How would I go about buying gold?
May 28, 2008 10:02 AM Subscribe
How would I go about buying gold?
It has long been a fantasy of mine to buy some gold when I have a bit (lot) of spare cash. However I do not intend to buy it to trade on the commodities markets, rather I would like it delivered to my house. Right now this is a purely theoretical question, but in practice how would you go about doing this? Who would I ask to buy me a bar of gold and how would I go about getting it delivered to my house?
Furthermore could this then be extended to, say, buying a barrel of oil and having it shipped to my front door? How about wheat? Metals?
It has long been a fantasy of mine to buy some gold when I have a bit (lot) of spare cash. However I do not intend to buy it to trade on the commodities markets, rather I would like it delivered to my house. Right now this is a purely theoretical question, but in practice how would you go about doing this? Who would I ask to buy me a bar of gold and how would I go about getting it delivered to my house?
Furthermore could this then be extended to, say, buying a barrel of oil and having it shipped to my front door? How about wheat? Metals?
Oh, I should have checked your profile. You are in the UK. Sorry. It still looks pretty easy.
posted by procrastination at 10:20 AM on May 28, 2008
posted by procrastination at 10:20 AM on May 28, 2008
Well, as procrastination posted, there are no shortage of dealers in the UK who will sell you small quantities of gold. You've asked about "metals" though, so watch out if you'd like to extend your purchases to silver. In the UK silver is classified as a collectable and even if purchasing for investing purposes, the transaction will attract VAT.
Also, you're better off purchasing gold in the form of fabricated coins, unless you're doing this as a pure lark. Gold in physical form, once outside the dealer system attracts a great deal of suspicion when you try to resell. This manifests itself as a wider bid / ask spread, as the dealer will effectively be taking on some risk that the metal hasn't been adulterated.
On my profile I maintain links to services that will quote in multiple currencies. Several of those sites also link to dealers, so you can compare prices & services.
Kitco, for example, will also sell Platinum, Palladium and Rhodium.
As precious metals are not exchange traded, its natural to see different quotes in the market. You'll notice different bid / ask spreads for gold coins, when compared to bullion bars.
Wow but in terms of purchasing other commodities? I've never heard of this being done deliberately before by retail (except by accident, in which case I have heard of it). I don't know how you'd get a single barrel of oil (or bushel of wheat), and you'd have to keep in mind a barrel is 42 gallons of oil. I don't know if it would be legal to store that much oil in your home. Interesting question though.
In terms of derivatives markets, here is the NYMEX Futures contract for WTI Oil (1,000 barrels / contract) and the KCBOT contract for Wheat (5,000 bushels / contract).
If you're interested in other commodities, CME trades hogs, cattle and pork bellies. CBOT trades wheat, corn, soybean, and rice. But taking physical delivery might prove problematic.
Gosh I have to say - this is a great question. Very interesting, especially so the other commodities.
posted by Mutant at 12:41 PM on May 28, 2008
Also, you're better off purchasing gold in the form of fabricated coins, unless you're doing this as a pure lark. Gold in physical form, once outside the dealer system attracts a great deal of suspicion when you try to resell. This manifests itself as a wider bid / ask spread, as the dealer will effectively be taking on some risk that the metal hasn't been adulterated.
On my profile I maintain links to services that will quote in multiple currencies. Several of those sites also link to dealers, so you can compare prices & services.
Kitco, for example, will also sell Platinum, Palladium and Rhodium.
As precious metals are not exchange traded, its natural to see different quotes in the market. You'll notice different bid / ask spreads for gold coins, when compared to bullion bars.
Wow but in terms of purchasing other commodities? I've never heard of this being done deliberately before by retail (except by accident, in which case I have heard of it). I don't know how you'd get a single barrel of oil (or bushel of wheat), and you'd have to keep in mind a barrel is 42 gallons of oil. I don't know if it would be legal to store that much oil in your home. Interesting question though.
In terms of derivatives markets, here is the NYMEX Futures contract for WTI Oil (1,000 barrels / contract) and the KCBOT contract for Wheat (5,000 bushels / contract).
If you're interested in other commodities, CME trades hogs, cattle and pork bellies. CBOT trades wheat, corn, soybean, and rice. But taking physical delivery might prove problematic.
Gosh I have to say - this is a great question. Very interesting, especially so the other commodities.
posted by Mutant at 12:41 PM on May 28, 2008
"buying a barrel of oil and having it shipped to my front door"
If you mean a barrel of crude I think you'd be out of luck. However a barrel of refined oil is simple as people running heavy equipment buy oil (motor, trans, hydraulic) in this quantity. Here business in this business are known as bulk plants and are listed as such in the phone book. Practically every town has at least one dealer.
Be warned though that a barrel of oil weighs 300-600 pounds depending on what you mean by "barrel" and the density of the oil.
posted by Mitheral at 1:09 PM on May 28, 2008
If you mean a barrel of crude I think you'd be out of luck. However a barrel of refined oil is simple as people running heavy equipment buy oil (motor, trans, hydraulic) in this quantity. Here business in this business are known as bulk plants and are listed as such in the phone book. Practically every town has at least one dealer.
Be warned though that a barrel of oil weighs 300-600 pounds depending on what you mean by "barrel" and the density of the oil.
posted by Mitheral at 1:09 PM on May 28, 2008
A bushel of wheat is 60 lbs. You could probably buy this from a local grain elevator.
posted by mattbucher at 1:21 PM on May 28, 2008
posted by mattbucher at 1:21 PM on May 28, 2008
Probably the most difficult to accomplish would be the purchase of a single "pork belly" from the Chicago Mercantile Exchange. What exactly would that look like, delivered to your door?
posted by thewalrus at 2:23 PM on May 28, 2008
posted by thewalrus at 2:23 PM on May 28, 2008
A pork belly is just one longitudinal half of the belly of a hog, the part that is sliced for American/Stripey bacon. Any actual butcher could supply them. A CME contract however is for 40K frozen bellies with an average weight of 12-14 lbs. You'd need a good size freezer.
posted by Mitheral at 3:49 PM on May 28, 2008
posted by Mitheral at 3:49 PM on May 28, 2008
This thread is closed to new comments.
posted by procrastination at 10:18 AM on May 28, 2008