How to invest in Precious Metals – Options for protecting your Savings and Wealth
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I have had an interest in precious metals ever since I was really young. In those days my interest was limited to old coins mostly, which I knew had value because of their scarcity as well as some value based on the amount of silver each had. That interest continued to linger over the years, until I began actively investing and developing my own portfolio. I then looked into precious metals, gold primarily but quite a bit of silver and some platinum as well, to balance out the more ‘traditional’ forms of investment…mutual funds, stocks and bonds. Today, I have a fairly substantial amount of my savings in precious metals, in various forms several of which are listed below.
Why then should you choose to invest in precious metals? Some do because they like having the coins or bullion on hand (and to be honest, some of these pieces really are great looking), but for most, precious metals are a hedge, a form of wealth protection. Insurance and protection against any number of things from inflation, a declining dollar as more currency is printed, political or geopolitical uncertainty, recession…and the list goes on. So how do you invest in precious metals, whether it is Gold, the most popular, Silver or possibly Platinum or Palladium?

Each precious metal has its own drivers that effect performance for that metal. Commercial demand and Industrial demand are the two greatest factors that drive spot prices, but increasingly we are seeing more banks acquiring gold, and more individuals doing likewise really as a combination of a hedge / protection strategy and means of portfolio diversification. Take a look at the Gold vs Silver discussion from the pull-down menu at top, which should help provide some clarity.
There four (4) main areas that one can look to when seeking to invest in Precious Metals, each discussed below. In general, these are as follows:
Why Invest in Precious Metals?
- Investing current savings (401k, IRA, etc.) into a Gold or Silver IRA
- Buying hard bullion
- Buying various funds or ETF’s invested in precious metals
- Investing in miners
With the goal of preserving, if not growing, your long term wealth and savings, there are numerous reasons to have part of your portfolio in precious metals. Here are some of the benefits:

Protection through diversification – Having precious metals within a balanced investment portfolio can help ensure the overall risk is substantially decreased, helping to protect against market shocks, inflation, currency devaluation and financial crisis as well as geo-political uncertainty, natural disasters and war. Gold has proven to be incredibly resilient during turbulent times. Unlike a stock, where the underlying firm can fall on difficult times or even go bankrupt, or a bond where the issuer may default on a coupon or redemption payment, there’s really no such credit risk in gold.

Growth potential – Gold and silver are two of the most coveted metals on earth, with overall demand continuing to outstrip supply. Today, newly-mined gold can only meet about two-thirds of current global demand, with the balance of demand being driven by “recirculated” gold and silver, driving up spot prices. In addition, central banks are no longer net sellers of gold as they had been, and commercial and industrial demand continues to increase. Weaker stocks and other paper investments is driving even greater demand for precious metals.
Inflation Hedge – The Fed is printing more money, by the day, and prices continue to rise. Your cash, or any of your paper-based investments, are effected by inflation as your purchasing power goes south. Precious Metals experience somewhat of the opposite effect and maintain your purchasing power. Numerous studies have shown that having a portion of savings in metals can improve purchasing power over the long term, especially as the real value of most major fiat currencies declines.
Tax benefits – In the case of an IRA or 401k rollover, there are no penalties and payable tax involved in any gold IRA transfer, or 401k rollover, because it falls under an investment category which is considered to be tax-deferred if this is how you wish to invest in metals. You will only have to pay for tax during withdrawal in the form of distributions. You also have the flexibility to set up a self-directed gold IRA in the form of a Roth IRA or a Traditional IRA. Buying and selling hard bullion does have the potential for capital gains however.
Family & Legacy – Provide safety, stability and security for family by not leaving a spouse or children behind without tangible assets, or assets that have had a devaluation for the reasons discussed earlier. Gold has been shown its strength over the years, and is expected to so in the years ahead.
How To Invest in Precious Metals
OK, so now let’s take a look at what are considered to be the four main options that can provide you valuable access to investing in Precious Metals
#1 Gold IRA / 401k

To many, this may be something new, but for a growing number of Americans, it is becoming a valuable means of protecting wealth and ensuring investment stability. So what is exactly is a Precious Metals (typically Gold based) IRA?
A Precious Metal IRA, of which Gold is by far the most popular, is an investment vehicle which simply allows the investor to own physical gold, silver, platinum or palladium, in the form of coins and bars, within their tax-sheltered retirement accounts, instead of paper-based assets such as cash, stocks and bonds. The process is relatively straight forward in that funds from your IRA, 401k, 403b, etc. are rolled over directly from one custodian to another. The custodian of your new Gold IRA then holds those funds in the form of actual gold, silver or platinum for you.
For more in-depth information on this innovative and safe alternative to portfolio diversification, please visit our sister site at TopGoldIRAFirms. We have also listed a few trusted names in this space below, and invite you to take a look at what they can offer and engage them for more in depth discussions.

#2 Buying and Holding Bullion

By far, one of the most popular ways of owning bullion is to buy actual coins and bars and holding on to them. There is a premium in doing so, and depending on where you go that initial premium may be rather significant. If this is the how you want to invest in Precious Metals, best to check out several different providers before making that decision. These can be as easy as the mom and pop coin store around the corner or the local pawn shop, where the premiums to purchase may well be quite high, up through larger online entities that deal in higher volumes and are able to provide more competitive pricing, and other services.
A key benefit of actually buying, and holding, bullion itself is that it can be rather liquid. The same entity you purchased from will usually buy back, but again, at a bit of a premium in their favor. If you like viewing your coins, and if you are like me, I do appreciate the coins even if they are somewhat generic, then having them on hand may be appealing. The main issue though of course is storage. Not easy holding on to 2000 silver eagles somewhere in your home or garage, or worrying about the 100 Krugerrands you have stored in a box in the back of your closet. Safety deposit boxes may be a solution, but convenience, cost and available space are the concerns there. If you are looking to go this route, utilizing entities that provide storage in addition to buying and selling, may be the best path. As a final note, be aware that precious metal bullion is considered a collectible by the IRS, and is therefore taxed at the rate of 28% (!).
#3 Mutual Funds or ETF’s

For many, placing funds in mutual funds or ETF’s is their approach to investing in precious metals. You may not have access to the physical commodity, but you have exposure to the Precious Metals market and its performance.
Depending on how you invest in a fund or ETF, you may be fully aligned with the movement of the commodity, or that vehicle may be further diversified into companies actively and directly tied to the metal, or in some cases much more loosely correlated. Most funds in general will still follow the rise of the underlying metal, but depending on what type of assets in that fund, those gains may be paired back somewhat depending upon what other issues the underlying companies may have, which will have nothing to do with the price of gold, silver, platinum or any other metal.
Before investing in a mutual fund or ETF, and for many this may be a very viable option, it is always best to understand what the investment profile of that vehicle looks like, what else the fund may have in an interest in, how it has performed compare to the price of the underlaying asset over the years and how the fund may rank on various rating services.
#4 Investing in Individual Miners Stock / Share

Shares of precious metals miners tend to be leveraged to price movements in the precious metals that they are most active in. As with any investment in stocks / shares, it helps to have an in depth understanding of what that individual company is all about from a balance sheet and income perspective, which takes some time and of course effort.
As with any publicly listed entity, miners are subject to the whims of the market, their balance sheet and other issues that go well beyond the price of the metals they are mining. There may be a geopolitical issues in the country where they mine, a strike or labor tension, a mine that has since gone dry, weather issues, and so much more.
Miners tend not to move in exact proportion with the price of the metal they are mining. When down, their drop may well exceed the base metal, however conversely when that metal rises, especially if is above their marginal cost of production, the upside may well accelerate well beyond the percentage gain in that metal…so long as there are no other issues relating to the business as mentioned prior. Miners are definitely a means of investing in precious metals, although they do have the potential to fluctuate quite a bit more than the base metal.
Consultations
It can be a headache trying to choose the right approach to investing in Precious Metals, but taking the time, and effort, to educate yourself is not that difficult as there is plenty of material readily available. We do offer some more in depth detail here, just take a look at the pull down menus on top. Depending on what your investing profile is like, your risk appetite, how diversified you would like to see your portfolio, and more, how you approach investing in precious metals may well vary from others you know. Regardless, most seasoned investors do believe that a portion of your portfolio should be invested in metals.
If you’ve decided to roll over to a gold IRA account, you should always consult a real trusted professional to help answer your remaining questions regarding your rollover process as well as any future tax issues. Some items to consider when investing in a Precious Metal IRA or when consulting one of the firms may be as follows:
- IRA Setup Fees and Storage Fees – There could be a scaling administration and storage fees scheduled annually for most of the gold IRA custodians
- Precious Metals and Storage Facilities – Ensure that you purchase only the investment grade precious metals that are acceptable for IRA
- Buyback Program – Is there a buy back program available with the company for the precious metals you purchase?
- Types of Metal – All do provide Gold, but if your interest is in metals beyond Gold, dig a little deeper into what may be on offer
Hopefully we have provided you some helpful thoughts here, and that you have had a chance to view the additional details in the pull down menus. We are not offering financial advice here, and strongly suggest you reach out to a professional before making any kind of decision, but did want to provide you some insight as to what might be available.
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