Be on Top of The Current Gold Bullion Price

This strategy allows investors to spread the risk of investment out over time. Investing in gold is insurance, or protection, against global uncertainty, currency debasement and inflation.

If you intend to purchase gold coins or gold bullions, make sure that you avoid the big premiums. Investing in gold successfully requires that you purchase it as close to its spot price, with a maximum premium being 10 percent. If you purchase a higher premium, the price of gold will have to be higher up in range if you intend to make a profit.

Figuring out how much the premium is for a gold product, figure out the spot price and subject it from the amount that the owner is quoting you. Divide your difference by the spot price and then multiply the quotient by 100. For example, if you purchased a gold bar that weighed an ounce for $1,225.90, and the spot price was $1,200, the bar would have a markup of 2.1 percent. In other words, the gold bullion price would only need to increase another 2.1 percent from the current levels of spot price in order for you to break even on the purchase. However, premiums are known to skyrocket as high as 75 percent — or even considerably higher — depending on the item the premium is for.

If you want to avoid getting ripped off, it is important to keep in mind why you want to invest in gold bullion. Keep close to the spot price if you are interested in a long term investment. To own it for the use of money, it is better to skip the bullion and work with smaller coins — such as a tenth of an ounce — but you will have to pay the premium in that case. If you are going to work with coins, it is also important to keep in mind that rare coin collecting should be left with the rare coin collectors; this is not as certain as investing in gold, and uncertainty must be avoided.