What are the laws in the US for buying gold with federal reserve notes?

I want to know the nuts and bolts of investing in gold. I heard that there are laws that make federal reserve notes "irredeemable" in gold. Do i have to exchange currency and buy gold in say Europe? Is this something any broker can do, or is it better to get with a specific kind of broker?

The money I have to invest is understood to be "losable", and I know how volatile gold is, but I want to buy now because I think its going to up quite a bit pretty soon. Im not going to invest anything I cant afford to lose.

Thanks

There is more than one way to invest in Gold (or any other precious metal).

One method is in the commodities market (also known as the futures market). There is not enough space to get into full details here. However, in simple terms, through a commodities broker, a person would buy/sell a futures contract of gold and then sell/buy that contract before maturity hoping that the price of that contract would move favorably to their position. Look for a book on futures trading at a book seller for more information.

The other method to invest in gold is to actually buy the gold. The most common method is to buy gold bullion in coins and bars that are minted by well-respected minters or governments. For example, the U.S. Mint has the American Eagle series of bullion coins. http://www.usmint.gov/mint_programs/?act...
They come in various sizes also, from 1/10 of an ounce to 1 ounce coins. The reason you buy bars or coins made by a mint is because those are certified to contain a certain amount of gold or other precious metal. An ingot, may or may not, be certified and then you would have to have it assayed before you sold it and that costs money.

You can buy minted bullion at several places online. One of my favorites is Bullion Direct. http://www.bulliondirect.com/index.jsp
Another place is Kitco. https://online.kitco.com/
You can have these places hold your bullion for you or you can have it delivered. I personally like it delivered. There is a small thrill when you hold the gold in your hand. :)

Anyway, that should get you started. A small disclaimer, I buy and sell bullion through Bullion Direct, but I have no other financial interest in the company. I have purchased bullion through Kitco, but I do not have any financial interest in the company.

BTW, Federal Reserve Notes (or dollars) are legal tender. They are not redeemable in gold or silver because the currency is no longer backed by a set amount of gold or silver. Many years ago, you could walk into a bank with a silver certificate (an old form of the dollar) and ask for the silver. That is no longer the case. However, there is no law in the U.S. that prevents you from owning gold and silver at this time.

Good luck,

Edit: The suggestion below, buying the ETF IAU, is also a good way to invest in gold. Less risky than buying commodities and less expensive than buying bullion.

If you want to buy gold then open a brokerage account and buy the ETF IAU.