11 Questions to Ask Before You Buy Gold

Almost every bad outcome in this market traces back to the same thing: somebody bought on a phone call, from a person who was good at phone calls, without asking what the purchase actually cost. The metal is rarely the problem. The margin stacked on top of it is.

The questions below take about twenty minutes to work through. Ask all of them, ask them before any money moves, and ask for the answers in writing. A reputable dealer will answer every one without hesitating, because the answers are good. The reaction you get is as informative as the content — a representative who deflects, changes the subject, or tells you the price moves too fast to quote in writing has given you the only answer you need.

Not the spot price. The total you will pay: spot, plus the premium on the specific product, plus shipping, insurance, and any account or setup charges if this is going into an IRA. One number, on one document, for the order you are actually placing.

A good answer gives you that figure without being asked twice and puts it in an email. A bad answer quotes spot, talks around the premium, and sends a confirmation only after the card has been charged.

This is the single most useful question on the list, and it is the one least often asked. The gap between what a dealer sells a product for and what the same dealer would pay for it back this afternoon is your true round-trip cost, and it tells you more about a firm than any rating badge.

On standard bullion that spread should be narrow. On anything described as exclusive, proof or semi-numismatic it can run into the tens of percent, which means the metal price has to climb that far before you are level. Ask for both numbers on the same call and do the subtraction yourself.

Most dealers say they will buy your metal back. Fewer will commit to it on paper, and almost none guarantee a price — buybacks are nearly always subject to market conditions, which is reasonable. What you want to know is whether the commitment exists at all, whether it covers the specific products you are being sold, and whether there is a minimum order size or a holding period attached.

If a buyback policy exists only as a sentence on a marketing page, treat it as marketing.

If the metal is going into a retirement account, eligibility is not a matter of opinion. The IRS sets minimum fineness — 0.995 for gold, 0.999 for silver, 0.9995 for platinum and palladium — and the product has to come from a national mint or an accredited refiner. Collectibles are out. The American Gold Eagle is in, by statute, despite being below the gold threshold. The Krugerrand, which looks almost identical in purity terms, is not.

A representative steering you from eligible bullion toward a 'premium' coin inside an IRA conversation is either confused or working an angle. Ask them to state, product by product, which ones qualify.

Premiums are not arbitrary, and a dealer who understands their own pricing can explain them: mint of origin, product scarcity, fabrication cost, lot size and current wholesale demand all feed in. Larger bars carry thinner premiums than small ones; fractional coins carry the widest of all.

Ask whether the premium drops at a higher order size, and by how much. The answer is often yes, and it is rarely volunteered.

For an IRA this is not optional — the metal has to sit with an approved depository, not in your house, and anyone pitching a home storage or checkbook LLC version of a gold IRA is selling a structure the IRS and the tax courts have rejected. Get the depository named. The majors are Delaware Depository, Brink's and International Depository Services.

Then ask two follow-ups: is the holding segregated in your own space or commingled with other customers' metal, and who carries the insurance, for how much, against what. 'Fully insured' is not an answer. The name of the insurer and the limit is.

First-year promotions are common and genuinely valuable — waived setup, covered storage for two or three years, bonus silver on qualifying orders. They are also where the real schedule hides. What matters is what you pay once the promotion lapses.

Get the custodian fee, the storage fee and any account maintenance charge for a normal year. Ask whether storage is flat or scaled as a percentage of value; a scaled fee looks cheaper at the outset and grows in direct proportion to how well your metal performs.

Physical delivery should be fully insured door to door, tracked, discreetly packaged with nothing on the outside identifying the contents, and require a signature. Ask who carries the risk in transit and what happens if a package is lost — the answer should be the dealer, until you sign.

Also ask what the insurance covers once it arrives. Most homeowner policies cap precious metals coverage far below the value of a meaningful holding, which is a conversation to have with your insurer before the box turns up, not after.

At minimum: an invoice itemising product, quantity, unit price and total premium; a trade confirmation; serial numbers where the product carries them; and, for an IRA, statements from the custodian showing the holding in the account.

Keep all of it. Photograph bar serials and assay cards. The paperwork is what establishes your cost basis for tax, and it is what you will need if the metal ever has to be identified or claimed.

Precious metals orders are usually priced against a live market, which is the standard reason given for not accepting returns. Some dealers nonetheless offer a short cancellation window — often around 24 hours — on certain transactions. Others do not.

Either position can be defensible. What matters is that you know which one applies before you commit, in writing, including what happens to any price difference if you do cancel.

A named representative who stays with the account is worth having, particularly if a rollover is involved and several institutions have to coordinate. Ask who it is and what happens when they are unavailable.

Then set the terms of contact. Some firms in this sector call persistently, and the pressure tends to arrive at the point of decision. You are entitled to say that you will make contact when you are ready, and to treat urgency about a price that will not last as a sales technique rather than information. It almost always is.

Three habits make the difference between a purchase you are satisfied with and one you spend a decade regretting.

• Match the product to the purpose — bullion for weight, sovereign coins for liquidity, IRA-eligible metal if the money is retirement money
• Never buy on the first call, however good the reason for hurrying appears to be
• Get the quote, the buyback price and the fee schedule in one email before any money moves
• Keep every invoice, serial number and statement; photograph what you take delivery of
• Revisit the allocation once a year rather than reacting to headlines

None of these questions is hostile, and a good dealer will have heard all of them before. The point is not to catch anyone out — it is that the answers, taken together, tell you the total cost of the decision before you make it, which is the one thing a sales call is structured to postpone.

If a firm will answer ten of the eleven and goes quiet on the buyback spread, you have learned where the margin is.