Gold and silver have gotten a lot of attention recently as the gold price reaches five-year highs and silver, although lagging gold, shows signs of new life. But whether it’s coins, metals, stocks, or Beanie Babies, investors should resist the temptation to follow the crowd blindly.

That doesn’t mean that buying and selling opportunities don’t exist, only that whatever decisions you make should be informed ones.

A recent article on the American Numismatic Association (ANA) website pointed out some things buyers and sellers should consider before acting in the gold and silver bullion coin markets. They include:

1. Know the Current Market Prices and Trends

   Unlike collectible coins, bullion coins are traded based on the daily market price of metals, called spot prices. Dealers charge a premium over spot price for selling and a discount from spot for buying. Percentages vary from dealer to dealer and are typically higher for smaller quantities, especially for fractional-ounce purchases.

   Some coins such as American Eagle and Canadian Maple Leaf bullion coins sell at higher premiums due to their added collectability.

2. Know Your Dealer

   Only do business with dealers you trust, both for their reputation and their expertise. Face-to-face transactions with local coin and bullion dealers let you assess personalities and premises, but better deals can often be had from large national dealers online. Just be sure it's someone with a solid record. Check their terms and conditions before buying or selling.

   If you're not taking delivery of your coins in person, get confirmation of the delivery date. With the fluctuations in spot prices, prompt delivery is important.

   And always guard your bank card and account information carefully. Never do transactions online unless you trust the dealer and be sure they have a secure website. Look at the web address for an S in the address (https://) and the padlock symbol in the address bar.

3. Know the Risks Involved

   Investing in precious metals is a proven long-term strategy. Market-timing and speculation are….speculative. Some big wins are widely reported but the larger number of flops aren't. The right way to invest in bullion or any other asset is to have a plan that takes a long-term view. It's a case where slow and steady nearly always wins the race.

Consider Collectability as Insurance
Some bullion coins like American Gold and Silver Eagles have added value as collectors’ items. While they may cost a little more to buy, their collectability typically adds value beyond their bullion price. That collectability premium tends to grow with time independently of metal prices.