Before the purchase. Before the trade.

Name the instrument precisely

Begin by identifying what the transaction delivers: physical metal, a custody-account balance, a fund or trust interest, a mining share, or a derivative contract. These are not interchangeable forms of ownership. Record the quantity, the unit and any contract multiplier. For a physical object, distinguish gross weight from fine-silver content. For an account or security, use the legal documents to establish the actual rights attached to it.

Build the complete cost picture

Separate the reference metal value from premiums, spreads, commissions and other charges. Then include ongoing costs such as storage, insurance or product fees where applicable. Ask for terms in writing and examine the price or procedure for selling back. The CFTC’s precious-metals guidance emphasises comparing costs and potential resale proceeds. A low-looking headline quotation is not enough to establish an economical transaction.

Check custody and the exit

For stored metal, establish who holds it, what the records identify, which risks are insured and how withdrawal or sale works. LBMA’s account framework distinguishes title to specified bars from a contractual claim against a provider. Product-specific terms determine what this means in practice. For traded exposure, check liquidity, settlement or expiry and order rules. Access to an asset and the ability to exit on acceptable terms are separate questions.

Make uncertainty explicit

Finally, distinguish an observation from a forecast and a forecast from an action. Write down the scenario being considered, what would undermine it and how adverse outcomes would affect the position. Any sizing calculation depends on its assumptions, including costs and execution. A checklist cannot remove market risk or validate a seller by itself. Its purpose is to expose unanswered questions before a persuasive chart, attractive object or urgent sales pitch takes over the decision.

FOLLOW THE EVIDENCE

Sources & further reading

Sources checked 14 November 2026. Reference organisations do not endorse this website. Price examples are hypothetical and educational.