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Investing in Bullion and Bullion

Whether you run a business or are looking for personal investments, bullion continues to be a great strategy. Gold is regaining over 359% over the past 16 years, with demand from China, India, Germany and the United States being the engine of growth. Gold is a particularly safe haven in case of economic downturn.

However, it is not as simple as going to the bank to do this type of purchase. Like any investment, make sure you take the time to understand the ins and outs to make sure your investment is sound.

People are investing in gold for different reasons, while others are looking for greater portfolio diversification. Others think that precious metals are the only real class of assets that can protect individuals from an economic catastrophe. Anthony Allen Anderson, director of sales and marketing at GSI Exchange in Calabasas, Calif., Says, "We have seen massive destruction of wealth in the United States over and over again. History often repeats itself; those with gold and silver are insightful, realistic and financially secure. They never depend on a government or the trust of a credit rating agency. "

In this article, we seek to debunk the jargon and hype around investment in gold and silver bullion and to answer some basic questions of interest for novice and even experienced investors.

What is Bullion?

Bullion is the term used to describe a large amount of metal – usually gold, silver or platinum – that can be purchased in a block or bar. Most banks sell bullion or can also be purchased from a reputable dealer.

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What are Bullion coins?

Investment coins are simply a certain amount of a precious metal squeezed coin-shaped. Like bullion, investment coins can be purchased from banks and dealers. However, they can also be purchased from coin dealers as well as from the US Mint.

The best known investment pieces are the American Gold Eagle, the Australian Gold Nugget, the Canadian Maple Leaf and the South African Krugerrand. Since 1986, the American currency manufactures gold coins from gold, silver and platinum. They come from the American Mint in two forms: either a proof coin (sold to collectors) or the uncirculated bullion coin (sold to very few buyers and made specifically for investment purposes).

In addition, mint coins can be found from foreign governments, but be aware that the US government does not guarantee coins produced outside the United States.

How is the value of bullion and coins determined?

The value of the precious metal in investment coins is determined by determining the actual precious metal content in the bar or coin. As with many investments, the price of precious metals fluctuates daily. Before buying bullion or investment coins, as a dealer on the "value of the cast" for the bar or the coin. The value of the melt is the actual amount of precious metal in the bar or room that we find by melting it literally.

Tax Consequences

Holdings of precious metals such as gold, silver or platinum are considered fixed assets and, therefore, capital gains may apply. With respect to the tax, the IRS classifies precious metals as collectibles, and they can therefore be taxed at the maximum rate of 28 percent of recoverable capital gains. The actual rate that someone pays is determined by the holding time of the precious metals and the payer's ordinary tax rate.

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The investor must also determine whether the capital gain is short-term or long-term depending on the holding period of the precious metals. Short-term capital gains are taxed differently than long-term capital gains.

Where to Buy Bullion and Bullion

Bullion and investment coins are available from a major bank, dealer, or coin dealer. But be sure to do homework before making the purchase. Make sure the broker is trustworthy and plan to talk to an investment advisor who can help you understand the complexities involved in investing in investment rooms or investment rooms. .

Beware of Shopping

Like many other investments, it is best to be certain of what you get before paying your money to buy bullion or investment coins. Some dealers may increase the price of their parts, arguing the historical value of the piece.

Also, be aware of gold scams on the market; some sellers will ask buyers to deposit 20% in a leveraged investment scam. This scam demands a minimum down payment, but the buyer has to pay the storage fees and interest charges that are charged to the investment, which reduces the equity that the company has to pay. buyer holds in the precious metal.

Always research before you buy investment coins or gold bullion to make sure that the investment is made from a reputable broker and that you have made a good decision.