Gold turned in a fairly tarnished performance during the second quarter, falling $80 an ounce, or 4.76%, during the April-June period.
Even still, most precious metals analysts see strong potential for gold prices in the second half of 2012 given the continued sluggishness in the global economy and increasing uncertainty about the euro-zone debt crisis.
Some are suggesting that gold prices could top their previous 2012 high of $1,795.10 an ounce set back in February.
Given that, the big question for investors is how to buy gold in a renewed bull market for the shiny metal.
The answer largely depends on your expectations.
If you expect renewed economic disruptions in Europe and elsewhere, growing tensions in Syria, Iraq, Egypt and the rest of the Middle East, and increasing political discord in the US. before and after the election, you'll likely want to take the traditional approach – holding the physical metal itself.
Purists feel this is the only true hedge against global turmoil and declining values in the dollar and other fiat currencies.
How to Buy Physical Gold
For smaller investors, this typically means buying gold bullion bars, rounds (unadorned coin-shaped pieces) or minted gold bullion coins.
Bullion bars – produced primarily by private mints like Engelhard, Johnson Matthey PLC (LON: JMAT) and Credit Suisse Group AG (NYSE ADR: CS) – come in an assortment of sizes to suit the needs and means of every investor.
The smallest bars weigh just one gram, priced this week at about $52.75, while the largest is 400 ounces and was going this week for around $645,000.
Gold rounds are produced by the same private refiners, as well as some government mints, and are also available in a variety of sizes, typically ranging from one-tenth of an ounce to five ounces. Prices range from as little as $15 per round over the spot price of gold at the time of the order for smaller pieces to $40 over the spot for larger specialty pieces.
Jewelry-type pieces, such as pendants, are also available, but generally carry slightly higher premiums.
Minted bullion coins come in a far greater variety, being produced by most of the private refiners as well as a number of the world's leading government mints.
Examples of the latter include the American Gold Eagle, American Gold Buffalo, the Canadian Gold Maple Leaf, the South African Krugerrand, the Chinese Gold Panda and the Mexican Gold Libertad.
Specialty bullion "commemorative" coins are also available from both private and government mints, honoring everything from African wildlife to the spouses of American presidents.
Sizes range from one-tenth of an ounce to two ounces, with the one-ounce size being most popular and readily available. Bullion coin prices typically track the spot price of gold, plus a premium of 5% to 6% for the one-ounce issues, which covers the cost of refining, minting and marketing. Premiums on smaller coins can run as high as 15%.
Beware, however, that the premiums for all sizes will be considerably higher if you buy in small quantities or want to pay by credit card rather than with a bank draft or funds transfer.
For example, late last week one leading US dealer quoted one-tenth-ounce American Gold Eagles at $180.19 each when purchased in quantities of 100 or more using a bank transfer, a premium of 12% over the spot price of $160.88 at the time. However, the same coin, bought in lots of 49 or less using a credit card, was quoted at $188.90, a premium of 17.4%.
Where to Find Reputable Gold Dealers
The most important rule, whether you're buying gold bars, rounds or minted bullion coins – or any other physical metal, for that matter – is to deal only with reputable dealers with proven experience and clearly stated policies and warranties. This is especially crucial if you're purchasing by phone or online.
Several well-regarded, long-standing dealers in the U.S. include: