FAQs About Gold Bullion

  1. What is gold bullion?

Gold bullion is gold in the shape of bars or coins. It’s mainly bought as an investment or to save money. Bullion’s worth is based on how pure and heavy it is, not its value as money.

  1. How can I buy gold bullion?

Gold bullion can be primarily be purchased from bullion dealers and the bank, however, you might be able to find them at jewellery stores as well as pawn shops. Sometimes, you can also purchase them directly from the Mint/refinery. Make sure to buy from someone you can trust and check if the gold is real and pure. 

  1. What’s the difference between a gold coin and a gold bar?

Gold coins are issued by governments, have a money value (but are usually worth more than that), and often have detailed designs. Gold bars are simpler and are usually made by private refineries. They’re just about the gold’s weight and purity, and are good for big investments.

  1. How do they decide gold bullion’s price?

Gold bullion’s price mostly comes from gold’s “spot price,” which is how much it costs in the market right now. This can change based on supply and demand, money values, how much things cost (inflation), world events, and how people are investing.

  1. What do ‘spot price’, ‘premium’, and ‘spread’ mean with gold?

Spot Price: This refers to the current market price of gold.

Premium: The extra cost on top of the spot price. This includes making and selling the gold, a small extra charge from the seller, and extra value for special coins.

Spread: The difference between how much you can buy and sell gold for. A smaller spread means it’s easier to buy and sell.

  1. Do I have to pay taxes on gold bullion?

This is determined on where you live and where you are purchasing the Gold. If you are in Canada, gold bullion purchases are exempt from taxes as long as they are 99.5% pure and above. 

  1. How should I store gold bullion?

Keep your gold in a safe place where it won’t get stolen or damaged. Options include a safe at home, a bank’s safe deposit box, or with a company that specializes in storing gold. Think about getting insurance and making sure it’s secure.

  1. What are the risks of buying gold bullion?

The main risks are changes in gold prices, the chance of theft, and accidentally buying fake gold. Gold doesn’t earn interest like savings or dividends like stocks, so you only make money if the price goes up.

  1. Can I use my gold as security for a loan?

Yes, some banks and lenders let you use gold as security for a loan. How much you can borrow and the interest you pay depend on your gold’s quality and value.

  1. How do I sell my gold bullion?

You can sell your gold to coin stores, gold buyers, some jewelry stores, or online. The amount you get depends on gold’s current price, the type and weight of your gold, and how much extra you paid when you bought it.

These FAQs give a simple overview of gold bullion and its use as an investment. For more detailed advice about local tax laws, changes in the market, and what’s best for you, it’s a good idea to talk to a financial advisor or a gold expert.