If you live in a major, metro area, open the yellow pages, and go to "coin dealers" or "numismatics".  Then call them and see if they carry them (or can have them delivered to their shop for you to pick up).    Other points:

1. Most dealers only accept cash (no checks, credit cards, etc.). So when visiting your dealer, you should allot time to first visit your bank and get the dough necessary to make your purchase.

2. Do NOT buy fractional ounces -- the dealers charge bigger markups for them.

3. Ask the dealer about sales tax.  Some states charge tax, others don't.  In CA, if I recall, your purchases are taxed (sales tax) for amounts less than $1,000.  Over that amount, no sales tax applies.

4.  When calling your dealers, ask them what their price is for (pick your favorite coin). Then compare that to the current gold quote -- that is their markup.  Prices change all the time, but it gives you an idea what % markup they charge.

5.  When it comes time for you to SELL some of your gold, I believe the dealer only reports transactions >$10k per day to the IRS.  So you might want to keep that in mind....

I believe there are also web-based dealers.   Though I cannot speak from any experience about them. 

 Good luck.

Years ago I bought Kruggerands from Blanchard and Company after seeing a nice ad they ran in the wall street journal..They sent them insured and when I sold back to them years later, I sent them the coins via registerd mail retrun receipt requested plus insured them...costs for buyingselling and for insurance were peanuts.....(Registered mail goes into a sealed pouch and stays there until delivered, FYI).  Kruggerands are one ounce coins..you can check gold prices daily int eh wall street journal..the buy/sell spread should be very little different than the stated price..maybe a percent or two.. tddearlereealer on

Blanchard quoted me a price and said they'd hold the coins until they got my certified check a few days later..then they shipped the coins....They gave me a sell price years later when I sold and when they got the coins they me a cashier's check..

Personally, I'd avoid small dealers...probably most are good, but you never know.

 I do not know anythign about buying bullion.

Regards,

Bob 

Hi, Twinlabs.  I second the above posts.  I've heard good things about Blanchard, though never had any dealings with them.  Most of the physical gold (coins) I have I bought long ago - from a couple of good companies, none of which are still in business, to my knowledge (at least not under the same name as way back then).

The only bullion I ever owned was a 5 oz bar I bought from Merril Lynch, back in early 1975.  Yes, the big brokerage firm actually sold small bars to small investors back then - at a considerable markup, of course.  It was not long after the US had legalized gold sales, and I was not only one of their first buyers (at the local Pensacola Florida office at least) but the first ever to actually take delivery of my little gold bar.  I remember the brokers and assistants in the office crowded around to see the event when I came in to pick it up.  I sold it thorugh a coin dealer in the early '80's (logging a decent profit despite getting a good haircut both on the buy and sell sides ;-)

Twin, unless you are talking really huge sums, I'd probably forgo the bullion if I were you.  Consider sticking with coins - Kruggerands, or Maple Leafs, or the current US Gold Eagles - much easier to both buy and sell.  DO take delivery or have them send them to you rather than leaving them with a dealer or any third party for storage - otherwise you might as well just buy the GLD (gold ETF) IMO. 

Just my 2 cents.

MWL

Hi folks

Thanks for the responses. I've talked with a friend who uses Blanchard. They seem pretty expensive. I located a website in California who appears to be cheaper including shipping and insurance. I haven't asked about sales tax. My friend says to stick with the Buffalo coins because they are purer (?) than Eagles or Maples (.999 vs. .990).

What should the spread be between the actual gold price per ounce and what the dealers sell it for? I've seen spreads higher than $20/ounce 

[quote user="twinlabs"]My friend says to stick with the Buffalo coins because they are purer (?) than Eagles or Maples (.999 vs. .990).[/quote]

Actually, it makes no difference. Both 50.00 eagles and 50.00 buffalos contain exactly the same amount of gold, i.e., 1 troy ounce. Eagles add an alloy to strengthen the gold, which is a soft metal. Look for the number of troy ounces (or grams, i.e., 1 troy ounce = 31.1034768 grams) on a coin or bar, and stick with the more commonly traded coins and bars.

I've purchased both from brokers/dealers and from eBay. I prefer eBay because the prices are generally lower and the shipping much faster. There are many reputable dealers on eBay, just check the feedback and go with a seller who does a large volume and who has good feedback.

Let me add that I, as MWL mentioned, also hold part of my gold allocation in ETFs for convenience, i.e., GLD and IAU. I personally think it is better to directly hold gold in a safe or safe deposit box, although it takes a bit more effort.

Dan

Dan's advice is good...With care, e-Bay is a good bet. Remember, you are buying one ounce of gold and that's all you should pay for. Steer clear of "collector coins",  that's a different game altogether. Krugerrands generally have the least markup. Some pawn shops specialize in monetary gold and can be a good source. Others will try to rip you off. Arrange your purchase to avoid paying sales tax. I once purchased some Krugerrands from a local dealer but the actual coins were shipped from an out of state dealer, avoiding taxes.

At the moment, mark-ups are higher than normal because of the turmoil in the markets. The best way to own gold is to do what you are doing. Take possession of the gold yourself. Buying ETF's like GLD is MUCH riskier as you will NEVER have any access to that gold even though you theoretically own it..That's strictly for gold price speculators not people buying doomsday insurance.   

Take possession of the gold yourself. Buying ETF's like GLD is MUCH riskier as you will NEVER have any access to that gold even though you theoretically own it..That's strictly for gold price speculators not people buying doomsday insurance.   

[/quote]

If doomsday comes, gold will be worthless.  You can't eat gold.  The days when gold had value other than for speculation against inflation are over.

[quote user="FairWind"]Buying ETF's like GLD is MUCH riskier as you will NEVER have any access to that gold even though you theoretically own it..That's strictly for gold price speculators not people buying doomsday insurance.[/quote]

Let me add that I would no longer suggest a precious metals ETF, as the price can too easily be manipulated, so I changed my mind. I also agree that with an ETF, you do not have access, and if the markets were to shut down, you would be out of luck. If you're going to hold some precious metals as doomsday insurance, I would hold the physical metal. Understand the price will be very volatile, so do your due diligence.

In the last depression of the 1930s prior to World War II, gold worked quite well, but, unfortunately, was declared illegal to own. If we get a repeat of this, it may or may not work the next time around. There is a huge difference between the 1930s and the 2000s. In the 1930s, we were somewhat self-sufficient, and most folks owned their homes with no mortgages. Today, very few of us are self-sufficient, and almost everyone has a mortgage, i.e., most of us are deeply in debt today compared to the 1930s. Furthermore, today, this slow economy will likely force people to voluntarily sell whatever precious metals they have stored away, so a liquid precious metals market may not even exist is in a worst-case scenario.

So, as Lele said, precious metals may not have value in a worst-case scenario, where dried food, fresh water, and gasoline would be better. So, it is possible that precious metals would be worthless. I would prepare for the worst, but work towards making the best happen.

Lele is wrong..People ALWAYS prefer using MONEY instead of direct bartering. Gold and Silver have been used as Money for over 3000 years and nothing has happened to change that fact. No fiat paper currency has lasted much longer than 200 years...Our own fiat money is only 35 years old and is showing signs of great strain now...Banks and the credit cards they support can disappear in a matter of weeks requiring massive government intervention to  forestall a complete collapse of the entire banking system. To deny this means you are blind...

Speaking of turmoil in the Gold market...

www.goldmoney.com is where to go to buy it.  It's at $723 and change now.  They store it for you, and you can buy in grams or ounces.

It's a good way to invest in tiny amts or big amts.  Check it out it was in Barron's last week.

It is expected to go up to 7k in the next few years, get in on it while it's low.

GG

Well, I read it in there.  They said it's almost $1000. an ounce now, and could easily be double that in a year.

In 1999 it was a little over 200 an ounce.

Who knows?  I'll buy it just for YaYa's.

Then I will make a bong out of it!!

GG

I also read about the projected $1K, $2K, or $3K/ounce gold many times, but, month after month during this financial crisis, this has failed to materialize. Logic, past history, and common sense would dictate that gold should skyrocket during the high volatility, high inflation, and record VIX levels. But, this did not happen.

What is happening with gold makes no sense, unless you consider that the publicly available gold is less than 1% of the world's supply, from the sources I've read. 1% isn't enough to affect the price of gold one way or the other, IMO. So, that might help explain: (1) the illogical low price, and (2) the simultaneous shortages worldwide that are generating a separate pricing structure from the paper gold (IAU, GLD).

The bottom line is that gold is extremely volatile, high risk, and no longer a hedge against inflation and market volatility. It will likely have some positive intrinsic value, but, beyond that, it is all speculation.

Dan

I remember when gold peaked at $850 in '80 or '81. At that time the experts, like the Aden Sisters, were predicting $3,000 gold shortly. I'm still waiting.

""My top conservative investment idea for 2008 is StreetTracks Gold Trust (NYSE: GLD), which is an exchange-traded fund. In fact, the amount of gold held by StreetTracks now exceeds the gold reserves of China. It holds 602.37 tonnes of the yellow metal, whereas China only holds 600 tonnes. (A tonne is a metric measure equal to about 3,520 ounces.)"

That's WAY MORE than 1% of the worlds gold...If Street Tracks Gold Trust has accumulated over 700 tons (as of today) of gold, somebody big is selling it. As investors pumped up this fund, the price should have soared, but it didn't. Somebody filled that demand by selling hundreds of tons of Gold... 

That's WAY MORE than 1% of the worlds gold...If Street Tracks Gold Trust has accumulated over 700 tons (as of today) of gold, somebody big is selling it. As investors pumped up this fund, the price should have soared, but it didn't. Somebody filled that demand by selling hundreds of tons of Gold...[/quote]

Yes, but who owns all of this paper gold backed by real gold? Well...think about the golden rule: "He who has the gold makes the rules." ;-)

We small fry who might own a few ounces here and there do not in any way set the market price.

Even those who do own a bit of gold may end up selling it anyway to cover losses in other investments, to cover living expenses during this recession, or to cover periods of unemployment. So, this may be contributing to the downward trend, as the global deleveraging continues.

Most dealers are either sold out of gold, or are having a hard time locating supply at any price. Some have a waiting list of several weeks. Some mints are no longer striking certain gold coins because the spot price of gold is so much lower than the market price, and thus the mints cannot purchase gold at the spot price. 

Whether or not gold will act as a hedge against inflation and volatility this time around remains to be seen, but, so far, it is not working. 

We seem to be in a golden twilight zone...

If one decides to buy paper gold, would not be better to buy GDX (gold miner) vs GLD (gold ETF). GDX also pays dividend. In the last one year gold price is almost same as year earlier but GDX has lost more than 60%.

I think one year ago one natural rescourse fund manager (if I am not worng I think it was Frank E. Holmes of US global on wsj) was saying in general oil and gold has 10X relation. If oil is $66/barrel then gold perhaps should be around $650 -$700. Is this drop in gold prices due to forced selling like margin calls or hedge fund selling or some gold specific reason like above mention formula or increasing value of greenback or all of the above or no one really knows?

If one decides to buy paper gold, would not be better to buy GDX (gold miner) vs GLD (gold ETF). GDX also pays dividend. In the last one year gold price is almost same as year earlier but GDX has lost more than 60%.

[/quote]

I think this is correct.  GDX actually went up today, and it is one of the few things that did.  The gold miners are very oversold.

Mining stocks are lagging because their expenses are skyrocketing and they are not finding much gold..