Gold Bars Or Coins For Investment

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Good Delivery Gold Silver & Platinum Refiners

Investing in Gold Bars vs. Gold Coins – The Ultimate Decision!

One important consideration when buying investment grade precious metals bars is to know whether the refiner of the bar is on the London Bullion Market Association Good Delivery List for gold or silver. Likewise for platinum bars, its important to check whether the refiner is listed on the London Platinum and Palladium Market Good Delivery List for platinum. Both LBMA and LPPM are global industry associations for the precious metals markets, and their Good Delivery Lists are an endorsement that the listed refiners meet the Associations high quality production standards in the refining of precious metals.

What About Gold Coins

Compared with a solid gold bar, gold coins are much smaller. But that doesnt lower their value at all. If anything, their value is likely to increase the longer you own one. Considering how the government mints all coins with a face value stamped on them, making a habit of collecting them will be extremely beneficial for you in the long run.

This form of gold is highly recommended for those curious about investing in precious metals. Since gold coins come in a small size, you can invest at a smaller price compared to what you would for a gold bar. Whats more, gold coins boast price stability. Their price remains stable even during a global financial crisis. Thats why a lot of people tend to buy gold in times of crisis, thereby causing a soaring gold price.

Unlike gold bars, coins are inlaid by a pattern exclusive to their locality. Since the government mints them instead of private organizations, these coins are one way to express a countrys culture. For this reason, you can consider a gold coin as a valuable piece of history that coin collectors would die to have. However, gold coins are smaller pieces, so the volume you have to trade or sell is much more than gold bars.

But theres no need to worry. Gold coin manufacturers are much more common, unlike legitimate manufacturers that are harder to look for in some countries. Hence, you wont have a hard time scouring the internet to figure out whether an overseas manufacturer is legitimate.

Is It A Good Idea To Buy Gold Coins Or A Gold Bar

Although the decision to invest in either gold coins or gold bars is often based on personal preferences, you should consider other factors such as tax implications, your investment strategy, and more importantly, what might give you a better deal when selling.

For centuries, gold has proven to be a stable, wise, and lucrative investment choice for both individuals and institutions. In addition to avoiding risks that come with relying on the unstable paper-based currency, investing in gold is a sure guarantee that you won’t be affected much by inflation or currency devaluation. This is why smart investors turn to such precious metals to protect their wealth and diversify their portfolios.

You’ll, however, have to choose between gold coins and gold bars or go for both. And as with any investment option, investing in gold coins or gold bars has its advantages and disadvantages.

It’s important to note that there’s no right or wrong answer when it comes to choosing between gold coins and gold bars. The decision to invest in either gold coins or gold bars should be generally influenced by your objective as an investor. After all, they’re both lucrative investments and probably much better than paper currency.

In this brief article, we’ll take a look at how gold coins and gold bars compare as an investment vehicle. At the end of this read, you should be in a much better position to make a sound decision.

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The Standard Format Has A Lot To Offer Both Beginners And Experienced Investors And Has Many Advantages Over Coins

Opting for a gold investment means investors are choosing a stable asset which offers a host of opportunities. Just like the classic gold coins, gold bars especially are a standard, widely recognised format which is available in numerous denominations, and are thus suitable for almost any investment budget. Financial experts consider this yellow precious metal to be a safe currency which has proven its reliability time after time. If youre looking for evidence to back this claim, look no further than the market price of gold, which is the decisive barometer of the value of this commodity. In times of crisis, the gold price always rises most recently for example during the euro crisis of 2011/2012, and again during the coronavirus pandemic of 2020.

Popular Gold Bars And Special Shapes

100g Gold Bullion Bar : Pre

Even beyond the larger kilo bars, certified gold bars are available in many convenient and manageable units from 0.5g to 1 kg and from 1/10 up to to 10 ounces. Popular investment sizes tend to be gold bars marked at 100 grams or one troy ounce because these offer the best price/performance ratio. And as a useful rule of thumb, the higher the weight of the bar, the lower the surcharge. This is because there are trading premiums to factor into a sale price beyond the actual value of the pure precious metal. So basically, the production of smaller units is always associated with higher costs.

In addition to classic gold bars, there is also another common format known as the coin bar. These products have an embossed face value and, just like coins, are therefore considered legal tender in the country of issue. The Dragon Rectangular, for example, is a popular gold coin bar which is issued by Perth Mint, an Australian mint based in Perth, Western Australia. And due to its elaborately designed face motif, this coin bar is also very popular among numismatists.

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Paying Premiums On Gold Investments

Before we move on to look at the other advantages of investing in gold coins, we need to consider the thorny issue of premiums.

It’s true that, in percentage terms, you’ll pay a lower premium if you buy gold bars. By premium, we mean the extra charge that results from the cost of manufacturing, order processing and packing, delivery and insurance. As a 1kg gold bar is a large single item, the premium you’ll pay the bullion dealer, as a percentage of its overall price, is relatively small.

However, this benefit starts to diminish if you’re buying multiple smaller gold bars, such as several 1g or 5g bars, to benefit from greater flexibility on your gold investment. The order processing and packing elements will increase incrementally as you buy more bars, thereby accounting for a larger percentage of the overall price.

At this point, there’ll be a smaller difference in the premium you for gold bars vs gold coins. So your viewpoint on premiums really depends on your gold investment strategy: the more individual bars or coins you buy, the less difference there is.

How Do I Know My Gold Bars Are Real

Counterfeiting techniques are becoming more and more advanced. So many investors have growing concerns about the authenticity of their precious metal holdings. The best way to ensure that your gold bullion is real is to only buy from a reputable and accredited dealer like Provident Metals. But there are also a few simple ways to test the authenticity of your metal at home. You can do a size test by comparing the dimensions and weight of your bar to charts available online. Or, you can test your bullion using sound, since gold will make a pinging sound when struck. And real gold does not have any magnetic properties, so it should not be drawn to a magnet.

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How And Why To Invest In Gold Coins

Gold is one of the rarest materials on earth so its no wonder gold bullion coins are so popular with investors across the globe. Gold coins are one of the longest standing forms of currency and have been around for hundreds of years. Unlike bars, coins have a fabled history each of the series is linked with an interesting backstory that arouses the interest of collectors. These historic connotations makes them a valuable investment choice. Like other precious metals, such as silver, gold coins also hold their value against inflation and unpredictable stock market crashes. When an economic crisis hits, those who have invested in the stock market suffer financial losses, but gold owners dont have this risk because gold is a hard asset that wont vanish. Because of its staying power, gold is considered a safe option by investors looking to protect themselves against financial turmoil. Moreover, it can be passed down through the generations because it maintains its value and has the potential to offer healthy returns over the long term.

Bullion Bar Size & Divisibility

Investing In Gold Bars vs Coins? Choose Wisely!

Whether to buy large or small bars depends on your preference. If divisibility is a consideration and you have planned to sell a part of your investment in the future, it might be more practical to purchase smaller bars, for example ten 100 gram gold bars rather than one 1 kilogram gold bar. In that way, one or two 100 gram bars could be sold without liquidating the whole investment.

Whether to buy one or more brands will also depend on your preference. While gold bars and silver bars are primarily a form of saving and investment, they can also be simultaneously collected. For example, you could pursue an investment approach of purchasing all 1 troy ounce minted gold bars from the leading refiners, or all 100 gram minted gold bars, or all 1 kg cast gold bars.

For those who wish to save in the form of precious metals bars but do so in a cost efficient and incremental fashion, BullionStars Bullion Savings Program should be considered. This allows savers to buy fully-backed metal grams in gold, silver or platinum, and then subsequently convert these grams into 100 gram PAMP cast gold bars, 15 kilogram Heraeus silver bars or 1 kilogram Heraeus platinum bars, respectively, when the BSP holder has accumulated sufficient grams of the relevant metal.

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Buying Gold Bullion Coins And Gold Bars

Civilizations have equated pure gold with gods, wealth, and immortality. For centuries, gold bullion has symbolized power and used as a storage of wealth. The fact that gold neither corrodes nor tarnishes not to mention the beauty of the precious metal made it suitable for deities and royalty in ancient civilizations. A gold standard was used as a monetary policy within and between nations but the world gold standard ended in 1976. The 1930s was the last time gold was used in minted coins designated for circulation. Historically, the value of gold was based on perceived rarity and its distinctive color.

Almost half of the new gold consumed each year is for jewelry, 40% is for investments and 10% for industrial purposes. The high malleability and conductivity of gold are characteristics that make gold used in many types of computerized devices. The precious metal is also used in tooth restoration, as an anti-inflammatory, and infrared shields.

Paper currencies have come and gone but gold remains in demand and has an inherent value. Gold bars, gold ingots, gold coins, and Investment Grade Coins are all popular ways to invest in the yellow metal.

Beware And Protect Against Counterfeiting

Counterfeiting is a danger when buying gold bars. Simple counterfeits can be made of gold-plated brass. These fake bars can be recognized by their lighter weight. Gold is a heavy metal. Heavy fake gold bars consist of a tungsten core, which is wrapped in real gold. In contrast to investment coins, smaller bars do not have to have standardized dimensions. Counterfeiters can take advantage of this variability. The purchase of bars whose manufacturers have been certified by the London Bullion Market Association offers greater security.

A key advantage of bullion coins over bars is their increased security against counterfeiting. The true-to-detail minting of a coin requires more effort than the stamp on a bar. Counterfeiters, therefore, prefer gold bars. Investment coins enjoy great trust among investors and traders worldwide.

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When Is Gold More Expensive And When Is It Cheaper

Gold should be a profitable investment during financial crisis and stock market downturn, but it will not yield satisfactory profits in times of economic boom. Simply put, when the economy is in good shape, capital flows into risky assets, such as stocks, while in bad times it is diverted, for example to gold, which many people still consider as a financial safe haven.

Lets add, however, that gold price behavior is also influenced by inflation and interest rates. When we are dealing with positive real interest rates , you can easily protect yourself from inflation, for example by using safe bank deposits. It is not a good time to invest in gold, and in general also in stocks and other risky assets. After all, why would you risk losing part of your capital, when a bank can provide a sure and satisfactory profit?

The aforementioned regularity is confirmed by historical quotes of gold prices expressed in US dollars.

As you can see, 1980-2001 was a time of a major bear market with few major upward moves. As mentioned earlier, the main reason was the fact that in that period we were dealing with high interest rates and, at the same time, low inflation. However, let us add that for a previous decade, crude grew more expensive , and at the end of the seventies recorded a rise in parabola prices. Sooner or later, this bubble had to burst and it did.

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Is There Tax On Gold Bars

2020 1 oz Gold American Buffalo $50 Coin BU

The tax investors pay on gold bars depend on which state the bar is bought and stored in as each of the 50 states can set its own level of sales tax.

While some states are zero-rated on investment grade bullion, other states can charge up to 10%. This basic state-wide tax is in addition to any local county or city sales tax.

As an example, in Alabama, the basic sales tax on bullion is 4% whereas residents in Mobile or Montgomery need to pay an additional 10% local rate giving a total state and county sales tax of 14%

Sticking with Alabama any investment bullion bought outside of state is subject to a use tax at the same rate as the sales tax.

This gives some US gold dealers and metals investors a big advantage over others based on their location.

No sales tax on Coins and Precious Metals.

West Virginia6% sales tax on Coins and Precious Metals plus a 1% local tax in some Counties and Cities.

Wisconsin5% sales tax on Coins and Precious Metals plus up to a 0.5% local tax in some Counties and Cities.

Wyoming4% sales tax on Coins and Precious Metals plus 0.1% 2.0% local tax in some Counties and Cities.

Capital Gains Tax on Gold Bullion

In America the IRS considers bullion to be both a Capital Asset and a Collectible, so Capital Gains Tax will be payable on any gains made when bullion is sold, and this is set at a maximum of 28% .

To discuss specific CGT liabilities you should speak with a licensed accountant or tax specialist.

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How To Buy Gold Bars

Investors looking to enjoy the touch, feel, and security of owning gold may wish to buy gold bars instead of intangible investments such as gold exchange-traded funds .

Physical, investment-grade gold, also referred to as gold bullion, can be purchased at spot price, which is the price of unfabricated gold plus additional costs, which vary depending on the seller. Physical gold can be liquidated in the unlikely event of a total economic collapse.

The Canadian Maple Leaf Gold Coin

The official gold bullion coin from the Royal Canadian Mint is the Maple Leaf. It is a 24 karat coin and is available in multiple sizes. The front features a portrait of Queen Elizabeth II and the reverse shows an iconic Canadian maple leaf. The Perth Mint in Australia is a major producer of gold coins, with a wide range of coins issued each year. The flagship coin is the Gold Kangaroo. It is 24 karat and has a face value of 100 Australian Dollars. It pictures Queen Elizabeth II on the front and a kangaroo on the back. The kangaroo moves in position each year.

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Why Buy Gold Bars

Some of the buying gold bars include the following:

Quick Diversification

Gold bars are preferable if you want fast, high-volume diversification with gold. Due to their size and simplicity, you can use them to increase your gold holdings quickly. Buying 100kg of gold is faster with gold bars than gold coins. The mints will process and ship your order a lot faster.

Lower Production Costs

Due to lower production costs, gold bars often attract cheaper premiums. The premium is the extra amount youll have to pay in addition to the price per ounce. The additional fee covers the cost of production, shipping, and the mints profit margins.

Gold bars dont have any of the intricate designs of gold coins. Therefore, they dont attract a lot of labor and machining costs.

Easier Valuation

You can see at a glance how much your gold portfolio is worth. With gold bars, the price basis is the weight and nothing more. You dont have to pay more for intangibles such as rarity, grade, etc.

The ease of valuation is a popular tie-breaker in many debates around gold coins vs. bars.

Storage Flexibility

Gold bars are compact, portable, and durable. You can choose a wide range of storage options. You can elect to store your gold bars in a storage unit or a wooden cupboard without any protection. You can stack them or store them side by side without worrying about damage.

Multiple Mint Options

Ease of Transactions

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