Is it worth investing in gold bars? Should you opt for gold coins instead? Is it even a good idea to consider investing in gold? These are some of the questions that you’re highly likely to ask yourself as an investor who is getting started with gold investments or is considering leveling up from other paper-based gold assets. If that’s you, then you are in the right place, and I will help you understand what you stand to gain or lose by choosing to invest in gold bars. Read on to discover what’s in store for you.
Gold Coins vs. Gold Bars – Which one should you buy?
Gold has retained its place as the most popular precious metal, more so in the realm of non-traditional investments. Different people today purchase gold for varying reasons, ranging from investment assets to jewelry (as a symbol of status). The thing about gold is that it is not all about its flashiness- it also has its intrinsic value, which drives its demand in today’s economy. There are many approaches to investing in gold, but those who opt for bars or coins mainly do so to invest/save for the long-term horizon. The value of gold has historically increased with time, making it a precious metal that’s very rewarding to own.
In Asian countries, gold is used in weddings and other major festivals, as part of the observation of culture, and this also drives the prices of this yellow metal high. Even with most people purchasing gold for use in the manufacture of jewelry, there are still many more people who have realized that they can actually earn some money by purchasing it in its pure form and selling it later for a higher amount of money.
In the U.S., we have also seen the demand for gold increase as more investors (more so those trying to safeguard their retirement investment portfolios economic forces such as inflation) realize that gold is a must-have asset in one’s portfolio.
Thing is, the demand for gold is on the rise, and it has now become a question of what the best approach to investing in this shiny metal is, i.e. investing in gold bars or investing in gold coins.
The pros and cons of purchasing gold bars
Generally, gold bars are best suited for large-scale and seasoned investors. As much as the larger bars are typically availed to the market at significantly lower prices in comparison to their smaller counterparts (cumulatively), they are not usually very saleable. It is hard to come across a low to medium-income earner with enough money put aside simply for the purpose of spending on gold bars. Gold bars happen to be quite expensive, owing to their large size (hence higher quantity of gold), making them a commodity that many cannot afford to purchase without worrying about whether they will get someone to sell to in the future.
The fact that gold bars are larger in size also comes with an added problem. Owing to the fact that they have a larger size makes them more difficult to melt and reshape, hence may involve extra handling chargers overall. Premiums on gold bars are more often than not usually increasing, along with the value of a unit of the precious metal. The price of gold bars is dependent on a couple of market factors, though their value is generally known to remain stable (or increase) over time.
The pros and cons of purchasing gold bullion coins
Gold bullion coins happen to be way more affordable than gold bars. As a beginner who is getting started with gold investing, you should consider buying and holding gold coins, as you gradually get to familiarize yourself with how this industry works and what you can expect from it. Another major benefit of gold coins is that they can be easily disposed of (they offer more liquidity in comparison to gold bars).
Also, gold bullion coins are usually available in very small denominations that range from 0.5 grams to 100 grams. This means that an investor can purchase gold coins strictly in line with their purchasing power at any given time. Such is a luxury that is not accorded by gold bars. A customer who does not have enough money to shell out on a 50-gram bar of gold can opt for gold coins weighing about 1 to 2.5 grams, and start benefiting from holding gold right away.
Another hard-to-ignore benefit of owning gold coins is that they can easily be traded in today’s market, owing to their small size. The customer base for gold coins is way bigger in comparison to that of gold bars, and this means that you can get someone to purchase your gold coins faster. In addition to that, legit gold coins are internationally recognized, making them easier to sell even on a global scale.
Is Numismatic gold worth considering?
The term numismatic refers to the study of currency, but in the gold investment industry, it points to the collectability of gold. There are some investors who also opt to invest in numismatic coins for owing to their rarity. The value of rare coins generally increases over time, making them worthy of consideration for some investors. Numismatic gold coins also generally sell for a premium over the spot price of gold, hence can be more expensive to purchase in comparison to the bullion coins we have discussed above.
There are many ways to invest in gold, and depending on your financial muscle, you can decide to invest in gold bars or gold coins. You may, however, need to consider the pros and cons of each form of gold, just to ensure that you have a smooth ride as an investor.
Once you are ready, you can have a look at what the companies below have to offer, and you can open your gold IRA to get started with gold investments right away.
That will be all for today’s article in which we have addressed the question, is it worth investing in gold bars. I hope you found it helpful and that you now know what to do. If you have any questions with regards to how you can own and invest in gold, drop them in the comments section so that I can get back to you ASAP.
I wish you well,
Eric, Investor and Team Member at Gold Retired!