Beginner's Guide to Buying Precious Metals

The basics of what you need to know before buying your first ounce of gold, silver, platinum or palladium.

What Is Bullion?

"Bullion" refers to precious metals (gold, silver, platinum, palladium) in standardized forms — coins, bars, or rounds — valued primarily for their metal content rather than their face value or collectibility.

When you buy bullion, you're buying a physical asset that you can hold, store, and sell. Unlike paper gold (ETFs, futures), physical bullion has no counterparty risk.

Coins vs. Bars vs. Rounds

Coins

Government-minted with a legal tender face value (even though the metal is worth far more). Examples: American Gold Eagle, Canadian Maple Leaf, South African Krugerrand.

• Pros: Highly recognizable, easy to sell, often IRA-eligible
• Cons: Higher premiums than bars (typically 3–8% over spot)

Bars

Produced by private mints and refineries. Available from 1 gram to 400 troy ounces. Major brands: PAMP Suisse, Valcambi, Royal Canadian Mint.

• Pros: Lowest premiums (especially larger sizes), efficient storage
• Cons: Less liquid than sovereign coins, harder to sell in small quantities

Rounds

Coin-shaped but privately minted (no face value or government backing). Often feature custom designs.

• Pros: Lower premiums than government coins, wide variety
• Cons: Less recognizable, may require assay for resale

Understanding Premiums

The "premium" is the markup you pay above the spot price. It covers minting costs, dealer margin, shipping, and supply/demand dynamics.

Example: If gold spot is $2,000/oz and a 1 oz Gold Eagle costs $2,068, the premium is $68 (3.4%).

Premiums vary significantly by:

• Product type: Coins > Rounds > Bars (generally)
• Size: Smaller products have higher per-ounce premiums
• Dealer: Prices differ across dealers — that's why this site exists!
• Demand: Premiums spike during economic uncertainty

How to Choose a Dealer

We compare prices across top US dealers. When evaluating a dealer, look for:

• Competitive pricing: Compare the total price, not just the premium
• Shipping costs: Some dealers offer free shipping above a threshold
• Payment methods: Credit card, wire transfer, check, crypto — each may have different prices
• Reputation: Check BBB ratings, Trustpilot reviews, and how long they've been in business
• Buyback program: Good dealers buy back at competitive spreads

Where to Store Your Gold

At Home

A quality fire-rated safe bolted to the floor. Keep it discrete — don't tell everyone you own gold. Consider a homeowner's insurance rider for precious metals.

Bank Safe Deposit Box

Secure, but not FDIC insured. Access limited to bank hours. Some jurisdictions allow seizure in extreme scenarios.

Third-Party Vault

Companies like Brink's, Loomis, and IDS of Delaware offer allocated storage with full insurance. Best for large holdings.

Tax Considerations

In the US, physical gold is classified as a "collectible" by the IRS and is subject to a maximum capital gains tax rate of 28% (compared to 20% for stocks). Key points:

• Capital gains tax applies when you sell at a profit
• Dealers must report certain transactions to the IRS (Form 1099-B)
• Gold held in a self-directed IRA can defer taxes
• State sales tax varies — some states exempt bullion purchases

Disclaimer: This is educational information, not tax advice. Consult a tax professional for your specific situation.

Ready to Start?

Head to our price comparison page to find the lowest premiums across trusted dealers. Or read Why Buy Gold? for the investment case.