Newbie Guide: How to Buy Gold for the First Time

Posted - October 6, 2023
how to buy gold

Gold is one of the world’s oldest investment vehicles. Thousands of years of human history attest to gold’s important place in cultures from Ancient Greece to modern America. Even the Ancient Egyptians valued both gold and silver as symbols of wealth and elegance. Today, gold reigns supreme as the most commonly traded precious metal. Despite ions of dominance as a tool for storing and building wealth, it can be difficult for new investors to enter the thriving gold market. 

That’s where we come in. New collectors should understand how to buy gold for the first time, and Hero Bullion is here to help you navigate the complex world of buying gold bullion. 

Why Buy Gold? 

There’s a reason why investors all over the world put their money on gold. Truthfully, there’s several reasons. Before we explain how to buy gold for newbies, we’re going to take a close look at both the pros and cons of buying gold bullion below. 

Advantages to Buying Gold Bullion 

What are the advantages to buying gold? There are 3 main pros to investing in gold bullion: intrinsic value, historical price appreciation, and beautiful products. While all investors have their own reasons for buying and selling gold coins and bars, we’ll outline just three of gold’s many benefits below. 

Newbie Guide: How to Buy Gold for the First Time
Asahi 1 oz Gold Bar

Intrinsic Value

That’s right – gold holds intrinsic value. When we use the term intrinsic value, we’re referring to the value that gold has purely because of its status as gold. Because gold bullion is a finite metal and it’s always in demand, it holds intrinsic value. In other words, there’s only so much gold to go around. Unlike stocks, the value of gold doesn’t decline based on the quality of the metal. Gold itself is always valuable; price movements are only based on supply and demand. 

For savvy investors who understand how to buy gold the right way, buying gold can add a valuable non-correlated asset to your portfolio. When the global economic market underperforms, gold might still retain value. 

Historical Price Appreciation 

If you’re researching how to buy gold for the first time, it’s likely you already know the metal’s impressive history of price appreciation. Since 1970, gold’s price has risen to almost ten times its original value. While it’s unlikely that gold will experience this kind of radical price action again, this data demonstrates a consistent historical price appreciation that continues to lure investors. 

Beautiful Products 

There’s no denying the beauty of a quality gold product. Gold coins like the American Eagle (pictured below) feature fine craftsmanship, culturally important artwork, and an exceptional gold fineness. If you’re wondering how to buy gold, you likely already know about the gold bullion industry’s reputation for beautiful, classic coins and bars. 

2023 1 oz American Gold Eagle Coin
2023 1 oz American Gold Eagle Coin

We also love the look of gold bars. While most gold bullion bars don’t quite include the intricate, beautiful designs that decorate gold coins, they still shine brilliantly in any coin collector’s portfolio. These beautiful designs make gold bullion more than just a routine investment. Gold bars and coins are also visually stunning collectibles. 

Disadvantages to Buying Gold 

Is gold the perfect investment? Certainly not. Before you learn how to buy gold as a new investor, we want you to be prepared with all the facts. There are inherent risks to any investment, and gold is no exception. Take a look at 3 downsides to gold below: price volatility, high entry cost, and extreme premiums. 

Price Volatility 

Gold’s price is always relatively volatile. This is a plus for some collectors, especially if you plan to hold onto your gold for quite some time. After all, gold doesn’t tend to be particularly quite as volatile in the long term. But in the short term, gold might not be a great investment. Investors who sell their gold shortly after purchasing it are likely to lose money, both due to tax costs and the metal’s occasional massive price drops. Even successful short-term gold traders might be forced to pay additional taxes for their gains. 

To know how to buy gold effectively, you’ll need to understand how the metal’s price trends work. Gold has been a profitable investment for decades, but the best gains have always gone to traders who are willing and able to hold onto their gold coins and bars for a long period of time. Determining your investment’s time horizon is an important part of investing smartly. 

High Entry Cost

Compared to silver and platinum, gold is extremely expensive. Some new investors might not have the capital required to buy several ounces of gold bullion. Even if you figure out how to buy gold and save money, it can be hard to justify the thousands of dollars required to get started as a gold stacker. 

Luckily, fractional gold coins and bars help new investors learn how to buy gold without sacrificing months of rent money to do it. While 1 oz gold coins typically cost $1,800 or more, you can get some 1/10 oz fractional gold coins and bars for $200 or less. This makes fractional gold an excellent option for gold investors on a budget.

Extreme Premiums 

Premiums: the bane of gold stackers. Gold coins come packed with some of the most expensive premiums over spot in the entire precious metals sector. A premium is a small price you pay on top of the spot value of your precious metal product. All precious metal coins, rounds, and bars come with some type of premium. But because gold coins are manufactured by sovereign mints, they often come with some of the highest premiums in the game. 

Investors often ask us how to buy gold for the first time without paying hefty premiums. The answer? Invest in gold bars. We’ve included a few images of our favorite gold bars throughout this guide. Usually, gold bars come with much lower premiums than gold coins. This helps collectors who want to learn how to buy gold without breaking the bank on unnecessary premiums. 

Best Gold Products to Buy 

Before we get into the nitty gritty of how to buy gold, it’s worth spending a few moments discussing the best gold products to buy. When you set out to buy gold, you’ll find that the market is mostly made of 2 main products: gold coins and gold bars. We’ll take a look at the advantages of both gold bullion products below. 

Gold Coins 

Prospective gold collectors often ask us how to buy gold coins. Gold coins are likely the most popular gold product in the world. Every year, mints like the Royal Mint and U.S. Mint distributed hundreds of thousands of pure gold coins. Some gold coins come with a fineness of .9999, while others sacrifice fineness for durability and clock in at the lower purity of .9167. 

Why Buy Gold Coins?

Gold coins are one of the most popular ways to invest in gold for a couple of reasons. First, gold bullion coins contain a high percentage of actual gold. If you’re looking for the maximum gold fineness, we’d recommend a coin like the Canadian Gold Maple. Struck with .9999 fine gold, this coin is about as pure as it gets. Other coins are less pure; the American Gold Eagle is exceptionally durable and clocks in at a purity of .9167. 

Additionally, gold coins may hold numismatic value. Numismatic value refers to the value of a coin added onto its gold content. Coins that are minted in limited quantities or equipped with beautiful designs are worth more to collectors. This means that savvy investors who know how to buy gold the right way can profit – even when the gold market tanks. 

2023 1 oz Canadian Gold Maple Leaf Coin
1 oz Gold Canadian Maple

Gold Bars

Gold bars offer an entirely different way to invest in gold. For collectors who want to know how to buy gold for cheap, gold bars are an excellent option. While classic, comically large gold bars are usually only noted in old cartoons and movies about bankers, the modern market allows anyone to purchase high quality gold bullion bars. Gold bars often don’t feature the kind of beautiful artwork we see on gold coins, but they remain a popular option for low-budget gold stackers. 

Pros to Buying Gold Bars

First, gold bars are generally cheaper than gold coins. While some gold bars might come with high premiums, most gold bars are sold closer to spot price than gold bullion coins. It isn’t tough to understand why. Because of their lack of creative obverse and reverse designs, these products are cheaper to produce. These savings are kicked back to the consumer, who can secure quality gold bullion without spending too much cash.

Newbie Guide: How to Buy Gold for the First Time
1 oz Gold Bar – Any Mint, Any Condition

Gold bars have another inherent advantage: purity. While gold coins are sometimes sold at a purity of less than .9617, we’ve never seen a gold bar from a reputable mint struck with a fineness below .999. If you’re looking to secure as much gold as possible for your cash, gold bars are an unbeatable option. 

How to Buy Gold 

Finally – this is the section you’ve been reading for! Below, we’re going to walk readers through the most important steps of how to buy gold for the first time. Whether this is your first real investment or your ten-thousandth, these tips can help you buy gold smartly. 

Where to Buy Gold Bullion 

In the age of the internet, consumers have several options when learning how to buy gold for the first time. Decades ago, buying gold bullion often meant going from physical dealer to dealer before comparing prices. But today, collectors can buy gold through convenient online distributors. This doesn’t mean you’re off the hook for research, though! Let’s take a closer look at what new investors need to know about where to buy gold. 

Comparing Prices for Gold 

You should always shop around multiple dealers before buying your gold. Gold is an extremely expensive investment, and the last thing you want is to lose hundreds of dollars by failing to do your research before buying. We recommend checking prices across several dealers before you decide who to do business with. 

Shameless plug: Hero Bullion offers some of the most competitive prices and shipping fees in the industry. Check out some of our inventory for your next gold purchase! 

Spot Price Vs. Premiums

To properly compare prices, readers should understand the difference between spot price and premiums. Spot price, also known as melt value, refers to the value of one troy oz of gold alone. This means that spot price doesn’t take into account things like numismatic/collectable value or premiums. 

Premiums help to make up the rest of the price for the gold products you see on our website. Premiums vary from product to product, and some gold dealers may charge higher premiums than others. To compare gold prices the right way, make sure to keep track of gold’s spot price

How to Avoid Gold Scams

Gold scams come in many forms. Investors learning how to buy gold for the first time should be cautious to avoid falling victim to a counterfeit coin or bar. Hero Bullion’s decades of combined experience helps to guarantee that you’ll never receive a fake coin from us. But even if you don’t buy from Hero Bullion, you’ll want to take a look at some of the research tips we’ve included below.

1 oz Austrian Gold Philharmonic Coin Obverse
1 oz Austrian Philharmonic

Research and Evaluation 

You’ve taken a good first step by learning how to buy gold coins and bars. But your journey to the perfect gold stack doesn’t stop here. Before you buy and store your new gold coin or bar, check out some of the coin pricing guides online. These free tools can help you figure out how much you should really be paying for a gold product. Additionally, familiarizing yourself with the details of popular coins can help you identify a counterfeit when you see one. 

Final Thoughts: How to Buy Gold and Start Stacking!

Hero Bullion’s Bullion Academy is always here to help new and veteran investors alike up their gold stacking games. Before buying your first gold coin or round, make sure to do your research and shop around at multiple dealers. We want you to appreciate the beauty and value of gold, silver, and platinum as much as we do! 

And as always, please don’t hesitate to contact our team with any questions you might have. 

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About The Author

Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.