How to Buy Raw Gold

You can buy gold in its raw state, but some expertise is required.

You can buy gold in its raw state, but some expertise is required.

The allure of gold caused a rush of prospectors to invade Northern California in 1849, scouring the mountain streams and caves for the raw precious metal. Today, dealers and mints sell refined gold bullion in uniform sizes. But if you’re hankering for gold as it comes from the earth, there are ways to buy raw gold nuggets and flakes. Some investors prefer raw gold because of its natural beauty, ease of storage and portability. Collectors are often willing to pay more for unique gold nuggets.

Raw Gold

Refiners prepare gold in bars of high purity, often at 99.9 percent fineness. However, raw gold is alloyed to other metals and therefore is not as pure. The Prospecting and Mining Journal reports that raw Alaskan gold is typically 87 percent pure, with 12 percent silver and 1 percent other metals. Most raw gold is available as dust, flakes and small pieces. Larger nuggets are rarer and command premium prices. Miners charge the full spot price for pure gold when selling nuggets, even though the gold content is diluted. You can expect dealers to clean raw gold of soil and sediment before sale.

Grabbing the Gold

You can buy raw gold from miners and gold dealers at trade shows such as the Elko Mining Expo in Nevada or the annual conference of the Northwest Mining Association. You can also join a local prospecting club and bid on raw gold owned by other members. Dealers also sell raw gold on Internet marketplaces such as eBay. Clean raw gold sells by the troy ounce, which is 31.1035 grams. A trustworthy dealer will be able to estimate the relative purity of the raw gold he sells. If you buy more than a few ounces at a time, you might be able to negotiate a more favorable price per ounce. However, larger nuggets are in higher demand and fetch loftier prices.

Collecting Practices

If you buy gold dust -- tiny gold flakes -- you normally have it assayed to determine its purity before settling on a price. You can find assay labs on the Internet, through gold dealers or through your state's bureau of land management. You can expect to pay $100 and up for an assay. Gold panning yields dust of varying purity. Assaying gold dust is essential because of possible fraud -- you don’t want to be buying “fool’s gold,” which is the mineral pyrite composed of iron sulfide. You’ll need to figure the costs of safe storage and insurance when you buy and collect raw gold. You can use a home safe or a bank safe deposit box to secure your gold. Burying it in the backyard might be too safe -- your family might not be able to find if anything should happen to you.

Buyer Beware

Fraud is an ongoing concern to raw gold buyers. Ignore unsolicited letters and emails offering you gold dust at bargain prices. If you buy raw gold from a dealer, insist upon taking the gold with you rather than letting the dealer store it for you. Expect to pay more for gold that has been assayed and carries a certificate saying so. Without an assay, all you have is your receipt as documentation for the gold's value, which might be risky if you buy from a dishonest or unprofessional source. It’s a good idea to photograph and keep records of your raw gold purchases in case you need to report a theft. Any capital gains from the sale of raw gold are taxable and you must report them on your tax return.

 

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