Who sells gold bullion?

Advice for someone beginning to start investing in gold bullion?

• Could I trade money in for a 24k gold coin at a bank or do I have to buy from a vendor? how does it work when I sell gold to the vendor?do I get LESS than the spot price when I sell to the vendor? What are some ways to avoid getting ripped off by a gold vendor? What are some beginning negotiation strategies I should look into? how do I know when to sell before a sudden drop? Which types of premiums do you suggest? BUT most importantly, will investing in gold be profitable throughout 2012? I already pretty much know that if the Euro countries keep declining, globally more investors dump their money into gold driving the value of gold up, but gold recently went down a couple of hundred dollars an oz. this past month since the U.S. dollar picked up a little bit. But then again, when Standard and Poor slashed the U.S.' credit rating, the price of gold went up. Anybody who's experienced in trading gold, gold coins & other bullion in particular, if you can give me any advice I would really appreciate it. I think I'm going to start small like invest 1/4 of an oz. and see if I can begin making a profit off that to start small and I learn hands on in the beginning before I start investing in half oz. and full oz. of 24k gold.

• Answer:

  First, buy only gold bullion coins -- Maple Leafs, Kuggerands, Buffalos, Eagles, etc. Don't let anyone try to convince you to buy collectible or rare coins. They are trying to rip you off. Collectible coins are for collectors, not investors. It might depend on the country, but in the U.S., banks don't usually sell gold. I think they do in India, though. You can buy gold from local dealers or on the internet. Before you buy, make sure you know what the current "spot" price is. Go to the dealers to find out how much extra they charge. They will generally charge between 5% and 8% over the spot price for 1 oz coins. Unless you are buying a lot of gold, there probably won't be any negotiation, which is why you should shop around. The mark-up will be higher for smaller coins such as 1/4 oz. In California, you also have to pay sales tax on smaller amounts of gold. I recommend that you don't buy small coins. If you have to pay a 10% markup plus 8% sales tax, then the price of gold has to rise 18% just to break even! Nobody can predict what will happen to the price of gold with any certainty. I believe that the price sill continue to rise until Europe and the U.S. get their finances under control. Other people disagree.