Investing in Gold Nuggets

People have different reasons for buying gold nuggets. Over the years I have found that most people choose to buy gold because they feel that it is a good investment and likely to increase in value over the coming years. Others are mineral collectors, looking to add to their collection and less concerned about the value as much as the overall attractiveness of the nugget. The same can be said for jewelers who make beautiful jewelry out of natural gold nuggets, and are then able to resell them from several times the cost of the nugget itself.

I recently had a good friend purchase some gold nuggets for investment purposes. He liked some of the gold nuggets that I had for sale and wanted to buy a few, but really had no particular nuggets that caught his eye. His main intention was to keep them stored in his safe deposit box and hold onto them for many years, purely as an investment. Since he had never bought any gold before, he asked me, ďWhich ones should I buy?Ē

Most buyers have a good idea of what they want to buy, so I generally donít offer my opinion on this subject. And of course my opinions are just that; opinions. Others are certainly entitled to have different thoughts. What I recommended to him were small to medium sized nuggets, each hand selected pieces that were unique and attractive. I picked out a nice assortment of nuggets from around 1 to 5 grams each and had him pick out what he liked. He chose a few that he thought were the neatest and most interesting looking and we made a deal.

My reasoning for selecting those nuggets was simple. For the purpose of investment, I felt that the resale of the nuggets was important for him to consider, even though he had no intention to sell them for many years. My reasoning for the modest sized nuggets was simple; when he wants to resell those nuggets in the future he will find that there are way more people that can afford a nugget worth a few hundred dollars in comparison to one worth several thousand. Even though we all like the big multiple ounce nuggets, finding a buyer for a gold nugget of that size is not as easy as you would think. Now that is not to say that I would discourage him from buying a large nugget if he really wanted one. After all, the reason that people purchase gold nuggets and specimens instead of bullion is because they are unique and interesting. But based strictly on the thought of reselling them down the road, I felt the more modest sized nuggets would be the easiest to find buyers for.

The other option he had was to purchase some fine gold, in the form of dust and small flakes. This gold can generally be purchased for lower cost than nuggets, as it is quite common in comparison. I could have given him a better price for this gold, and since it is small pieces, it would be easy to separate and sell in whatever quantity a buyer wanted down the road.

The reason that I didnít recommend this to him is because that fine gold is just not as collectable as a nice sized gold nugget. The value is very closely tied to the spot price of gold, and although it is certainly a good investment if you are bullish on the price of gold in the coming years, I feel that the added collectability of a gold nugget will add to its value in the future. The fact is that less gold nuggets are being found by miners than ever before. The vast majority of gold mined on earth comes in the form of tiny pieces of dust, some so small that it canít even be seen by the naked eye. Large mining companies that produce thousands of ounces of gold have it refined, and it is very rare for them to hold onto any nuggets that they do find.

The areas that have produced large placer gold nuggets have been exploited hard, and those nice nuggets just arenít as plentiful as they once were, even just a few decades ago. With less nuggets being discovered, the premium price they bring over gold spot price will no doubt increase over the coming years.

Buy Natural Gold Nuggets

At the end of the day, all that really matters is that a buyer is happy with their purchase. I was happy to help my friend add some gold to his collection, and I am confident that his investment will pay off in the years to come. Gold has attracted people for thousands of years, and there is not a doubt in my mind that it will continue to do so. Investing in gold nuggets is great for anyone who feels that the price of gold is going to increase, and that the added collectability of a natural gold nugget will hold added appeal to collectors in the future.