How to buy physical gold: a practical guide

Step 1: Set your amount and time horizon

Before talking to a dealer, write down three answers: how much you intend to allocate, for how long, and what you would do if you needed the money earlier than planned. Physical gold pays no interest or dividends, and its price can fall for long periods. How much of your savings to put into gold is a personal decision; if you are unsure, speak to a licensed adviser where you live.

Step 2: Choose a product — bar or coin

Investment bars are sold by weight and fineness, usually 999.9, and typically carry a serial number and a refiner’s assay certificate. Bullion coins are recognised internationally and easy to sell a few at a time, but their premium per gram is usually higher than a large bar’s. Some coins also carry collector value — that is a different product, priced on more than its gold content. See bars vs coins.

Step 3: Decide where the gold will be kept — before you buy

Storage is not a detail to sort out later. If the gold will sit in a dealer’s or a vault company’s facility, find out whose name the metal is registered in, whether it is allocated to you, what the insurance covers and what it costs to take it out. If you will keep it at home or in a bank box, check your insurance first. See gold storage options.

Step 4: Get written quotes and compare them properly

Comparing dealers only works when you compare the same product, in the same currency, at the same moment. The simplest method is to calculate the final price per gram of fine gold for each quote:

For example, a coin weighing 33.93 g at 91.67% fineness contains about 31.1 g of fine gold — one troy ounce. A 31.1 g coin at 99.99% contains almost exactly the same amount. Compare by fine gold content, not gross weight. Then enter each quote in the calculator to see the total over your holding period, including storage and the sale spread.

Step 5: Ask how tax applies where you buy

Whether you pay sales tax or VAT on physical gold depends on the country (sometimes the state), the product and who is buying. Rules differ widely:

• In the European Union, a special VAT scheme exempts transactions in investment gold — bars of at least 995 fineness and coins that meet the Directive’s criteria — with an option to tax for some traders.
• In the United Kingdom, HMRC guidance states that investment gold is exempt from VAT, subject to an option to tax.
• Elsewhere, investment metals may be taxed in full or in part. Buying in Israel? Read the Israel country guide.

Ask the dealer in writing whether the quoted price includes tax, and at what rate. Tax on a later gain is a separate question for a tax adviser where you are resident. Gold Decision does not determine the tax treatment of any transaction.

Step 6: Check the dealer

• The legal company name, registration number and business address — and that they match the entity on your invoice.
• Any registration the dealer holds with a regulator where it operates, and what that registration actually covers. An anti-money-laundering registration, for example, is not a quality or safety certification.
• Whether products come from recognised refiners or mints. The LBMA (London Bullion Market Association) publishes a list of accredited refiners; that accreditation belongs to the refiner, not to the dealer.
• What you receive: an invoice, product certificate, serial number and storage confirmation.
• A written buyback policy: which reference price, what spread, and how many business days until you are paid.
• If the dealer stores the gold, who physically holds it and what happens to it if the dealer stops trading.

Step 7: Payment and records

Pay by a method that leaves a record, and make sure the invoice lists the product, quantity, fineness, price and any tax. Many countries limit large cash payments or require dealers to identify customers above certain amounts; expect to be asked for identification. If you pay from an account in another currency, ask in advance about transfer fees and the exchange rate applied. Keep every document — you will need them when you sell, and possibly for tax purposes:

• The invoice, with product, weight, fineness, serial numbers and tax shown.
• Assay certificates and original packaging, unopened where possible.
• Storage agreement, holding statements and insurance terms, if the gold is held for you.
• The written quote and buyback policy you received when you bought.

Step 8: Plan your exit now

Know in advance who you would sell to, how the price would be set and what it costs to withdraw the gold from storage. Selling back to the dealer you bought from is often the simplest route, but not necessarily the best-priced. See selling physical gold.

Warning signs

• A promised return, a “price floor” or a fixed buyback price without written terms.
• Time pressure: “this price is only valid today”, “last units left”.
• Refusal to give a written quote, or a quote that does not state product, fineness and tax.
• Coins pitched as “rare” or “semi-numismatic” to justify a price far above their gold content — FINRA warns about this tactic.
• “Pooled” storage where it is unclear whether specific metal belongs to you or you only hold a claim against the provider.