• Welcome to Global Bullion Suppliers!
  • Gold & Silver Prices That Won't Be Beat
GOLD ...

First Time Buyers

First Time Buyers

Why Buy Precious Metals

Precious metals have been recognized as inherently valuable for millennia. They are considered intrinsically valuable investments that offer a sort-of insurance against inflation – you can mine them, but you can’t make more gold unless you have access to a supernova. Many people look to own a small amount of precious metals for this reason. When things go bad, precious metals, especially gold, tends to go good.


Years ago, gold was both a currency and then a reserve backing currencies. Although times have changed, and we have implemented floating “fiat” currencies that are no longer “backed” by precious metals, many investors and other users continue to purchase gold, silver, and platinum-group metals as their own reserve protection. We hope this guide will help familiarize you with precious metals on a practical and theoretical level.


Groups and Individuals buy precious metals for many reasons. Most of these metals, and gold in particular, are considered a natural safeguard against the depreciation of modern currencies. Gold is, for this and other reasons, a constantly moving commodity exposed to market sentiment. Unlike other commodities that are affected more clearly by supply and demand, the amount of gold that has been mined far outweighs that which is mined per year.


What Happens to Gold when I sell it?

You'll find that gold is never really lost, and broken jewelry and electrical waste, is often collected to be re-refined – gold is recycled. With that in mind, most gold is kept locked away by in national vaults. Although the 20th century saw the elimination of the gold standard, reserves of gold generally afford trust to a currency. According to the World Gold Council, the three biggest reserves are the USA at 8,133.5 tonnes, Germany at 3,381.0M tonnes, and the International Monetary Fund (IMF) at 2,814.0 tonnes.


Reserves and investments in precious metals have historically appreciated in value during times of economic uncertainty. Generally this involves (a) structural concerns with global or local financial systems; (b) threats of inflation and diminishing returns in various asset classes; (c) perceived instability in political and social institutions; and finally (d) actual political or economic crisis or collapse. Unlike gold, silver tends to move between demand as a store of value, and an industrial metal. Silver tends to be more volatile than gold.


While precious metals tend to move in tandem, industrial demand for silver and platinum-group metals tends to be impacted by industrial uses unrelated to hedging.


How to Buy Bullion in Canada and Elsewhere?

Say you want to expose yourself to precious metals. The best way to do that will depend on your needs, but there tend to be three ways to go about it:


(a) Market Alternatives: Funds such as Commodity ETFs, Hedge Funds, and Mutual Funds, are traded on various markets such as the NYSE, LSE, TSE, and many others. These tend to own some combination of physical metals and stocks – you can always buy stocks yourself – of companies that work with metals. Most of these alternatives can be found as futures and options, where you can invest in corporations, funds, stocks, or physical metals on a leveraged basis. The benefit and concern of these is that you’re tied to management performance.


(b) Certificates: banks will sell gold through their currency desk, but more-often-than-not, you will be paying a high premium to do so. Certificates are sold as an alternative to physical metal ownership, while being tied to the value of that metal. Essentially you get a piece of paper that the bank will honor for the value of the metal, applicable fees adjusted for. The benefit and concern is that it’s a hassle-free piece of paper, but if the bank goes out of business, it has no inherent worth.


(c) Bullion: Bars, coins, and rounds of pure, physical, precious metals are known as bullion. Whether you expect the worst, or want to know you have the best, this is probably the way to go. Not only do you own a physical bar that you can hold in your hand, but also you are not tied to anyone else’s performance.


You can sell or barter bullion almost instantly at any local jeweller or pawnshop. You can give it to your children. This is where we step in. Global Bullion Suppliers makes it easy to buy bullion, and if you like, store it at one of many internationally renowned vaults.



How Much Gold and Silver should I Buy?

Precious metals prices have gone through highs and lows. How much you should buy will depend on your needs in buying metals, and your risk tolerance. Most investors take a more passive approach and aim to own a steady amount of gold and silver in their portfolio as a safety measure. How much you should own would also reflect what you think of the markets, i.e. whether equity markets are over-valued or undervalued. More importantly, you need to consider how your personal assets and liabilities will react under conditions that are good for, or bad for, precious metals.


What you don’t want to do is over-expose yourself to any investment. With that in mind, gold is generally considered a form of “cash”, and perhaps for this reason is traded at most banks’ currency desks. It earns, technically, no income, but since it is negatively correlated to most fiat currencies with respect to real interest rates, it can protect and gain value very quickly when faith in day-to-day cash decreases.



What Gold and Silver Bars, Coins, and Round Should I Buy?

Physical precious metals come in a variety of shapes and styles. Deciding to buy gold, silver, platinum, or other metals can be as difficult as deciding in what form to buy them. You might look at bars, rounds, coins, collectible coins, and even numismatics. Each of these will have different considerations when it comes to premium-over-spot, tax regulations, and liquidity. At the end of the day, however, your personal taste may be most important. If you’re looking at precious metals strictly as investments, you probably want to pay the lowest premiums, and have a higher liquidity.


For that reason, you will probably be looking to buy bars of either gold or silver. The larger the bar, the lower the manufacturing cost, and therefore, the less you pay above the “market” price – the asking price set by institutions trading on the markets. Bars come in sizes ranging from a 1g to 1000oz. Gold bars typically occupy the smaller sizes, while silver, the larger. Coins are a unique investment in bullion that carries a designated currency value; state mints are the only entities that can produce coins. The prudent investor will generally look at the alternative – rounds.


Unlike coins, these carry no printed amount, but it is generally recognized that being able to tender a coin for $5.00 while the value of the metal is $20.00. With that in mind, coins tend to maintain a slight premium as collectibles under re-sale. It should be noted, however, that not all coins are bullion coins. Numismatics may contain high amounts of precious metals.


When there is no collectible value, they are traditionally considered “junk silver”, but can sometimes appreciate far more than the metal value. Gold and Silver bars tend to be 99.9 – 99.99% pure, while coins and rounds tend to range from 50 – 99.999%. Most investment grade bullion will indicate country of origin, refiner, size, and purity.



How Do I Store Gold and Silver?

Once refined, metals traded on international markets spend nearly all their time in vaults. Global Bullion Suppliers stores and insures your metals at some of the most secured and trusted vaults in the world – the same ones used by exchanges, governments, and large banks to store metals allocated directly in your name. They do so for the same reason you might, to remove the unnecessary steps of insuring, securing, and shipping metals you are not using and plan to keep for the long-term.



Why store your metals?

When you own small or large amounts of bullion, you want to make certain that it is secure. Bank vaults often only insure up to $50,000.00 and will tend to reveal the contents of your “box” to interested government agencies without a court order. Global Bullion won’t. When you store metals with us, either automatically though our website, or by calling in to set-up an account, we will tailor our vaulting solutions to your needs. The first step is to ascertain whether or not you need to vault your metals? While vaulted, all metals are fully insured by Lloyd’s of London.


They can also be quickly and cost-effectively moved to other countries or duty free zones. You can also quickly arrange for Global Bullion to buy-back your metals without any additional shipping costs. When you need to access or remove vaulted metals, all you need to do is call and let us know whether you will be picking them up (at no extra cost), or having them shipped to you. This process typically takes no longer than 24-48 hours, and saves you the risk of having to keep metals at home. Some other benefits of vaulting you metals with Global Bullion are being able to review your current, allocated (individualized) holdings, and having access to online resources and detailed reports.