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A Complete Beginner's Guide on How to Buy Gold

Gold bar stack


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With 2021 about to end, inflation the highest it's been this century, and concerns the stock market bubble is about to pop, investors are wondering where to turn. Surprisingly, precious metals are not on the radar for many.

Do you know that you can add gold and silver to your registered retirement account? Not a surprise if you don't. With digital options like crypto currencies and ETFs getting centre stage, here's a primer on one of the oldest, and tangible investments: gold. 

Gold is a great industry to get into. The good thing about gold is that it will always be valuable even when its price fluctuates. And there are a variety of ways to invest in it.

All you need to do is read on to learn why you should be investing in gold and the many ways to get started today.

Who Invests in Gold?

Gold is a precious metal with many uses. For this reason, there are several types of people that will invest in gold.

The first use for gold that you probably think of is jewelry. Gold is a soft metal that can be shaped and shifted easily. This is one reason why it's so popular to make jewelry out of.

It's also why a lot of jewelry is very expensive to buy.

Industry and technology also have a lot of use for gold. It's not only easily shaped, but it's also highly conductive. This makes it perfect for creating electrical wires. 

For this reason, you'll find gold in a lot of your own household electronics. In a way, you may have already invested in some gold.

Finally, gold is a very expensive metal. It's hard to find and even harder to extract from the ground once you've found it. And the price of gold is always rising and falling.

For this reason, people will invest in gold as a sort of stock exchange. They buy when the prices are low, and then sell when the prices are high.

Why Should I Invest in Gold?

When paper money was first created, the idea was that there was either silver or gold somewhere to give that money value. There was actually a lot of debate between those who believed in the gold standard and those who wanted a silver standard at that time. 

But the fact was that gold was an extremely valuable metal even back then. This is why there were several "gold rushes" in the mid-nineteenth century. The miners at that time were hoping to become rich by finding gold.

Today, paper currency is referred to as fiat money. There is no gold or silver supporting its value. It simply has value because the public agrees that it does.

But gold is still extremely valuable, so people still hope to become rich quickly using it. However, rather than mining for it, they usually choose the easier option of investing in it. 

Many people do this during more uncertain economic times. It's believed that the gold standard will become relevant again if the current fiat money system should fail. This leads many people to invest in gold to protect themselves if that happens.

Supply and Demand

Like everything, the price of gold is largely dependent on supply and demand. It's believed that there is actually a lot of gold on the planet right now, but because it's hard to extract. This makes the supply lower than it could potentially be.

On the other hand, demand is going to change depending on the state of the economy. When people are trying to save their money more, this usually means that they aren't shopping for luxury goods such as jewelry. They might not even be rushing out to buy the newest piece of technology as much.

If these two major industries aren't in high demand, then the price of gold will go down to encourage more sales. And when the economy is good and these industries are doing well, then the price of gold goes up again.

On the other hand, when the price of gold starts to go down, this is the perfect time for people to invest in it. People who are looking to earn some money by investing in gold should choose these times to purchase it. Then they either hold onto it or sell it when the price of gold goes up again.

How to Buy Gold

All of this information is useless to you if you don't know the different ways to buy gold. The good news is that there are a lot of ways to do this, but there are a few things to look out for before you begin.


The first way that you can invest in gold is of course by buying jewelry. Gold jewelry has been part of many worldwide traditions since ancient times.

The only caveat with gold jewelry is that it's usually diluted in purity. This makes the jewelry more affordable for customers and also saves supplies so that jewelers can make more. 

At the same time, this also lowers the value of the gold when you go to sell it later. Once it's been bought and worn, the piece itself will start to lose its value like a car. For this reason, most people don't buy gold jewelry with the intention of using it as a gold investment.

If you happen to get lucky enough to get a piece of jewelry that's pure gold, however, then you might be able to get some money for it. These will maintain their value much better than a piece of jewelry that has a diluted purity. It's the kind of jewelry that families will sell if they need some extra money.

Otherwise, most people will leave this kind of jewelry to their heirs instead of selling it for profit.

Physical Gold

Another way to invest in gold is to physically buy it. This is a great way to do that since you can ensure that its value will remain consistent with the market price. You can get it in either bullion, bars, or coins.

If you're investing in gold in case the fiat money system starts to fail, then this would be one of the best ways to go about it. No one can deny the value of the gold and no one can deny that you own that gold when you do this. You just have to be smart about when you purchase it.

Again, a smart investor will purchase gold when the price of gold is low and then sell when the price is high. When you're purchasing gold this way, you also need to consider the cost of processing that gold. For example, turning gold into a coin costs money.

That isn't to say you shouldn't buy gold coins at all. But you should watch the market price of gold to determine the best time to buy it. Bullion and bars also cost less to create.

Then you have to determine where you're going to store it. Bank deposit boxes have a monthly charge to keep these things there. The best and cheapest storage option would probably be a fireproof safe in your home.

Looking to invest in physical gold? Check out our collection of gold bars and coins here.

Gold Certificates

These certificates don't actually provide you with physical gold. They indicate that you're entitled to a certain amount of gold held by a company. In a way, it works similarly to a bank in that you're trusting them to maintain your share, but they don't have it sitting in a lockbox with your name on it.

This means you don't need to worry about storing any physical gold, but you still technically own it. 

The only issue is that this means that the certificate is only as good as the company selling it to you. Suppose they've been lying about how much gold they have in their safe or maybe they simply miscalculated. Your certificate might end up being worthless if you buy from an untrustworthy company.

One solution is to buy allocated gold certificates. This means that the company has set aside specific pieces of gold just for you instead of keeping it all in one place like a bank would. It costs a little more, but it gives you a bit more peace of mind when you go to sell it later.

Gold Mining Stocks

Stocks are a great way to invest in gold without actually owning it. One problem that gold has been criticized for is that it doesn't grow. If you buy one bar of gold, you will still have one bar of gold when you go to sell it later. 

Investing in stocks, however, works a little differently. The value of these stocks is often heavily dependent on how well the mining company does. In other words, if the mine produces more gold than expected, then the value of the stocks will go up.

In that sense, stocks have a lot more potential for growth than owning gold does. But this can be a double-edged sword. What happens if the miners go on strike or don't find as much gold as expected for example?

You'll still be in the same boat of trying to buy when prices are low and selling when prices are high. But it can be harder to predict what a company and its employees are going to do. This adds a level of uncertainty that you won't get from owning physical gold.

If your stock value drops, there isn't much that you can do. But if the price of physical gold goes down, then you can always hold onto it until it goes back up again.

Streaming and Royalty Companies

Streaming and royalty company stocks are a little safer than actual mining companies. These companies will buy gold directly from mines at low prices. This gives them the benefit of the gold's value without actually needing to worry about what the mine is doing.

These companies then turn around and sell the gold themselves for a profit. Again, the better these companies are doing, the higher their stocks will be too. 

The only caveat is that gold isn't usually the only thing these companies invest in. Some companies will invest in silver or precious gems while others will deal in oil and gas as well as gold. This gives them more security when the price of gold goes down.

All this means is that you want to do your research on these companies before you choose one to buy stock in. And pay attention to market trends to try and have an idea of what's ahead. If the price of gold and oil goes down at the same time, for example, this will lower the value of your stock.

Should I Buy Gold?

There are many benefits to buying gold. Gold jewelry is beautiful and stylish to wear casually or to formal events. And gold coins, bars, and bullion give you something to lean on if something happens to the fiat money system. 

It's also simply not a bad investment to make to earn a little extra money. You just need to play your cards right first. 

For starters, pay attention to the market prices of gold. This will let you know the best times to buy and sell. 

One great piece of advice is to make sure you don't dump your entire savings into gold right away. Start small and when you sell it, use your profits to buy more. This will be the best way to earn money by buying gold.

And if you buy physical gold, make sure to keep it in a safe place from thieves and fires.

Start Investing in Gold Today

Now that you know how to buy gold it's time for you to start investing. It's a great way to protect yourself if the fiat money system ever fails. And it can also be a good way to earn a little extra money for yourself.

And there's nowhere better to get it than at Sprott Money. We've been distributing precious metals since 2008 and we're happy to help you find the right options for you.

Buy from us today to start investing in gold.

Don’t miss a golden opportunity.

Now that you’ve gained a deeper understanding about gold, it’s time to browse our selection of gold bars, coins, or exclusive Sprott Gold wafers.

About Sprott Money

Specializing in the sale of bullion, bullion storage and precious metals registered investments, there’s a reason Sprott Money is called “The Most Trusted Name in Precious Metals”.

Since 2008, our customers have trusted us to provide guidance, education, and superior customer service as we help build their holdings in precious metals—no matter the size of the portfolio. Chairman, Eric Sprott, and President, Larisa Sprott, are proud to head up one of the most well-known and reputable precious metal firms in North America. Learn more about Sprott Money.

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