How To Buy Gold Bullion on eBay

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How To Buy Gold Bullion on eBay

Bullion is the name for the precious metals that are bought and sold as long-term investments instead of other similar commodities that may be affected by fluctuations in the economy.

Bullions that are made from gold can be of extremely high value and their worth does not depreciate unless they are damaged in any way.

Gold bullion can on occasion be used in replacement of legal tender but this only tends to happen in the case of transactions between private investors and banks. These types of traders use it in this manner as insurance against the constant changes that do occur in the economy.

To qualify as gold bullion, the bar must be of a fineness of 99.5% at least.

The aim of this guide is to help with the process of buying gold bullion from eBay. Whilst it is sold elsewhere, amongst private traders, at over the counter shops and on specialist online retailers, eBay has a large amount of gold bullion available for prices that are representative of the typical gold bullion market.

Types of Gold Bullion

The two main types of gold bullion are coins and bars, or ingots. The type of gold bullion plays a part in deciding its value because coins and bars come in a variety of different sizes and weights.

Coins

There are around 28 different types of gold bullion coins from a range of 16 countries listed as available by the European Commission. However, there are certain types of gold bullion coin that are more popularly purchased on eBay:

* Sovereign: Sovereign coins are made in the United Kingdom. Whilst technically they are recognised as having the value of one pound in terms of British sterling, they are only really treated as gold bullion coins. Coins of this nature contain the equivalent of 113 grains. The majority of gold bullion Sovereign coins were minted from the years 1817 to 1917, in 1925 and from 1957. In terms of their dimensions, Sovereign gold coins weigh exactly 7.98805 grams, are 22.05mm in diameter and have a thickness of 1.52mm. Any product descriptions that suggest otherwise may have to be treated as counterfeit or fraudulent. Gold bullion Sovereign coins tend to feature a portrait of a British monarch on one side and either a shield and crown design or a depiction of Saint George killing a dragon on the other. There are other designs that were minted under the reigns of Elizabeth II, William IV, Victoria and George IV but be wary that these are not counterfeit if purchasing them.

* Krugerrand: Another widely purchased gold bullion coin is the Krugerrand. This is a South African gold bullion coin and at one stage took up 90% of the gold bullion coin market. It was introduced in 1967 for the purposes of private trading. It was, however, legalised and able to be used as tender in South Africa but this rarely happened. It is bigger in size than the British Sovereign gold bullion coin. It is 32.77mm in diameter and its thickness is exactly 2.84mm. It also weighs more than the Sovereign coin as it is 33.930 grams. Krugerrand coins can be identified by their minted design. One side features a Springbok; the national animal of South Africa and the reverse shows a portrait of the former South African President, Paul Kruger. This is where the name 'Krugerrand' comes from. The text inscription on the coins says 'South Africa' in both English and the native language, Afrikaans.

* The Buffalo: This coin is from the United States and was first introduced in 2006. It is 32.77m in diameter, the same as the Krugerrand, and is 2.95mm in thickness. The coin's design features a buffalo on one side and a portrait of a Native American head on the other.

* The Gold Panda: The Gold Panda bullion coin is Chinese in origin. It was produced on varying scale of values from 5 Yuan to 500 Yuan. One side of the coin features a number of differing portraits of pandas, depending on the year and the other is an inscription of the 'Temple of Heaven'.

Bars/Ingots

* Gold bullion bars come in a variety of sizes and weights. Despite popular misconception, a gold bullion bar can come in any shape or form. Smaller 'bars' of gold are made by the cutting, otherwise known as stamping or minting, of gold from pre-made sheets.

* Ingots on the other hand are more similar to the traditional gold 'bar' standard that people refer to. Again, coming in a number of different sizes and weights, ingots are manufactured by the pouring of moulten gold into a specially design mould.

* The most popular weight of gold bullion bar available for purchase on eBay are those that weigh 1 ounce or 10 grams if buying British minted bars. The prices that can be paid for these gold bullion bars are very reasonable despite the fact that they are 24 carat gold and of 0.999 fineness. There are also gold bullion bars available of smaller dimensions, including limited edition bars that feature special inscriptions and designs, depending on their country of origin.

* Gold bars and ingots from Switzerland feature prominently on eBay. Other countries represented by the gold bullion bar production include Canada, Great Britain, United States, South Africa and China.

Gold Bullion Condition

* The price and value of gold bullion is determined by a number of different elements, with its condition and quality being one of the major deciding factors.

* The condition of gold bullion commonly graded by an official scale known as the Sheldon Scale. It is mainly used in the grading of gold bullion coins but the same condition grading can apply to gold bullion bars and ingots, also.

* With gold bullion coins being at the highest end of the condition grading scale due to their lack of use, there are only three condition grades that should be used. The following grading is used when determining the condition of gold bullion coins (from worst condition to best):

Gold Bullion Condition Grade

Definition

Brilliant Uncirculated

Commonly abbreviated to 'BU', gold bullion of this condition are highly rated but hold some small blemishes.

Choice Uncirculated

Otherwise known as MS-69, whilst these coins may be of excellent condition, they may also show minor signs of light wear upon close inspection.

Perfect Uncirculated

Perfect uncirculated gold bullion is of the highest standard and in prime and perfect condition. There are no signs of wear or impairment on the mint. Perfectly uncirculated gold bullion is given the abbreviation MS-70, with 70 being the highest point on the Sheldon Scale.

* The MS used in the abbreviation of stands for Mint State, which is measured up to the 70 points on the Sheldon Scale.

* If any gold bullion is rated below any of these condition grades then they should be avoided if looking to purchase gold bullion as a means of investment.

Buying Gold Bullion Online

* There are plenty of ways to make the buying gold bullion an easy process.

* For instance, there are hundreds of gold bullion sellers online whose prices and buying options you can take advantage of. Use these gold bullion retailers and their websites to comprehend the issue of value versus the type of gold bullion being purchased. Many of these sites offer Frequently Asked Question sections that can be used to find out the best answers to questions that may arise concerning condition or which gold bullion is of best investment value.

* What is more, there are blog posts and forum discussion threads online that provide useful information on how to avoid counterfeit coins or bars and ensure that gold bullion is purchased that is certified. Browse these to gain as much information as possible on how to spot fraudulent sellers, which is something that occurs regularly due to the ease at which gold can be imitated.

Buying Gold Bullion on eBay

Whilst counterfeit and fraudulent sellers do exist online, there are many ways of using eBay to avoid sellers such as this. Use the points on the checklist to make sure that the gold bullion being purchased on eBay is original and not fraudulent:

* Can the seller provide adequate information to confirm the authenticity of the gold bullion? All sellers should be able to provide their buyers with this information and it largely comes in the form of a certificate of authenticity.

* Is the image of the product provided by the seller clear and detailed? A lot of sellers use professionally taken photographs of their products so as not to dupe the buyer in terms of the gold bullion's condition.

* Has the seller sold gold bullion before? There are many sign-posted 'Specialist Sellers' who can be trusted on eBay.

* Is the product description clear and thorough in its portrayal of the gold bullion? If not, it may be best to steer clear as a lack of knowledge on the product may indicate a fraudulent sale.

* Does the previous transaction history of the seller indicate that they are noble in their intention to sell gold bullion? Check the star rating of the seller and the comments section so as to gauge the thoughts of others that have bought from the seller before.

* Does the seller provide sufficient postage and packaging options? Sellers who ship with the best interests of the buyer should be used, whereas those who don't provide postage insurance may be best avoided.

* Can the seller be contact directly? Do not be afraid to Ask the Seller a question if unsure about any aspect of the product or transaction.

Whilst the Buy It Now or Best Offer option may be available, it is never a bad idea to place a Bid on gold bullion. The outcome can only be good if it is purchased for under the Buy It Now price.

eBay also provides a Buyer Protection Program for the very purpose of stopping the selling of counterfeit products.

Conclusion

* The buying of gold bullion online can be difficult for first time buyers looking to start a collection. With so many factors to consider, such as size, weight and condition, it can be a confusing and often frustrating process.

* The best way to ensure an easy, honest and secure buying of gold bullion is to be knowledgeable on the product. The chance of ensuring an honest purchase of gold bullion can only be magnified by knowing everything there is to know about it before settling for a purchase. After all, gold bullion can be a great means of investment so being well read on such an opportunity is great way of ensuring that the investment is a solid one.

* Furthermore, the price of gold changes everyday so another way of ensuring a good deal is struck, keep up to date with the value differentials that may occur.

* Before purchasing it is also best to be well informed of eBay's User Agreement.

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