Knowledge Center

Precious metals buyers guide

Protection You Can Hold

When it comes to protecting what matters most, you could think of precious metals similar to how you think of automobile insurance.

  • Car insurance helps to protect your assets in case of an accident or other loss to your vehicle. Precious metals provide a form of insurance for your family’s financial future and your buying power from things like dips in the stock market, devaluation of the U.S. dollar, and losses in your other investments.
  • Most people hope never to need to use their car insurance to recover from a car crash, but it’s nice to know it’s there. You might never "need" your precious metals during times of crisis either, but having them brings peace of mind. If a major financial crisis never comes, gold and silver are still a critical part of a balanced financial portfolio.

How does investing in precious metals protect you?

Hedge against inflation: Metals maintain or even grow your purchasing power, even when the dollar loses its value.
Portfolio insurance: Metals are a tangible, reliable asset and the price of gold and silver is NOT correlated to stocks or bonds, so if there’s a stock market crash, or the economic system is in crisis, precious metals can balance out losses in other assets.
Privacy and control: Physical ownership means no middleman, no Internet password, and no paper-trail. The assets are YOURS to hold and you control when to buy, sell or even use them as currency.

Metals Type

Gold

  • Higher price per ounce but smaller premium
    over the market price than silver.
  • Great for storing large value in small space.
  • Historically used as a global standard of wealth
    and is stockpiled by central banks, which
    proves how valuable it is.

    • Silver

  • More affordable per ounce than gold, but can
    have a higher premium.
  • Easier to trade in smaller amounts or even use
    for barter or currency.
  • Used in industrial/electronics applications,
    adding extra demand.

    • Form Factor

    Coins

  • Minted and guaranteed by governments (e.g.,
    U.S. Gold Eagle, Canadian Maple Leaf).
  • Widely recognized and can be sold or traded
    anywhere in the world.
  • Can have mintage limits or other factors that
    can make them more rare and valuable.

    • Bars

  • Lower premiums per ounce than coins since
    they are made by private companies instead of
    government mints.
  • Available in a wide range of sizes, shapes and
    designs.
  • Can be stored in smaller space than coins, due
    to their shape.

    • Asset Class

    Bullion

  • Coin or bar valued exclusively for its metal
    content.
  • Prices fluctuate with the global market – price
    changes every minute, like a stock.
  • For investors who want direct exposure to the
    commodities exchange or who may be looking
    to “play” the market.

    • Rarities

  • Coins valued for their scarcity and historical
    significance rather than just metal content.
  • Pricing is less tied to commodity prices and can
    go up, even if the metal price itself does not.
  • Less volatile valuations, appealing to collectors
    and investors alike; best for hold time of at least 3 years.

    • Funding Source

    Liquid Assets

  • Acquire metals with regular investible assets,
    like cash, credit or transfers from a banking or
    brokerage account.
  • Orders are delivered or shipped directly to the
    purchaser and can be stored or sold by the
    owner without any required record-keeping or
    paper trail.

    • IRA / 401K

  • Certain products can be acquired through a
    rollover from existing government retirement
    account or with new funds, through a self-
    directed IRA.
  • Metals can be bought and sold with tax-
    advantaged growth though metals must be
    stored by an authorized custodian.

    • Key Terms

    Bullion - Precious metals in bar or coin form that is valued exclusively for its metal content. Comparable to other commodities, like corn, wheat, crude oil, etc.

    Spot price - Current market price for an ounce of a specific metal, like the price per bushel of corn or barrel of oil. Bullion products are priced with the weight x spot price + product premium (to cover minting, distribution, etc.).

    Numismatics - The study of currency, including rare coins. Rare coins themselves are also referred to by this term.

    Karats - Different from “carat,” which refers to the size of a diamond, “karat” refers to the purity of gold, with 24 karat being considered 100% pure.

    The Bottom Line

    Like having insurance to cover damage or loss to your car, precious metals are a safeguard for your financial future.

    Whether you choose gold or silver, coins or bars, or rare coins versus bullion, the goal is the same: Peace of mind and protection.

    The experienced professionals at United Patriot Coin can meet with you one-on-one to help you build the precious metals portfolio that is right for you.