From BusinessWeek:
If you've never bought physical gold before, watch out for several pitfalls… Make sure you choose a reputable dealer and keep a close eye on gold's spot price. There are lots of shysters out there who will try to rip you off.
Also, realize there are ways to hedge your physical gold position using options - some commodities brokers can do this for you. And alternatives to owning bullion, like ETFs, may be better suited for some investors. The article addresses each in issue in detail.
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