How to Invest in Gold and Silver

If you're one of the growing number of people starting to get interested in investing in gold or silver, start small with U.S. gold and silver bullion coins. Experts agree that the safest way to invest in precious metals is to hold physical gold and silver in the form of bullion and/or rare and bullion coins.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Paper money
• Courage

1. 
    
   Pre-1964 U.S. Halves, Quarters and Dimes contain 90% Silver

   Online, U.S. gold and silver coins can be found on Ebay as well as a number of reputable dealers. Before buying online I would recommend finding a local Gold & Silver Exchange or Coin Dealer near you and stop in and visit with the owner. Ask him about his commission rates for both buying and selling. Normally one would expect to pay 3-10% over the spot price of gold or silver for bullion coins such as the American Gold Eagle, Canadian Maple Leaf, South African Krugerand, etc. Dealers normally buy bullion coins back at the Daily Comex spot price. If they pay less than spot for gold or silver coins, look for another dealer.

2. 
    
   2008 Was Only Year Fractional 24k Gold Buffalo Coins were minted

   Another good way to buy silver is to buy Pre-1964 U.S. silver dollars, dimes, quarters and half dollars. These coins are 90% silver and their value fluctuates with the price of silver. These days they are sold at x-times their face value. A silver dollar contains .7736 ounces of silver, halves have .3618 ounces, quarters .1809 ounces and dimes .0724 ounces. With today's price of silver the content of a half dollar would have $6.33 worth of silver. 10% over spot on these types of coins would add $.63, making the sales price just under $7 a piece.

3. Rare and collectible gold and silver coins will sell above the spot price and those prices are determined primarily by numismatic factors such as mintage numbers and condition. Coins are graded on a scale of 0-70. For instance, a coin in perfect condition would be graded either MS-70 (for an uncirculated type coin) or PF-70 for a proof. An up-to-date coin guide will give you relative values of the various grades of any coin, but remember coins usually sell for far less than the catalogue listed prices. Haggle a little with your coin deal to try and get a better price than he's asking. He will usually come down from his listed price.

4. Make a habit of watching the prices of gold and silver. Daily and yearly charts are easy to acquire. Gold and silver usually move together in the same direction. Try to buy your coins when you believe the prices are near the bottom of a chart wave, or just buy the dips.

Tips & Warnings

• The U.S. Mint is a good place to buy certain gold and silver coins, when they are available.
• Bargains can occasionally be found on Ebay as well.
• Gold Futures and Options can provide great profits in the precious metals trade if you catch the right wave, but most people don't and you can lose a lot of money trading gold on the commodity exchange.
• Gold and silver stock prices fluctuate with the price of gold and can generate both profit and loss as well.
• Buying and holding gold and silver coins is the safest way to invest in gold and silver.