To buy physical gold bars, choose a standard weight from a refiner on the LBMA Good Delivery List, order from a dealer who publishes both buy and sell prices, and arrange insured storage before the bars ship. The mechanics are simple once you know the standards. The costs that catch buyers off guard are the premium above spot when you buy, and the 28% federal tax rate on collectibles when you sell.
What to Buy: Purity, Size, and Hallmarks
Start with fineness. The London Bullion Market Association sets the wholesale benchmark and requires a minimum of .995 (99.5% pure) for its Good Delivery bars.1LBMA. Good Delivery Rules – Technical Specifications Most retail bars are refined further to .9999, sometimes called “four nines,” which is what’s marketed as 24-karat gold.2The Royal Mint. Precious Metals Academy – Module 6
Size is a budget-versus-liquidity call. Gram-weight bars (1 g, 5 g, 10 g) have the lowest entry price but the highest premiums per ounce of gold. One-ounce and ten-ounce bars are the practical sweet spot for individual buyers: premiums are reasonable and resale is easy. Kilogram bars (32.15 troy ounces) pack more metal per unit but can be slower to sell because fewer retail buyers carry that much cash.
Every legitimate bar is stamped with the refiner’s logo, exact weight, and purity. Refiners like PAMP Suisse, Valcambi, and the Royal Canadian Mint also issue a unique serial number matched to an assay card that certifies the bar was independently tested. Keep that card. It’s your paper trail at resale.
Bars from refiners on the LBMA Good Delivery List carry the most worldwide liquidity because those refiners are audited and held to production standards.3LBMA. About Good Delivery Between two bars at similar prices, the one from a listed refiner is almost always easier to sell later.
Finding a Dealer You Can Trust
The dealer is the single biggest factor in whether you end up with authentic metal at a fair price. Two credentials help you filter. The Professional Numismatists Guild requires members to follow a code of ethics, with suspension or expulsion for violations.4Professional Numismatists Guild. PNG Code of Ethics A Better Business Bureau listing adds a record of how the company handles disputes.
One tier up is an authorized purchaser of a government mint. The United States Mint does not sell bullion directly to the public; it distributes through a vetted network of authorized purchasers who meet financial and professional requirements and then supply wholesalers and retail dealers.5United States Mint. Becoming an Authorized Purchaser The Mint publishes the full list online.6United States Mint. Authorized Purchasers of United States Mint Bullion Buying from one of these firms, or from a dealer they supply, cuts counterfeit risk substantially.
Then look at the practical signals. A legitimate dealer posts a verifiable physical address and clear return and buy-back policies. Most important, they display the buy-back (bid) price next to the selling (ask) price so you can see the spread before committing. A dealer who shows only selling prices and makes you call for a buy-back quote is working against you.
What You’ll Actually Pay Above Spot
Nobody buys at spot. The spot price is a wholesale benchmark for institutional trades. Retail buyers pay a premium above it covering production, dealer margin, and shipping. Bar size drives most of the difference. Large bars of 100 oz and up typically carry premiums of 1% to 3% over spot. Smaller bars and coins run higher, often 3% to 5% or more for a one-ounce piece. Gram-weight bars can carry steeper premiums still, because fixed production costs are a bigger share of a small bar’s value.
The bid-ask spread is the second cost, and it’s the one you feel when you sell. For large gold bars the spread runs roughly 1% to 2%. Smaller bars and popular coins run 2% to 4%. Obscure private-mint products can carry spreads of 10% or more, which means you’re underwater the moment you buy. Standard sizes from well-known refiners protect your exit.
Sales tax is the third cost, and it varies by state. More than 40 states offer full or partial exemptions on investment-grade bullion, but the rules differ widely. Some exempt all purchases, some only above a dollar threshold, and a few charge full sales tax with no exemption. Check your state before ordering, because a 6% or 7% tax can dwarf the dealer’s premium.
Placing the Order and Taking Delivery
Gold prices move constantly during market hours, so most dealers let you lock a price at the moment you commit and give you a short window to send payment. Miss the window and the price resets.
Payment options are narrower than in ordinary retail. Bank wires are preferred for larger orders because funds clear quickly and can’t be reversed. Certified checks and money orders are also standard. Credit cards are sometimes accepted on smaller orders with a surcharge to cover processing fees. Personal checks usually trigger a multi-day hold before shipment.
Paying with cash triggers federal reporting. A dealer who receives more than $10,000 in cash in a single transaction, or in related transactions, must file IRS Form 8300.7Internal Revenue Service. Understand How to Report Large Cash Transactions For this rule, “cash” includes not just currency but also cashier’s checks, money orders, and traveler’s checks with face values of $10,000 or less when used in certain designated transactions.8Internal Revenue Service. IRS Form 8300 Reference Guide Structuring smaller transactions to stay under the threshold is a separate federal crime.
Once payment clears, reputable dealers ship in discreet, unmarked packaging through insured carriers and cover full replacement value until you accept delivery. Carriers require an adult signature. Before you sign, inspect the outer box for torn tape or resealing. If the packaging looks compromised, refuse the shipment and contact the dealer to open a claim.
Storing It Safely
Where you keep gold is a trade-off between personal control and professional security.
Home Storage
Home storage gives immediate access and no ongoing fees. The catch is insurance. Standard homeowners policies have sublimits for precious metals that are often just a few hundred dollars, nowhere near the value of a single ounce of gold at current prices. You’ll need a scheduled personal property endorsement or a standalone bullion rider to cover full replacement value, and you’ll need a written appraisal updated as prices move. For the safe itself, ratings of TL-15 or TL-30 describe resistance to tool attack for 15 or 30 minutes, and bolting the safe to the floor or wall in a concealed spot matters more than the rating alone.
Depository Storage
Depositories offer vault-grade security, insurance built into the storage fee, and third-party audits. The important choice is between allocated and unallocated storage. Allocated storage means specific bars are held in your name and segregated from other clients’ metal; you own those exact bars. Unallocated storage means the depository owes you a quantity of gold but doesn’t set aside specific bars, which is cheaper but leaves you as an unsecured creditor if the depository fails. For most individual investors, allocated is worth the extra cost.
Allocated storage fees typically run 0.3% to 0.5% of the metal’s value annually, often with a quarterly minimum. Confirm the insurance policy covers your specific assets at full market value, and verify that audits are conducted by an independent third party.
A Boundary: Gold Held Inside an IRA
If your gold is held in a self-directed Precious Metals IRA, home storage is not an option. The IRS requires the bullion to be in the physical possession of a qualified trustee, meaning a bank or IRS-approved nonbank custodian.9Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts The metal must also meet the minimum fineness required for delivery on a CFTC-regulated futures contract, which is .995 for gold.10Texas Bullion Depository. IRA Storage Services Taking personal possession of IRA gold is treated as a taxable distribution and can trigger early withdrawal penalties if you’re under 59½.
Taxes When You Sell
This is where gold ownership gets expensive in ways buyers rarely anticipate. The IRS classifies physical gold as a collectible, and long-term capital gains on collectibles are taxed at a maximum federal rate of 28%, roughly double the 15% rate that applies to most stocks and bonds.11Office of the Law Revision Counsel. 26 USC 1 – Tax Imposed If your ordinary income tax rate is below 28%, you pay that lower rate instead. Gold held less than a year is taxed as ordinary income at your full marginal rate.
You calculate and report the gain on Schedule D. Your gain is the difference between what you receive at sale and your cost basis, which includes the purchase price plus any premiums and fees you paid.
Dealers have their own reporting duties. When you sell bars in quantities that meet or exceed the minimum needed to satisfy a CFTC-approved futures contract, the dealer must file Form 1099-B with the IRS.12Internal Revenue Service. Correction to the 2025 and 2026 Instructions for Form 1099-B – Sales of Precious Metals Sales below that threshold, or of bar types not tied to CFTC-approved contracts, don’t trigger dealer reporting, but you still owe tax on the gain. Dealers must aggregate multiple sales from the same customer within a 24-hour period when applying the threshold.
Selling Later
Liquidating is easier when you buy the right product to begin with. Bars from LBMA-accredited refiners in standard weights (1 oz, 10 oz, 1 kg) with intact assay cards sell fastest and command the tightest spreads.13LBMA. a href=”https://www.lbma.org.uk/good-delivery/about-good-delivery” target=”_blank” rel=”noopener”>About Good Delivery Obscure brands, odd weights, or damaged packaging take longer to move and fetch lower prices because buyers discount for uncertainty.
Most owners sell back to a dealer. Reputable dealers post live buy-back prices, and you should compare several before committing. The gap between what you paid and what you get back typically runs 1% to 4% depending on bar size and market conditions, and it widens during volatile markets or outside normal trading hours.
Private sales to other individuals can yield better prices because you skip the dealer’s margin, but they carry more risk. The buyer may demand independent verification, and you lose the protection of a documented dealer transaction.
However you sell, keep your original purchase receipts, assay cards, and storage records. Without proof of cost basis, the IRS may treat your basis as zero, taxing your entire sale proceeds as gain.