Rod from Kentucky asks “Which gold investment is best?” a question with as many answers as there are stars in the sky!
Bullion.Directory’s Ask Ally Service
By Alison Macdonald
Commercial Editor at Bullion.Directory
‘Best’ is of course a subjective term, and what’s best for one investor might not be for another. To best answer the question I’ll break it down from various angles – this way Rod (and anyone else) should be covered.
Which Gold Investment is Best for Profit Potential?
If we’re talking about sheer profit potential, gold bullion coins and bars usually come out on top.
They’re tied closely to the market price of gold with the lowest possible premiums, making them a straightforward choice for capitalizing on gold’s price movements. Typically the larger the gold bar you can buy, the lower the premium, and again typically poured bars can be had at lower premiums than minted (pressed) bars. When buying larger bars do bear in mind that larger bars can be less liquid (less easy to sell) in a hurry.
Bullion coins like American Eagles or Canadian Maple Leafs are always popular due to their liquidity and recognition, and while they may carry a larger buy premium, they can also be sold at a premium too.
For those wanting coin-like liquidity at the lowest premiums, generic rounds are often the way forward.
Which Gold Investment is Best Value?
For best value, you’ll want to look at gold bullion with the lowest premiums over the spot price. As mentioned already this often means larger bars as bigger the bar, the smaller the premium.
But remember, larger bars aren’t always as liquid as smaller ones – or coins.
Many of the large dealers will run regular promos – 10oz silver bars seem a common offer – where they will sell generic bullion, or pre-owned bars at close to spot. It’s worth signing up to a few mailing lists to stay abreast of offers – from the likes of JM Bullion and Silver Gold Bull.
Which Gold Investment is Best for Ease of Resale?
Liquidity is king when it comes to ease of resale.
Again, popular bullion coins like the American Eagle, Gold Britannias or Canadian Maple Leaf are winners here. They’re recognized worldwide and are always easy to sell.
Which Gold Investment is Best for Gifting?
Gold coins or small bars make great gifts.
They’re tangible, hold intrinsic value, and are relatively easy to store and transfer. Coins below 1oz in weight (fractionals) are always popular gifts due to their lower cost – although their smaller sizes do carry a greater premium – because the fixed costs of every coin (minting, packaging and wholsealer shipping) are broadly the same whether it’s 1oz or 1/10oz.
Coins with historic or aesthetic appeal, like the patriotic American Buffalo or beautiful Austrian Philharmonic, can be particularly special as gifts.
Which Gold Investment is Best for Tax Advantages?
In the realm of tax-advantaged gold investing, for those in the US – anything inside of a Gold IRA is a standout.
They allow you to hold physical gold in a retirement account, potentially deferring taxes until retirement in a traditional IRA or selling at retirement free of tax in a Roth.
The key here is to ensure the gold meets IRS purity standards and is stored in an IRS-approved depository – which sounds complex, but as long as you deal with a top-rated gold IRA specialist, they will ensure you stay on the right side of IRS regulations.
Other countries have similar tax advantaged programs such as Gold SIPPs in the UK, Gold RSPs in Canada and Gold SMSFs in Australia – each with their own complex rules – which are always worth overcoming due to the tax advantages available.
In short, with up to 40% equivalent savings available, why would anyone NOT take advantage?
Which Gold Investment is Best for Inheritance?
For passing down wealth, gold bullion coins and bars are a solid bet.
They’re tangible, long-lasting, and universally valued, providing a concentrated form of physical wealth. Their ease of storage and transfer makes them practical for preserving wealth across generations.
They don’t rust, they don’t rot and in some countries can carry inheritance tax benefits.
Adding the fact that they offer long-term gains which at least match inflation and regularly beat it, you can see why gold is one of the most common vehicles after land and real estate for passing on multi-generational wealth.
Which Gold Investment is Best for State and Federal Tax Considerations?
Regarding taxes, it’s essential to consider both federal and state implications.
While federal tax laws are uniform across the U.S., state taxes can vary. Some states exempt gold purchases from sales taxes, while others don’t. Some specify a certain purity, some have minimum and some have maximum purchases before tax takes effect.
Some tax silver, platinum and palladium, whilst letting gold go. It’s all a bit of a mess – and so its crucial to check your state’s regulations before making a purchase.
In Kentucky, there’s a uniform sales tax of 6% across the state, and local municipalities don’t add any additional sales and use taxes. It’s important to note that in Kentucky there are no specific exemptions provided for bullion, coins, currency, or medallions that are crafted from gold, silver, or other precious metals.
To summarize, the ‘best’ gold investment depends on your goals – whether it’s profit, value, liquidity, sentimentality, tax efficiency, or legacy planning.
Each type of gold investment has its unique advantages and trade-offs. It’s wise to consult with a financial advisor who is well-versed in the nuances of gold – and who understands your individual needs.
Alison Macdonald
Ask Ally, is your direct line to gold investment wisdom. Alison “Ally” Macdonald, with her extensive experience and sharp tongue, cuts through clutter to offer honest, insider takes on your gold investment questions.
Need insights or industry secrets? Ally’s ready to deliver, combining professional expertise with a smattering of Glasgow patter. Get ready for straightforward, expert guidance from a one-time gold shill turned good guy. Ask Ally Today
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