If you have made the decision to make an investment in physical gold, you want the best price per ounce possible. This can be accomplished by purchasing gold investment bars. Although gold coins are also a good investment, they are more expensive.
This is due to the manufacturing process and packaging costs. Gold bars are the backbone of the industry. Central banks, average investors and everyone in between purchase and store gold bars.
As long as you take the right steps before you make a purchase, you will not go wrong with gold investment bars. You can purchase them in a variety of different sizes and shapes. You can even save money by buying them in bulk.
You decide how much of an investment you want to make from one gram to large gold investment bars. The most expensive gold bars are one-gram novelty bars and minted to be given as gifts.
These gold bars are tiny, generally coated in plastic and the cost is at least double the actual content of gold bullion. The cheapest gold bars are found in London and are called Good Delivery bars.
These bars weigh 12.4kg or 400 ounces. Professional bullion dealers trade these gold bars which are held by the central banks. After all, the gold market in London is open 24 hours and considered the center of the world.
If you have ever looked at the spot gold price available in your newspaper and on the internet and wondered how it was established, it is a combination of the 400-ounce Good Delivery bars and New York market-approved Comex gold bars.
Types of Gold Investment Bars
There are currently over 30 different types of gold bars circulating throughout gold markets all over the world. Some of these bars experience heavy trading, are available five days per week and have the largest available market in the world.
The London Bullion Market Association approves and closely monitors 63 gold refineries with an active status. In London alone, approximately 150,000 Good Delivery bars are produced every year.
According to current pricing, these bars have a value of $102 billion. There are smaller local markets for gold in the Middle East, Singapore and India. The ten tola bar is the most widely traded.
This bar does not generally have a serial number stamp, with a weight of 117g or 3.75 ounces each. Despite this, every year two million ten tola bars are minted or cast. In China, the five tael biscuit is the most popular investment gold bar.
This gold bar is manufactured in Hong Kong with a weight of 187g or six ounces. The Chinese Gold & Silver Exchange has recognized and approved the five tael bars. This institution has been established for nearly a century.
The most popular gold investment bar outside of Asia purchased for personal storage by private investors is the 32.15 ounces or 1000g kilobar. Every year over one million of these bars are manufactured, usually in Switzerland.
Extremely large quantities of gold bars are made every year by leading refineries with a one-ounce weight. These bars are promoted worldwide as a cost-effective way to invest in gold.
Although the smaller gold bars are less expensive, they do not offer you all of the benefits of larger gold investment bars.
Why Purchase Gold Investment Bars?
The cost of purchasing gold coins is usually more than the same weight of gold bars. You can save money by purchasing larger bars because the cost is less according to weight.
You can sometimes decrease or eliminate sales tax by purchasing gold investment bars as opposed to gold coins. This is dependent on your local tax regime. Your savings is also dependent on the fineness or quantity of the gold bars you purchase.
A good example is Good Delivery gold bars. These bars are guaranteed to contain a fineness of a minimum of 99.5 percent. You can also decrease your taxes in many countries by purchasing 100 or 400-ounce bars.
These types of gold bars have been classified as investment gold and are ideal for your personal retirement plan. Your cost is further reduced since delivery is available through the main market.
If you purchase smaller gold bars with a weight of 100g for a personal investment, your can store them in a home safe or a safety deposit box as opposed to paying for a secure storage facility or vault. The drawbacks of smaller gold bars include:
One of your best options is to store your gold bars in an IRS-approved secure storage facility. If you are purchasing gold for a Precious Metals IRA account, this is mandatory. The annual storage fees are reasonable and include insurance.
When you purchase from a reputable gold dealer, your shipping costs to the facility are usually covered. We recommend considering the larger 400-ounce gold bars. These are the same bars traded by professional dealers and bullion and central banks.
All of your gold is stored in secure vaults recognized by gold bullion dealers. If you remove your gold from an approved storage facility, the chain of integrity is broken. This means the next buyer does not have the same guarantee.
When your gold bars retain their original integrity, you should receive the maximum value when you decide to sell.
Choosing the Right Size of Gold Investment Bars
Once you have decided to invest in gold bars, your first step is to determine the best size for your individual goals. You can purchase gold bars in a wide range of weights and sizes.
Wafer bars are so thin the weight is as low as one gram. You can also find gold investment bars as large as 400 ounces. ETFs, exchanges and central banks ate interested in purchasing the larger bars.
This is because under normal circumstances there is a higher premium with the larger bars. The manufacturing cost of a one-ounce bar is higher than a kilo gold bar. This does not mean you should purchase the heaviest gold bar you can find.
The opposite is actually true. You do not receive the same divisibility with larger bars as you do with smaller ones. Selling a larger bar means the investment liquidated is sizeable.
You will find it is much easier to sell several smaller bars with the same gold weight as a larger bar while receiving exactly the same currency. If you are selling a 100-ounce bar, the majority of investors do not have the funds to make a purchase.
When you sell smaller gold bars, you have more potential customers. Unfortunately, counterfeiters target large bars because the price is so much higher. If you are selling a larger bar, there is a good chance an assay is necessary.
An assay is an inconvenience, requires an additional expense and delays your payout. If you purchase a large gold bar, the benefit is you pay a smaller premium. We recommend against purchasing the largest gold bar you can find.
This is because only an investor with a high net worth will be able to afford to buy your gold. Not all of these investors will be interested since many of them already have larger bars and are interested in smaller ones as well.
Even though you will pay a higher premium for smaller bars, the affordability is there. No matter which size you select, you will have a valuable investment with the potential to substantially increase in value over time.
Prior to making a purchase, you need to take the following into consideration.
You should look for gold investment bars with proper stamping and a recognized hallmark. This ensures the bar you are purchasing is reputable. This information is not included with some of the private mints throughout the world.
This can signify the bar is low quality or not pure gold. It is critical to understand you need to make certain the gold investment bar you are purchasing is real. If the bar is reputable, you will see stamping including:
Purchasing gold bars that have these markings is extremely important. If you do not have them, there is no way to be certain what you are receiving. When you sell them, the future purchaser will most likely demand an essay.
Another way to make certain you are purchasing a genuine gold bar is to look at the hallmark. A hallmark is the brand of the gold bar or the manufacturer or refiner responsible for the minting.
We recommend purchasing from a well-known and reputable refiner to ensure the gold bar you are buying is high quality. This will eliminate any issues when you decide the time is right to sell.
A good hallmark enables you to sell your bar almost anywhere throughout the world. This means your gold is extremely liquid. You can also purchase a few one-ounce bars to sell if the need arises.
If your net worth is high, we recommend purchasing a combination of both large and small gold bars.
The Most Highly Regarded Refineries
The most highly regarded refineries and mints in the world include:
The simplest way to avoid being scammed is to purchase a reputable brand from a reputable dealer. By purchasing a bar with a recognized hallmark, you can be assured the proper stamping is on your gold investment bar.
Where to Purchase Gold Investment Bars
We believe the most important precaution you can take is to purchase your gold investment bars from a reputable dealer. When you work with a reputable dealer, you receive a good education to help eliminate any pitfalls.
The dealer will help guide you to the best products available for your individual goals. You will not have to worry about pushy salespeople and you will receive a buyback policy.
One of the best ways to determine the reputability of the dealer is to check their Trustpilot rating. Trustpilot gives preference to dealers with plenty of experience. The best dealers have a lot of repeat business.
Read the reviews to make certain there were no negative experiences when a client was ready to sell back their gold. Do not assume a website with the Trustpilot logo is legitimate. Unfortunately, copying a logo is not difficult.
When you look at a dealer website, there are signs the dealer is not completely legitimate. We recommend avoiding any dealer only promoting the most expensive gold investment bars.
Some dealers will attempt to sell you rare coins as opposed to gold bars because the markup is much higher. Always trust your instincts. If you have a feeling something is not right, trust your intuition and find another dealer.
If you need more information, the dealer should answer your questions upfront and honestly. Larger dealers with a strong volume are a good option due to the greater flexibility available.
We are not advising against conducting business with a smaller dealer but keep in mind they may be unable to fulfill a larger order and the selection of gold bars may be limited.
Make certain you check delivery times. If your order does not ship in two to four days after your payment clears consider it a red flag. You should also check the buyback policy of the dealer.
Some dealers will buy back your gold when you are ready to sell while others will not. If the dealer does not have a buyback policy, we recommend conducting business elsewhere.
You want a dealer that will still be in business when the time comes to sell in addition to a guarantee you will have a buyer such as the dealer you purchased your gold bars from.
Another benefit of a buyback policy is you will receive a better resale price since you purchased your gold bars directly from the dealer. Your next consideration is the types of payments accepted.
The majority of reputable dealers accept both money orders and checks. If you are willing to pay an additional cost for the convenience, you can usually use a credit card or bank wire.
Certain dealers accept digital payments such as bitcoin and PayPal. No matter which type of payment you prefer, an online dealer will not ship your gold until your payment has cleared.
You need to determine if you prefer purchasing from an online dealer or a local store. There are advantages with online dealers such as locking in the market price when you are ready to buy and making a fast and easy purchase at any time.
We have found a lot of online dealers offer a better price than local stores due to much lower overhead. We recommend comparing the following between dealers before you make a decision.
When you consider all of the above, you are able to purchase high-quality gold investment bars from a reputable dealer to meet your specific goals and needs.