Last Updated on 10 months by Anoob P T
Gold is never a bad investment. Here is a step by step guide on how to buy gold in Canada if you are looking at gold as an investment.
How to Buy Gold in Canada: Step-by-Step Guide
The idea of buying gold can confuse you in deciding how to buy or where to buy. There are mainly three options in buying gold in Canada. As much as it may sound easy, you have to take care of a few things when dealing with gold.
You can invest in physical gold, gold on the stock market or gold via CFDs.
Table of Contents
Investing in Physical Gold
When it comes to physical gold, it is more about the real metal which could be in the form of gold bars or coins with a purity of 99.9%. you can also invest in gold with purity of 22K which is found as jewelry and alike.
To some extent, buying physical gold can be preferred because it does not have an intermediate. You are the sole owner of your gold.
This could be like buying the real physical gold or signing up for a contract which gives you gold in future at a price when the contract was made.
The physical gold you buy can be in the form of bullions. Even though many people think of this as stacks of gold bars or coins, bullions simply mean the purest form of gold. The purity is not affected by whatever shape it has; coin or bar.
The advantage with physical gold is that it can be sold to anyone and at anyplace.
If it is from an LBMA certified refinery as a bullion, the price you get from gold have chances of being doubled.
The question of investing in a gold coin or gold bar can be argued depending on the preferences of the buyer. Both these forms of gold have their own advantages and disadvantages.
Gold coins are smaller compared to the bars and hence, easy to carry and store. Moreover, they attract investors because of being a convenient option.
You can also liquidate a small portion if you need cash for some sort of emergency. If you are looking for a sizeable investment, gold bars are preferred.
They are expensive than coins, which makes them an effective option for big investments.
When buying physical gold, you have to look for a reliable supplier who offers competitive and reasonable prices, excellent customer service, and safe delivery (or potentially reliable storage services).
The Australian Kangaroo, the American Gold Eagle, the Canadian Maple Leaf and the UK’s Gold Sovereign are some of the commonly traded bullion coins that are easy to sell.
Investing in gold on the Stock Market
You do not need to buy gold in order to profit from it. By investing in gold on the stock market, you will get profit with the gold price fluctuations.
As an investor, you can buy share in companies that have exposure to gold, like gold miners. There will also be other investors to pool money their resources in such investment funds.
Otherwise, it is possible to buy units in a gold-themed exchange traded fund (ETF).
The biggest advantage of an ETF is that the funds are managed by gold experts. This can help you to gain profit in a much better way.
In fact, you are not investing in gold but in the performance of a gold company or mining industry. In an investment like stock market, you will not have the usual hassle in buying physical gold like buying, storing and insuring it.
However, the usual risks of stock market are always present in such investments. These are mainly market volatility, company bankruptcy and the possibility of losing your investment.
The main reason for these risks is that the stock price of gold-producing company is dependent on its individual performance rather than on the performance of gold as a commodity.
Investing in gold via CFDs
CFD stands for Contract For Difference. You can invest in future markets and price movements through CFDs.
You can earn profit from the bond price movements in CFDs. It does not matter if the price is falling down or rising up.
However, this investment is ideal and suitable only for advanced traders. Investing in gold via CFDs are highly risky.
What Should you know Before Buying Gold?
- Location: One of the most obvious options you choose for buying gold is a store like jewelry. The location of the dealers can hence influence your choice of buying gold. There are a lot of gold dealers in Canada.
- Online Gold options: Apart from the local stores, you can find dealers in many online platforms. This is in a way a convenient option and you will have more choices than in offline. However, make sure to do some research before paying money to buy gold through these online dealers.
- Quality of gold: It depends on the manufacture and refining process. Also, the quality can vary based on the product you are buying. There are variations in the gold percentage used in gold coins and gold bars. These need to be taken care of by the investor.
- Bullion DNA: The Bullion DNA technology prevents counterfeiting by scanning and detecting the authenticity of Gold Maple Leaf 1 oz coins dated 2014 and onwards and Silver Maple Leaf 1 oz coins dated 2015 and onwards. If you’re interested in buying these types of assets, look for a registered Bullion DNA dealer.
- Premiums and commissions: You will have to pay a commission to the dealer from whom you are buying gold. Also keep in mind that you will be charged for checking the purity and verifying the authenticity of gold. Make a proper calculation and always go for the best and profitable deal.
- Compare price to Canadian gold price: Mostly, gold prices are given in US Dollars. Check with the price in Canadian dollars and compare before choosing the best price for you.
- Delivery: Besides buying gold and authenticity of the dealer you meet online, ensure about the safe transportation of your gold. Your gold has to be insured in order to protect it from any accidents during delivery. This can save your money till the gold reaches you.
Frequently Asked Questions about How to Buy Gold in Canada
What is the best way to buy gold in Canada?
Best way is to buy physical gold which you can purchase from Canadian banks and you can purchase gold bars and coins directly from the Royal Canadian Mint.
How do I start buying gold?
You can start with physical gold, Gold Futures, ETFs etc.
How can I buy gold bullion in Canada?
You can choose Royal Canadian Mint bullion products
Is it cheaper to buy gold in Canada?
Gold coins can be cheaper to buy in Canada.
Is gold a good investment in Canada?
Yes, Gold is a good investment in Canada
Is it legal to own gold bars in Canada?
Legal-tender coins produced by the Royal Canadian Mint are RRSP-eligible. Bullion bars are eligible for RRSP gold investing if they are produced by a metal refinery that is accredited by the London Bullion Market Association.
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