THE FIVE-STEP APPROACH TO PURCHASING PHYSICAL BULLION

The Wise Investor understands that the direct ownership of unencumbered physical bullion is the best and only way to invest in metals. Once he has made up his mind to buy precious metals, he faces the challenge of choosing the specific bars that he should buy.

Some bullion dealers carry tens of products across the four precious metals and it can be daunting to examine them all. This section outlines a five-step approach that the Wise Investor can follow to acquire physical bullion.

Step

CHOOSE YOUR METAL

The four precious metals are gold, silver, platinum, and palladium. Most people are very familiar with gold, which has stood as the monetary metal of choice for millennia. Most people overlook gold’s close cousin, silver – which has a long history of being used as a monetary metal on top of being a ubiquitous industrial metal (used in the electronics, energy, and medical industries).

Without going into great detail, silver generally follows gold’s price movements in a much more volatile way. It has been described as gold on steroids and produces magnified gains when the metals appreciate (and magnified losses when the metals go down). An investor with a solid risk appetite and who thinks that gold will appreciate should therefore have an allocation to silver.

Silver is roughly 65 times cheaper (a good Gold to Silver ratio) than gold, which makes it far more affordable than gold but also greatly increases its transaction costs (since transaction related costs are spread on an item of much lower value). Silver’s lower value would make it appropriate for transacting everyday items in a scenario of economic chaos. An ounce of gold is far too powerful for such purpose.

Platinum and palladium make up the platinum group metals (PGMs) that are rare precious metals with unique physical properties. The largest use for both metals is in the production of catalytic converters used in the automotive industry to reduce harmful emissions. The second largest use for both metals is the jewelry industry. In addition to catalytic converters and jewelry, both metals are used in diverse industrial applications in the electronics, medical and petroleum industries.

The use of platinum and palladium for coinage and monetary purposes is generally limited. The demand for both metals is therefore much linked to the continued expansion of the automotive industry and the regulatory push for more stringent vehicle emission standards. The investment case for PGMs lies more with the limited global supply of both metals: more than 80% of world palladium production is concentrated in just two countries – Russia and South Africa. Russia alone accounts for nearly half of total palladium supply. Continued growth of the automotive industry coupled with supply disruptions could therefore constitute a strong investment case for both metals.

Step

KNOW THE SPOT PRICE OF YOUR METAL

The price of metals quoted by dealers always involves two components: the international spot price and the purchase premium. Because the spot price makes up the bulk of the purchase price and is easily found, the Wise Investor should always be aware of the spot price prior to making a purchase. He should also be able easily to convert the spot price per ounce into the weight of the bar contemplated.

The spot price refers to the price that is determined on key markets where metal is traded. The spot price is quoted around the clock and refers to the price determined in the London Bullion Market during European trading hours and on the futures markets, thereafter, in New York, Sydney, and Hong Kong. This price fluctuates every moment and determines the bulk of the purchase price of the metal.

USD/OZ

The chart above shows the historic spot price for gold over the last 5 years. Intraday price swings of one percent are common in the gold market. This reinforces the need for the Wise Investor to know the latest spot price when making a purchase.

Use our handy calculator below to determine how many ounces of gold you can buy at today’s price for your budget.

HOW MUCH GOLD CAN I BUY?

Enter available investment value:

You can purchase approximately X^*ounces of gold, based on today’s spot price of $US X per ounce.

*Gold quantities are indicative and don’t include potential premiums and discounts on current spot price.

Step

Know the characteristics of your metal

ITS FORM

Physical metal comes in the form of bullion (bars purposely made for investment purposes) or coins which are minted by national mints and refiners worldwide. A distinction can be made between bullion coins and numismatic coins, which are collectible items commanding a higher price and which should only be considered by connoisseurs.

ITS WEIGHT

Bullion comes in bars of different weights, with the standard unit being the troy ounce (31.1 grams) for precious metals. Bullion bars are available in weight denominations ranging from 1 gram to 400 ounces (12.4 kilos) for gold and 1,000 ounces (31 kilos) for silver. The investor has a wide range of weights and sizes from which to choose, which can be confusing at first.

Most people are not accustomed to dealing with troy ounces as a unit of weight. A troy ounce is approximately 31.1 grams, which renders conversion into grams and kilos rather difficult. As a simple rule, there are 32.151 gross ounces in a kilo. Keeping that number in mind allows us easily to calculate the number of ounces contained in bars which are denominated in grams.

The spot value of a gold bar weighing 100 grams with a purity of 999.9 is US$ 12,917.03 based on today’s spot price.

ITS FINENESS

All bullion bars and coins have a specific fineness, which is the ratio of the precious metal it contains to any impurities. It is traditionally expressed as parts per 1,000 (or on a scale of 24 karats for jewelry). Most bullion products have a fineness of at least 999.5 (which equates to 99.95% pure metal) for gold and 999 (99.9%) for silver.

ITS BRAND

It is essential to purchase metal that is manufactured by a refiner that is on the good delivery list.

Mined gold is brought in rough and impure form to refiners that mold it into standard bars recognized by the international market. The brand of a bar is the refiner and it is always marked on the bar. The quality of a bar is therefore dependent on the reputation of its refiner. It would be difficult for individual investors to track the reputation of each refiner they encounter prior to making a purchase.

Fortunately, a trade association called the London Bullion Market Association (LBMA) has defined the standards that gold and silver products must meet to be traded on exchanges. The LBMA has set up an accreditation process for refiners that meet their stringent quality criteria, as well as regular production checks. Such LBMA accredited status is being held by about 70 refiners worldwide for gold and 80 refiners for silver. The list of accredited refiners is called the Good Delivery List and is available on the LBMA website. The London Platinum and Palladium Market association performs a similar role for platinum and palladium.

It is essential to purchase metal that is manufactured by a refiner that is on the Good Delivery List because the quality of the bar (the accuracy of the weight and fineness indicated on the bar) is widely recognized. Bars fabricated by little-known refineries might be hard to resell, and the buyer must also contend with counterfeit risk. There are some very reliable refiners that are not on that Good Delivery List but it generally advisable to hold the most widely recognized form of bullion.

Step

KNOW THE PURCHASE PREMIUM

The spot price applies to metal that may or may not exist in physical form at the moment of trading and that is not readily available for the purchaser in a particular place. An extra layer of cost needs to be added to that spot price for an actual piece of bullion to be produced and shipped to the right location, and that is the purchase premium.

The purchase premium is typically between decimals of a percentage point to a few percentage points of the spot price for gold (it is a lot higher for silver, which has a much lower value per weight). The premium covers all the costs related to the physical aspect of the bullion, such as the manufacturing cost of a bar, its insured transportation to the desired location, its insured storage along the way, and the margin of the bullion dealer selling it. The purchase premium includes the compensation of all the parties involved in making the bar and transporting it securely to the buyer.

The first question that should be asked when considering the purchase of a particular bar is, “What is the premium?” The spot price is transparent and the buyer should be aware of it at the time of purchase. The dealer has no way to impact or cheat on that component of the price. He only has control on the premium and should be transparent about it. It sometimes takes a lot of effort for a customer in a physical or online shop to figure out the magnitude of that premium. A dealer should be transparent about the premium he charges and should clearly indicate it in percentage points for each bullion product. Moreover, he should always quote the price his metal in U.S. dollars, with a local currency equivalent if the settlement currency is not the U.S. dollar.

The premium includes the manufacturing cost of the bar, which is more or less similar irrespective of the size of the bar. The refiner needs to perform a similar amount of work to pour the gold needed to make a 100-gram cast bar, a 400-ounce bar, or a 1-kilo silver cast bar. As a result, the premium in percentage points is the highest for smaller value products. The chart below provides an indication of the premium for the four metals and for the most common sizes of bullion.

Step

DECIDE ON THE FINAL ALLOCATION TO SPECIFIC PRODUCTS

A new investor should begin with the understanding that, while precious metals are commodities and bullion derives its intrinsic value from its fine metal content, the way those metals are selected and held is equally important. A considered investor will focus not simply on price, but on acquiring high-quality, well-recognised products within a structure that supports long-term security and clarity.

This includes choosing formats that align with their overall budget while maintaining a balance between efficient allocation and practical flexibility. It is also important to consider future liquidity, such as the ability to realise part of one’s holdings when needed, as well as the role precious metals may play in more uncertain or stressed environments.

In this approach, the objective is not merely to accumulate metal at the lowest premium, but to build a position that is coherent, resilient, and aligned with one’s broader financial priorities.

At this stage, your focus shifts from understanding precious metals to structuring them in a way that truly serves your objectives.

While gold and silver derive their intrinsic value from their fine metal content, the way your holdings are allocated—across formats, sizes, and jurisdictions—will ultimately determine how effectively they protect and support your wealth over time.

A well-considered allocation reflects more than a simple purchase. It takes into account:

- Your purpose of holding — whether for long-term wealth preservation, liquidity, or contingency
- Your time horizon and potential need to access part of your holdings
- The balance between efficiency and flexibility in bar sizes
- The jurisdiction and storage environment in which your metals are held

At Global Precious Metals, this step is approached as a bespoke process.

Rather than applying a standard allocation model, we work with you to design a structure that aligns with your personal situation, ensuring that your metals are not only securely held, but also practical, accessible, and aligned with your broader wealth strategy.

This is where a direct conversation becomes essential.

Our role is to help you:

- Translate your objectives into a clear and structured allocation
- Select the appropriate formats for both stability and flexibility
- Position your holdings within trusted jurisdictions
- Ensure full ownership, clarity, and long-term operational ease

Step 5 is not about choosing products in isolation. It is about building a precious metals position that is coherent, resilient, and tailored to you.

We invite you to speak with our team to define an allocation that reflects your priorities with precision and purpose.

A wise investor does not simply hold metal, he positions it to endure, protect, and serve future generations.