Choosing a UK Gold Bullion Dealer
Compare the Best Gold Bullion Dealers in 2012!
There are a number of ways to go about investing in gold in 2012. The age of the internet has provided a whole new market for customers to invest in gold, and with so many online bullion dealers to choose from, you can easily compare products, prices and independent dealer reviews.
Whether you’re thinking of buying physical gold to store at home, at a remote location or even through an exchange-traded product (ETP) or fund, the following article should provide some guidance. You can read about our recommended gold bullion dealers, plus information about sur-charges, storage fees and premium spot price comparisons.
My Recommended Gold Bullion Dealers
1) Bullion Vault – Bullion Vault is the best bullion dealer for UK customers. They offer the lowest commissions (starting from a base rate of 0.8% down to 0.02%) and they can store the gold for you. Thy offer you the option of withdrawing your personal allocation and give new customers 1g of free gold (worth approximately $50). Bullion Vault allows you to buy/sell gold 24/7 and you can open an account and purchase gold within 5 minutes.
2) APMEX – Mainly recommended for US customers, APMEX (American Precious Metals Exchange) is the biggest precious metals retailer on the internet. You can invest in gold, silver, palladium or platinum here and they offer bullion and coins in all shapes and sizes. APMEX’s prices are reasonable, their products are available to order 24/7 and they even offer special monthly promos to customers.
3) The London Mint Office – The London Mint Office is the best place to buy British numismatic coins. They offer all of the latest gold sovereigns, royal/military commemorative coins, 2012 Olympic coins, silver coins, old coins and international coins at reasonable prices starting from £24.99. They deliver anywhere in the UK and offer a 14 day money back guarantee.
Overview of Buying Gold at BullionVault.com:
Bullion Dealer Reviews
Gold Prices, Commission Charges and Storage Fees
If you’re investing in gold than one of the most important things should not only be the costs of buying gold but also any commissions or storage fees involved in the process.
The price of gold per ounce can vary quite a lot between different bullion dealers and market places. For example, the mark-ups in the jewellery market are by far the biggest and they can end up charging 200-300% mark-up on the price of gold. This contrasts with your local gold dealer who might only charge a modest fee of 1%. However this could still be viewed as a rip-off, especially if you plan on purchasing large amounts of gold ($10,000+) where the margins should be lower. At BullionVault.com, for example, the commission rate starts at a base rate of 0.8% and goes as low as 0.02% for orders of $540,000 or more. This means you’d only be paying $108 fees as opposed to $5,400 is the commission was 1%. The reason Bullion Vault is able to offer such low margins is because they deal with more than $1 billion worth of gold and can negotiate the best deals for you.
The other cost involved in buying gold depends on whether you choose to store the gold yourself (and pay delivery fees) or pay someone else to store it for you. Most bullion dealers and marketplaces such as Bullion Vault will store gold for you at a rate of 0.12% per year. This is the lowest that you’ll ever find online.
Buying Gold Coins vs Bullion
This is where your reasons for investing in gold become important. Gold bullion is traditionally seen as the best way for you to invest in gold. Bullion is essentially “bars” or “rounds” of gold in its purest form (99.995% finesse) as specified by Good Delivery (a market specification by the London Bullion Market Association - LBMA). Bullion follows the spot price of gold exactly and is easy to buy and sell. Its price is reflected by the supply/demand of gold. You can buy bullion bars in a number of sizes, starting from $50 for 1 gram all the way up to $15,000+ bars with a weight of 10 troy ounces.
Gold coins on the other hand, while a good investment, are more of a collector’s item and tend to have a higher premium. Gold Sovereigns, Krugerrands and American Gold Eagles for example can have an extra commission charge of 1-5%. Another difference between gold coins and bullion is that numismatic (collectible) gold coins tend to be valued depending on their rarity and condition rather than just gold spot price.
Buying Physical Gold vs Virtual Gold (or ETFs)
If you’ve never invested in gold before than you should know you have two main options: buy physical gold or buy exchange traded funds.
Exchange traded funds (EFTs) such as GLD is an investment fund which tracks the spot price of gold. ETFs are traded on markets just like any other bonds/shares and each share that you buy represents around 10% of an ounce. The advantage of investing in an EFT is that it avoids the hassle of owning gold and gives you a certificate instead. The downside is that you don’t own an allocated amount of gold (fungible) which means you can’t withdraw any money. You’ll also have to pay broker or management fees each year. For more information read our article on Physical Gold vs ETFs.
