8 Things For Beginner Gold Investors To Know

8 Things For Beginner Gold Investors To Know

Investing in gold is one form of halal investment that has been practiced since ancient times. The reasons people like investing in gold are because it is relatively safe, its value always increases in the long term, and its easily traded when in need of money.

A recent Gallup poll discovered that 34% of American investors ranked gold as the best investment “regardless of gender, age, income or party ID. . .” In that survey, gold was rated higher than stocks, bonds, real estate and bank savings.

There are a few things to consider before you decide to buy gold.

1. Decide what type of gold you should buy   

Gold Bars Brand  8 Things For Beginner Gold Investors To Know 1 Oz Gold Bar Brand of Our Choice

Gold Bars Brand

Deciding what kind of gold to purchase depends upon your goals. If you want to make a long-term investment, gold bullion or coins would be an option. Precious metals in the form of coins or bars usually have high levels: 22% or 24% or the percentage is 95% and 99%. When we compare bullion and coins, gold bullion bar sizes are generally, one ounce, ten ounce, kilo (32.15 troy ounces), one-hundred ounce with refineries: PAMP, Credit Suisse, Johnson Matthey, Royal Canadian Mint, Metalor, etc. Smaller units of gold bars are in the 1 oz, 50 g and 100 g bars sizes.

Gold coins, however, are available in a variety of sizes such as 1 0z (28.35 g), ½ oz (14.18 g), ¼ oz (7.9 g) and 1/10 oz (2.84 g), with various designs like Contemporary Gold Bullion Coins with the United States Eagle, United States Buffalo and Historical Gold Coins (Pre-1933) like that of the Great Britain Sovereign Queens, and the Great Britain Sovereign Kings. Coins are also very flexible in terms of easy storage and ideal trading.

Coins  8 Things For Beginner Gold Investors To Know coins


Its been quoted by bullionbypost that novice investors or beginner investors should buy coins and bars, though the coin is desirable to lower the value of investment. And from USA gold, for the individual investor who demands more flexibility with regard to both portability and liquidity, gold coins fit the bill perfectly and are by far the most popular form of gold ownership.

If you want to buy gold as an investment and as jewelry to wear then choose jewelry that is not too complicated, because the more complex the jewelry you buy, the less the value there because of service cost. Therefore, the buyer must pay the price of gold plus the cost of manufacture that can reach 20% -30% of the gold price (depending on the complexity of the design).

2. Learn the basic price of gold

This is required so that when you buy gold in gold shops you can know the gold base price, and you can negotiate the cost of printing gold bars, coins, or jewelry. Many websites provide information of the gold prices per ounce, per gram, or per kg at the time at your visit. For example, in goldprice, gold-price, and goldpricenetwork.

3. When should you buy gold?

There are no specific standards concerning when to buy gold. Buying gold is not like buying stocks that have to be monitored for the rise and fall of the price, but to reduce the risk you should not buy gold at one time. So if the prices go down in the next few days, the loss is not too high.

In Saudi, popular times of the year to purchase gold and silver are during religious holidays including Ramadan (Islamic month of fasting) and Eid-Al-Fitr (celebration after Ramadan), Hajj (yearly pilgrimage to Makkah), Eid-Al-Adha (celebration after Hajj), and during the wedding season.

4. Percentage to invest in gold

This can actually be determined depending upon which individual money portfolios will be used to buy gold. CNBC television commentator Jim Cramer strongly advocated a 20% gold diversification. Most financial planners suggest setting aside 30% of your wealth for investment and for diversifying your investment into a few types of halal investments.

5. Choose where to buy gold

You can buy gold bullion or coins through a bank or an official gold manufacturer. Currently, many gold shops usually sell not only gold jewelry but also gold bars or coins. As with other products, buying gold at a gold shop in the mall is generally more expensive than in the traditional market.

6. Pay attention to the authenticity of the gold

In order to guarantee the authenticity of the gold, buy gold bullion or coins that are certified.

7. Variation of gold investment

Choose gold bars/coins in various weights, so if at any time you need money and want to sell the gold you do not need to sell the entire large size. Suppose you buy a gold bar weighing 100 grams. If you one day need money that is only the equivalent of 50 grams of gold then you will be forced to sell the 100 grams entirely. It’s easier if you have 100 grams of gold which is divided, for example, 10 bars of 10 grams. It will also reduce the risk of loss if you lose any of the gold as you will not be losing the entire 100 grams. However, please note that the price of gold per gram in the bigger bullion is much cheaper than the smaller bars so the price per gram of a 10 grams gold bar is less than 5 grams or 3 grams.

8. Think of how to store the gold

If you want to keep your gold at home, make sure to keep it in a safe place, such as in a safe deposit box. But if you are not sure of your home security, you can also rent a safe deposit box at the nearest bank and pay the annual rental fee. This is a concern because gold is equal to cash and anyone who steals the gold could easily sell it to others.

Happy Investing!

Delina Partadiredja

The author has been writing since elementary school. Prior to be the in-charge person for contents she often contributed to an Islamic website. Further, she has co-authored two books and one book of poetry. Her previous banking career followed her completing Bachelor of Economics. She obtained an MBA from Leicester University in the UK. She currently lives in Jeddah, Saudi Arabia.

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