Gold prices rose to $1,104.10 per ounce Monday, hitting a three-week high. But they're still down 42% from highs reached in September 2011.
Some are calling for gold to fall even further, to $800 or lower.
Current prices offer one of the best chances to buy gold we've seen in a decade.
And with governments around the world printing money to support their flailing economies and stock market volatility surging, there's no shortage of reasons to own gold.
But not all gold is created equal - and the same applies to gold investments.
Here are the most crucial aspects of investing in the yellow metal and what to consider when buying gold...
The Difference Between Physical and Paper Gold
The first thing to realize is there's a big difference between "paper" gold and physical gold.
Owning physical gold in the form of non-collectible coins and/or bars is insurance.
Paper gold, on the other hand, includes everything from gold futures to exchange-traded funds (ETFs). These aren't substitutes for physical gold and should not be treated as such.
Many consider even physically backed gold ETFs to be paper gold because the investor still relies on a manager and custodian.
ETFs are gold derivatives because the owner holds a piece of paper (certificate or brokerage account statement) that represents his or her claim on the gold. Another reason these are considered derivatives is because the unit prices are tied to gold but may trade at a discount or premium to the underlying value.
And sometimes the rules regarding paper gold can change... suddenly.
In the spring of 2013, one of Holland's largest banks, ABN Amro, announced it would stop the physical delivery of its clients' gold holdings. Just a few months later, another Dutch bank, Rabobank, informed its customers it would be closing their gold accounts within two months.
So these account holders were suddenly told they'd have to accept cash in place of gold. Sorry, new policy. No gold... just cash.
That's why it's crucial that investors securely hold at least some of their gold in physical form. It's the only way to own it free of any counterparty risk.
Here's one way to buy physical gold that almost anyone can afford...
How to Buy Gold Coins
When buying physical gold, consider gold coins, but not the collectible numismatics or "rare coins."
Instead, look for some of the most common, widely owned, and highly regarded gold coins whose cost is closely tied to their gold content.
Here are four of the best-known gold coins kicking around, especially here in North America.
| Coin | Gross Weight | Face Value | Fineness |
| 1 oz. Gold American Eagle | 33.930 g | $50 | 0.9167 (22 karat) |
| 1 oz. Gold American Buffalo | 31.103 g | $50 | 0.9999 (24 karat) |
| 1 oz. Gold Canadian Maple Leaf | 31.103 g | $50 | 0.9999 (24 karat) |
| 1 oz. Gold South African Krugerrand | 33.930 g | None | 0.9167 (22 karat) |
The first thing to note is they all contain a full troy ounce of gold. The American Eagle and the Krugerrand actually weigh more because the gold is alloyed with other metals, like copper. This makes the coin harder and so less at risk of wear and tear from handling.
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The American Eagle and Buffalo often sell for premiums a bit higher than their Canadian and South African counterparts. That's because they're more recognized and widely held in North America. Meanwhile, the Maple Leaf and Krugerrand are still some of the most popular coins on a worldwide basis.
Of these four coins, only the Krugerrand doesn't carry a face value. The U.S. and Canadian coins, with a $50 stated value, are considered legal tender in their country of origin and are guaranteed for both content and purity by the governments that issue them.
Gold coins aren't the cheapest way to get the most gold for your dollar. But I do recommend owning some because their relatively small size makes them easier to carry and perhaps even use to trade, barter, or gift.
To get the most for your money, buy gold bars. Here's what to look for...
How to Buy Gold Bars
The larger the bar, the lower the premium over the spot price of the contained gold.
Large bars are heavy and bulky to store and transport. But gold bars (also called ingots) are available in different sizes, including tenth-ounce, quarter-ounce, half-ounce, 1 ounce, 5 ounce, 10 ounce, 100 gram, 1 kilogram, 100 ounce, and even 400 ounce versions.
Also make sure the bars you want to buy are considered "good delivery."
The London Bullion Market Association (LBMA) and the New York Mercantile Exchange (NYMEX) are regarded as industry standards, and they publish lists of reputable refiners. If the bar's refiner is on that list, then it is considered "good delivery."
Some of the best-known gold refiners include Argor-Heraeus, Pamp, Royal Canadian Mint, Umicore, Valcambi, and Western Australian Mint (Perth Mint).
A gold bar that displays the stamp and fineness of one of these refiners is more easily recognized by gold dealers. That allows for a simpler transaction and higher yield to the seller.
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