When you choose to invest in gold, multiple options are available in which you can invest. In current days, it is very important to invest and buy precious metals in Canada like gold, silver, and platinum especially gold as gold has been a tangible asset for centuries now and has a high market value.
How Is Gold Measured?
Gold can be measured in terms of purity and weight, both of which are vital.
1. Purity:
In most cases, the investment is done in gold alloys and not pure gold. This is because 100% pure gold is extremely soft and malleable so to make it durable and long-lasting, impurities are mixed which makes it an alloy.
The purity of gold is measured in Carat or finesse which is also often quoted as a percentage.
Carat measurement is the purity of gold measured in respect of other metals and it is done in 24 parts. For example, 24 carat is the purest form of gold which is 99.9% pure and 9 carats measures 9 parts of the fold to 15 parts of other metal.
Finesse on the other hand measures the purity of gold to other metals in parts per thousand. For example, 999.999 finesse is the measurement of pure gold and 9 carat is equivalent to 375 finesse. This means 375 parts of gold to 625 parts of other metals.
2. Weight:
Gold is often measured in grams but “troy ounce” is used for gold bullion coins.
A troy ounce is equivalent to 31.10 grams which is 2.75 grams more than a standard ounce.
The standard weight of a gold bar is 400 troy ounces but they are available in smaller units for the investors to have affordable options like 1 kilo, 10 oz, 100gm, 50gm, and many more.
On the other hand, gold coins are mostly pure gold content and weigh 2.82 grams more than “troy ounce”
What Are Investment Options For Gold?
You can buy gold in the form of bars, coins, and rounds and each of them have its own sets of advantages and disadvantages. There are also variations in terms of sizes, weights, and purity.
- Coins: They are the most popular options among investors and collectors. The reason for this is the high liquidity of the coins, that is, it is very easy to convert them into currency without putting much effort. It is not difficult to find buyers of gold coins in the market.
Things that we should know while buying a coin include:
- Bullion coins are 99.9% pure or higher with little to no impurity (24-carat). To buy gold in Toronto, for 24 karat coins, is a tax-free investment.
- 22-carat gold coins are only 91.67% pure so there are taxes that are charged on them in Toronto and Canada.
The most favorite choice of the gold coin is the Canadian maple Leaf which is one of the purest forms of gold in the market (99.9%). They are produced by the Royal Canadian Mint and they engrave a second maple leaf on the coins as a sign of authentication.
When you visit gold dealers in Toronto, they are commonly available.
- Bars: Gold mints and reputed dealers charge a small portion of the cost as a premium to cover the charges of manufacturing, shipping, and storing. The gold bar is the best choice to reduce premiums.
How Much Gold Should You Buy?
This entirely depends on the goal you have. For example, you might want to diversify your portfolio or collect interesting coins or invest in it to avoid an inflation hedge.
If you wish to diversify your portfolio then 5-10% of your portfolio should be gold.
Conclusion!
We have tried to cover whatever information that you might need to know before buying gold. We hope that this article has given you an idea about how to invest in gold in Canada.
