
• Check reviews and membership in recognized professional numismatic or precious metals associations.
• Compare posted prices for the same product across a few dealers.
• Be wary of anyone who pressures you, cold-calls you, or steers you away from common bullion toward high-premium "special" coins.
• Be cautious with prices that seem far below other dealers. That is a common sign of counterfeits.

Avoid counterfeits

Fake bullion exists, especially in popular coins and bars. Buying from established dealers is the best protection. Check that the weight, diameter and thickness match the official specifications, and that a magnet does not attract it. Many bars come sealed in assay packaging with a serial number. Private sales and online marketplaces carry more risk.

Paying and record-keeping

Dealers accept different payment methods and may price them differently, for example charging more for credit cards than for checks or wire transfers. Ask before you buy. Keep every invoice showing the product, quantity, date and price paid. You will need these records when you sell, since sales can have tax consequences that vary by situation and state. A tax professional can explain how they apply to you.

Some states charge sales tax on bullion purchases and others exempt it, sometimes depending on the amount. Ask your dealer how it works in your state.

Store it safely

Keep bullion in its original packaging or protective capsules, and handle it as little as possible. Options include a bolted home safe, a bank safe deposit box, or a private depository. Check whether your insurance covers precious metals at home, and keep your holdings private.

Quick checklist

• Start with widely recognized coins or bars from established mints and refiners.
• Ask for both the selling price and the buyback price.
• Compare premiums across several reputable dealers.
• Be suspicious of prices that are too good to be true.
• Keep every receipt and store metal securely.