How to Invest in Physical Gold

What does an ounce of gold look like? Experts in the field of precious metals have various methods to answer questions regarding the weight compared to the purity of gold. The troy weight system (t/oz or oz/t) is used to measure the weight of precious metals like silver, platinum, and gold coins as the default, except for those that are incredibly light.

Oxford Gold Group has been set up in order to assist possible gold buyers in comprehending the appearance of pure gold, regardless of if it is in the shape of an ounce-gold bar or something else. The following is a description of how traders and collectors assess the weight of gold, the reasons for doing so, and the discrepancies in gold measurements from one country to another. Find out how to acquire gold as an investment.

What Does a Gram of Gold Represent?

Prior to entering into the widely talked about topic of troy ounces, it is beneficial to comprehend the most minute unit of measuring gold: the gram. The Latin term for “small weight” is what the metric system applies to any item weighing less than an avoirdupois or typical ounce (about 28.3495 grams). A gram of gold looks like the size of a normal paperclip.

What is a Troy Ounce of Gold?

A troy ounce has been the standard for measuring gold in the market for centuries, being much more common than the metric system’s grams, dating all the way back to the 1400s. The Troy Ounce came into being when the old British currency system was created, and it is still being used today, making it the only time-honored weight measuring system still in use. Using the troy ounce, a standard throughout the sector, is what we employ to determine the weight of different precious metals.

Gold traders use troy ounces when handling bigger amounts. An illustration of this could be a central bank or an authorized bullion dealer that possess Gold Delivery Bars with a value of 400 t/oz. Trades of smaller sizes may find it advantageous to utilize 100 t/oz bars, including investments by regular people in gold retirement accounts.

What does an ounce of gold appear to be in comparison to a gram? A troy ounce is about 3 grams heavier than a regular ounce, containing 31.1 grams. An individual troy ounce of gold would appear akin to a small disc the size of the clip on a pen.

A Troy Ounce vs. A Standard Ounce

When referring to gold, traders usually use the term “standard ounces” for ease, but they are always in fact referring to troy ounces. A variation of almost three grams separates one troy ounce from a conventional ounce, which may have a significant effect when measuring considerable amounts of gold. Crafting jewelry with a typical ounce of gold will result in smaller, less valuable pieces as well as potentially leading to misunderstanding as to the worth of the item.

Calculating Purity

How much does one troy ounce of gold weigh in grams? This amounts to a total of 31.1 grams of gold, although this figure is only exact for .999 pure gold bullion. Typically, gold that is less pure will have a lower mass in grams. The standard of purity for gold is commonly indicated via the measure of ‘karats,’ with pure gold amounting to 24 karats while 23 karats contains roughly 96.5% of pure gold.

Pure gold is the only gold that is 100% gold, with no other metals or alloys added in. Other forms of gold, such as 24 karats or less, typically contain additives such as other metals that are not of any significant value.

How Much is a Troy Ounce Worth in Today’s Gold Industry?

The value of gold fluctuates drastically from one day to the next. The most efficient way to keep aware of the current prices for gold and silver on the stock market is to utilise free online monitoring tools. The specialists at Oxford Gold Group emphasize considering the long-term trends of gold when reviewing the related data and graphs.

Considering just a single year’s worth of data might lead an investor to understand that the cost of gold is comparatively static (as it is a dependable resource). Each penny makes a difference when looking at the amount of gold traded. Even a tiny sum like one or two cents could be a profitable deal for people who want to change their investments into cash.

Pay attention to the karats and ensure the gram count is accurate—gold comes in all shapes and sizes, including:

bricks
granules
rectangular bars
ingots and more

It is essential to be aware that gold coins and bars, despite being of the same weight and karat value, tend to cost more than bars. The price variance is attributable to their appeal to collectors, their attractive visual appeal, and their scarcity.

Should I Buy, Sell, or Invest in Gold?

What does investing in an ounce of gold look like? Depending on the sum you decide to put in, it could be a substantial amount of money. It could appear to be a good choice financially and a safeguard, depending on the way you use it.

Investing in gold bars is an ideal initial choice for individuals looking to open a gold IRA. People recognize the value of these commodities globally.

Why don’t you browse the Oxford Gold Group’s range of 10-oz gold bars, 1-oz gold bars, and gold coins online – each item is only a small amount in troy-ounce weight. Investing in small amounts of money, such as grams, is an economical way to begin a new financial strategy. Buy anywhere between 1-100 grams to get informed on this kind of trading, so you can pick the ideal approach to assemble a long-term precious metals portfolio.

Should You Invest in Physical Gold?

It is not just during moments of economic downfall or political upheaval that it is worth mentioning gold as a part of a portfolio; in any situation one should consider having gold as part of their investments, as it can diversify holdings.

The amount that you invest and the form in which you do so depend upon your willingness to take risks and your preference for easy access.

Form of Physical Gold

Physical gold can be found in various shapes and sizes, each possessing distinctive qualities and prices.

Gold bullion

Bulk gold is generally known as bullion, often in the form of bars or ingots. Usually, gold bars are cast and ingots are formed (a less expensive manufacturing process). Therefore, establishments requesting gold pay more than the regular market price of gold in comparison to ingots.

The weight of bars and ingots can vary from one-fourth of an ounce all the way up to 430 ounces, and they are usually marked with their purity, weight, and where the bullion was produced. It is not always the case that all gold is alike, especially concerning purity and weight. Investment-grade gold is at least 99.5% pure.

Financial institutions and gold merchants offer bullion bars and ingots for sale. It can be difficult to locate a bank that offers physical gold at a lower rate than merchants do, but it is usually worth the effort.

Gold coins

Another common way to acquire physical gold is by obtaining minted coins. Do not mix up these coins with the old, unique coins amassed by coin enthusiasts. As opposed to these, the coins at hand are novel, being invented by national governments to be purchased by investors. The costs they bring are contingent upon their gold substance— otherwise known as their “softening worth”— in addition to a 1%-5% additional charge.

Although several governments issue gold coins, for maximum liquidity, most buyers stick with the most widely circulated and recognized:

American Gold Eagle
Australian Gold Nugget
Canadian Maple Leaf
South African Krugerrand

Major banks, coin dealers, brokerage firms, and precious metal traders all carry minted bullion coins.

Pros and Cons of Physical Gold

The primary reason why many individuals invest in gold is to have actual pieces of it. It is the actual metal that possesses the majority of the natural advantages for investing.

Advantages of physical gold

Inflation hedge. Advocates argue that, as a tangible asset, gold maintains an intrinsic value that always reflects the cost of living. There’s an old saying that an ounce of gold equals the cost of a quality business suit. That was held in 1934 when men’s suits fetched $35, and it does today too, with gold close to $2,000 an ounce (of course, that suit better be a Boglioli).
Counterweight to stocks. Like other commodities, gold acts as a counterfoil to equities, usually moving in the opposite direction of the stock market. Case in point: When the subprime mortgage meltdown began in 2008, ushering in the Great Recession, gold—which for years had been trading in the $400-600 range—shot up to $1,000 per ounce and kept going for the next three years.
Haven. Gold’s seen as a haven in uncertain times or whenever there’s socio-political turmoil. After the 2016 Brexit vote, its price rose over 10% in one month, for example. “Owning gold,” says Dennis Notchick, a certified financial planner at Stratos Wealth Advisors, “appeals to individuals who are concerned about the collapse of global markets or other threats to a government’s ability to back its currency.”
Virtually indestructible. “Physical gold cannot be hacked or erased,” says Charles Stevens, COO of Bullion Box Subscriptions. (Remember, we’re thinking in catastrophic terms here.) “Gold cannot be destroyed by a natural disaster and it will not get worn down in time.”

Drawbacks of physical gold

Expensive to hold. Storing gold at home carries enormous risks of theft or loss. Keeping it in a commercial facility incurs storage costs, often based on the size and value of the holdings (anywhere from .5% to 2%). If you’re not using a professional storage facility, you’ll want to insure your gold, too — another ongoing charge.
Illiquid. Physical gold can’t be sold with a press of a button or a call to a broker. Even with dealers acting for you, a sale can get days or weeks to settle, plus you have to arrange for shipping.
Does not produce income or profit. A $1,000 investment in bullion buys $1,000 — period. Physical gold doesn’t generate interest or dividends. The only potential for appreciation is if there’s a jump in prices that lets you sell at a profit (and even that can be compromised by the time, effort, and various assessment costs that accompany selling).

Professional Tips for How to Invest in Physical Gold

Comparing an investment in gold or other precious metals to that of the stock market can be intimidating. Use Oxford Gold Group’s tips below for the top considerations:

Buy 24 Karat Gold

An ounce of 24-karat gold is almost identical to an ounce of a lower purity gold in terms of weight, however a certified trader will only accept gold specimens that are 99.5% pure or greater. The producer will present the gold’s level of purity as well as other details on the bar itself.

If you have any doubts or questions about the quality of the gold being sold before you finish the purchase, it is advisable to get in touch with a specialist like Oxford Gold Group to make sure it is reliable.

Track the Market

Knowing when to buy and sell is the most important aspect of trading, but gold is nowhere near as risky an investment as stocks and other instruments. Be careful when deciding where and how you will sell something. Sometimes, the best option for getting bullion might require searching for the most suitable dealer (they can provide competitive prices, and offer bigger savings when buying in bulk).

Avoid doing business with sellers who are pricing too high for delivery, handling payment transactions, authentication, and other costs. These fees will offset any returns quickly.

Investing in Gold Securities

Due to the various problems and restrictions of collecting pure gold, gold investing through stocks, funds, or options can be more suitable, especially for beginning investors.

They may not be as pretty, but they’re infinitely more practical:

Gold stocks

Investing in stocks of businesses involved in gold extraction, refinement, or other parts of the gold creation process is a possible route to take. Roughly three hundred of these firms, also referred to as “miners,” are traded on main stock exchanges. The value of their stocks usually follows the trends of the metal itself. However, the World Gold Council, an industry trade group, has stated that the development and yield of the stock are dependent on the company’s forecasted future profits instead of just on the worth of gold.

Gold ETFs and mutual funds

People who prefer to be on the cautious side can purchase stocks in mutual funds that focus on gold or ETFs. ETFs that depend on gold typically invest in the actual precious metal itself; on the other hand, mutual funds lean toward companies that focus on gold mining. Some funds invest in both. However, each provide a fluid, inexpensive way for accessing the gold business that is more diversified and hence less risky than investing directly in stocks.