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Investing with Precious Metals for Beginners

Investors are now looking into precious metals like gold bars, jewelry, mining stocks, and other alternative assets to invest in for more diversification. However, where do you start when you want to invest in them?

It’s worth noting that not all precious metals qualify as an investment, especially if you’re planning to open an individual retirement account. Fortunately, you can save yourself from the industry’s complexities by relying on professionals. If you need help with what to do, speak with your financial advisor and see if gold, silver, platinum, and palladium fit your goals and long-term strategy.

Things to Know Before Investing in Precious Metals

Selling gold bars and coins can be a very lucrative job. This billion-dollar industry is expected to grow in the next few years. However, so many entrepreneurs are folding within a year after they’ve decided that precious metals are excellent investments.

Most professionals cannot live with their reputation because they need to determine the right pricing or sourcing in the industry. When you want to be respected, you have to be an expert in testing, estimating, and sourcing different kinds of bars and coins to determine whether they are genuine.

Here are some basics and a quick guide you need to know when you want to get started with gold.

About the Sourcing

Your first goal in the industry is to form a solid relationship with wholesalers and retailers. The dealers have very low margins, especially when they are just starting. If you’re planning to grow rapidly, it’s best to get into the game of determining who are the legitimate companies and brokers. Visit the PWYP site when you want to read about in-depth company summaries in the industry. These blog posts will also have tips on how you will be able to choose the right brokers to invest in and those who are trusted in the industry.

When you’re buying low and selling high, it’s common to amass an amount decent enough to expand. Others who are already experienced might even reach seven figures before long, but when you don’t have their knowledge and expertise, it’s always best to start small. Get the ones that were directly coming from the mints if you’re in doubt about a specific dealer.

If you’ve purchased the first bars and coins from an accredited mint, know that you’re not yet there. Visit pawn shops, auction houses, and showrooms to familiarize yourself with the look and feel of gold bars and coins. See if you can purchase some scrap jewelry that you can buy cheaply from auctions.

Get a deal with a local midsize dealer to get metals at a more cost-effective price. Accounts with banks that have unpaid balances with gold or silver can also sell low, and there’s a depository where you can keep everything. It’s best to stay away from classified ads and other sites to avoid getting scammed. Trust the highly-trusted local suppliers so you’ll always be on the safe side.

How to Do Tests

There are various testing methods to check if the precious metals that you’ve purchased are legitimate. This step is often skipped when buying wholesale because the suppliers work with third-party testers and analysts to ensure that their bullion and coins are authentic. However, when you want to make sure that what you’re buying is legit, here are some tools to help you out:

  • Acid Tests
  • Electronic Use
  • XRF or X-ray fluorescence

Although you must check the hallmarks, design, and print on the coinage or bullion, you can easily receive a fake these days. With the hand-testing method, you can always ensure that the platinum, palladium, gold, and silver metals have the qualities you’re looking for. DIY acid tests are available online, and there are in-depth steps that you can follow when you check your search engines. These low-cost materials can also provide accurate and correct information in real time.

Some electronic methods will be effective for coins and bars that are 14-carat or lower. However, these bars and coins can be misinterpreted as gold-plated, which is not true. These devices for testing are available on various online platforms, and you can purchase them for less than $300.

When you want more advanced options, get the very reliable XRF. Although this tool can be expensive, it can tell you whether a metal is genuine or not in less than a minute. This is ideal for people who have invested five to six figures into the precious metals industry.

The equipment is decent, and getting one is highly recommended when you want a more reliable testing method and if you’re planning to invest for the long term in precious metals. Get more info about XRF on this webpage here.

Estimates

As an entrepreneur, you need to correctly estimate the value of your holdings, especially if you’re in the process of selling. The goal is to make a profit, and this is where the buy low and sell high method applies. When you’re trading scrap metal, know its value and the cost of refining, shipping, and buying so you will get out with a decent gain.

Check the market’s pulse by downloading an application or checking various websites for the current price charts. As a good rule of thumb, the closer you are to the 24-karat pure gold mark, the higher the value of your bars and coins will be. The industry often has a formula that consists of purity, spot price, and the cost per gram of your bullion, so don’t hesitate to ask the experts if you want guidance.

When you want to be a professional in the industry, you can also connect with companies with resources and tips to help you out. They have brokers who have been trading, buying, and selling gold and other precious metals for decades, and you can find them very helpful. The results matter, so ensure that you only connect with accredited estate sales, pawn shops, auction houses, and dealers in the industry.

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