Learn About the Factors That Determine a Gold Bar’s Worth
There’s no better shorthand for “a lot of money” on the silver screen than a Gold bar.
From The Great Train Robbery to The Italian Job, Hollywood is in love with the immediately recognizable shape of a yellow metal brick. Gold ingots are instantly recognizable, and though most movies play fast and loose with their dimensions and values there’s a reason they’re a part of popular culture.
Everyone knows a Gold bar is worth a lot of money. But how much is “a lot?”
Spot Price and Premium
Just like many other commodities, Gold is traded on the world’s financial markets and has a price that changes second by second. Millions of dollars are made every minute as investors place highly leveraged bets on the direction it moves.
But the fundamental measure of the price of Gold is called the “spot price”. That’s the immediate price that Gold will trade for in its very purest form with no premium, the strict value of the metal by weight.
The price of Gold is set by the London Spot Fix, a daily price per ounce created by a bid between the five-member banks of the London Gold Pool. The price is considered set when the call ends and determines many other parts of the market, and the call convenes twice daily at 10:30 and 15:00 GMT. Each bank bids the amount they would be willing to pay for an ounce of Gold and the bidding continues until the prices are within a set threshold of each other.
Though the London Fix matters, the price will change throughout the day as the markets fluctuate. Gold’s price is never completely set; it moves with the world’s markets. It’s often used as a hedge against inflation or uncertainty.
The spot price is only part of the price, though. Whenever Gold is sold there will be a premium over and above the cost. This includes the cost of manufacture as well as any collectible value the Gold may have. Bars do not have a collectible premium the same way coins do, so their value is much closer to the actual spot price than a coin might be.
A Gold bar’s size has some impact on the price it will retail for. In general, the larger the Gold bar the less you can expect to pay in premium.
If you’ve ever shopped at a Walmart and Sam’s Club you’ll be able to spot the difference right away. That bag of candy bars you buy at Sam’s Club is much cheaper on a bar-by-bar basis than the one you buy at the checkout line at Walmart. That’s because it costs much less to manufacture, purchase and market the big bag than it does to break out the small bag. Larger quantities are almost always cheaper on a per-unit basis than smaller individual quantities.
So it goes with Gold. Large bars (for example, a 1-kilo size) carry a lower premium than smaller bars like a gram or an ounce. The flip side of that is that larger bars are both far more expensive and much less movable than a small bar. Less liquidity, but less wasted money in premium.
A Gold bar is worth close to the spot price if you’re selling it, but if you’re buying it you can expect to pay a slight premium for the bar. Depending on the size that premium will change. Gold bars are a very consistent store of value. Whatever size you’re looking for, we have it here on APMEX.com for your purchase. We’ll also buy back your Precious Metals when you’re looking to sell. And if you want to find out what the price of Gold is, we have the very latest in pricing data for you to look over.
Expand your collection today and shop our assortment of Gold bars and rounds.