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Is it Better to Buy Gold Bars or Coins?

Which Gold Investment is Better, Gold Bars or Gold Coins?

Planning your investment strategy may feel like a challenge due to the breadth of products alone, not to mention deciding what kind of product will serve your needs best. Gold bars and bullion coins have distinct advantages and disadvantages.

Pros and Cons of Investing in Gold Bars

Gold bars often sell for a lower premium than gold coins, and based on the weight of the bar, they may also have lower premiums than gold rounds. The lower premium is due to lower manufacturing costs, which provides significant advantages when you consider how much gold your dollar buys.

In practical terms, gold bars can be easier to store since they are stackable and have uniform shapes.

Gold bars do not have much inherent numismatic value. Your gold bar will likely gain value commensurate to the spot price of gold. But the gold bar probably won’t gain value because of the relative scarcity or because of the graded condition of the bar itself.

Pros and Cons of Investing in Gold Bullion Coins

Gold coins are produced by sovereign mints and have a face value. They also have some features that may make them accrue value differently than a gold bar. For example, some gold coins are collected as part of a series, and those coins tend to gain value beyond what a rise in spot price can provide. This is referred to as “collectible” or “numismatic” value.

Gold coins have features that tend to be rare in gold bars- face value, historical context, and relative scarcity. Gold coins can command a higher premium, though there are many options for savvy investors to get coins at a similar markup to bars. Gold coins are also often sold in one troy ounce quantities, whereas bars can be sold in higher sizes. The larger the size, the lower the premium tends to be.

Gold coins can be thought of as the standard. While both bars and coins are highly liquid, sovereign gold coins are recognizable and easily verifiable, and hold the edge in security features as well. Some gold coins also have tax advantages that a generic gold bar does not have.

For investors seeking coins and bars in limited quantities with low markups that are easy to liquidate, gold coins tend to hold an edge on several important features. If an investor has money to spare and is buying larger quantities of gold (at least 10 troy ounces or more), then the lower premiums on larger sized bars may provide a better value as the spread will be smaller.

Quick Guides to Investing

Step 1:

Why Buy Physical Gold and Silver?

If you are concerned about the volatility of the stock market, you’re not alone. The extreme highs and lows of the stock market often lead investors towards safe-haven assets, like bullion. Historically, the Precious Metals market has an inverse relationship with the stock market, meaning that when stocks are up, bullion is down and vice versa.

Step 2:

How Much Gold and Silver Should You Have?

This question is one of the most important for investors to answer. After all, experts suggest limits on how much of any types of investments should go into a portfolio. After deciding to purchase and own Precious Metals and considering how much money to allocate, one can then think about how much and what to buy at any point in time.

Step 3:

Which Precious Metals Should I Buy?

With the frequent changes in the market and countless Precious Metal products available, choosing investments can be difficult. Some want Gold or Silver coins, rounds or bars while others want products that are valuable because of their design, mintage or other collectible qualities. Also, collectors may shop for unique sets and individual pieces for their collections.

Step 4:

When to Buy Gold & Silver

After considering why, how much, and what Precious Metals products to buy, an investor’s next step is when to buy them. This decision requires an understanding of market trends and the impact of economic factors on precious metal prices.

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