Buying Gold Bars VS Buying Gold Coins: Which is Better?
Gold is considered to be a fairly safe investment, and when the market is volatile, it's often a better investment than the stock market or similar investment avenues. However, it's not as easy as simply buying low and selling high.
Simply deciding to buy gold bars or buy gold coins forces you to consider multiple factors to maximize your gold's value.
Today, we'll go over the differences between each of the main gold assets, and you'll have a fair understanding of which one to focus on by the time we're finished.
You'll quickly notice that gold bars are less expensive per Troy Ounce than coins. This is due to a lower manufacturing cost, and because they're typically sold in larger sizes to pass on savings. However, that doesn't make them a better investment.
A gold coin will usually come at a considerable premium compared to an equally-sized gold bar. However, coins can gain value beyond their melt weight, and their other perks often outweigh the lower price per ounce of bars.
Sometimes, you'll find that it's best to pay a premium on your initial investment to enjoy a higher payout.
In terms of which one is safer to purchase, the two are mostly equal if you purchase them from the right source. Most government guarantees are backed by a government agency. For example, the US government utilizes the Secret Service to ensure that counterfeits are never successfully created and distributed.
However, private mints tend to be more on the cutting edge of built-in anti-counterfeit measures. The most reputable companies have already implemented UV stamping and various other high-tech security measures to make cheap counterfeits difficult to distribute.
Who you trust to back their guarantee more reliably is more of a personal decision.
Purity is a factor you need to consider when you trade or move your gold across international borders. The most popular gold coins are 22k gold, and due to the addition of filler metals, trading them requires you to know their overall gold content. Bars are typically sold .999% pure.
Purity also affects international transport. Various governments implement high taxes on 22k gold, or coins, that aren't from their mint. This is a way to encourage traders to purchase from their country and give the country's gold value an advantage.
Ease of Liquidation:
The entire point of collecting gold bullion is to eventually sell it as an asset. To do that, you need to be able to sell it in the first place. This is where the decision to buy gold coins shines the most.
While coins are available in similar weights to bars, coins are most-often sold in 1-ounce variants. This makes them easier to divide into reasonable amounts of fiat currency, which makes them easier to offload on multiple buyers. For example, if you have a collection of 40 gold coins and a 1-kilo gold bar, you can sell the coins to 40 different buyers very quickly. You need one deep-pocketed buyer to offload the bar efficiently.
The premium price associated with coins will also pay off in the liquidation phase. Coins minted by reputable dealers will fetch a higher-than-spot price, while still appealing to the average buyer. This allows a collection of gold coins to not only sell faster than a gold bar but for a higher profit, too.
Mix Your Stack
After reading this, you're probably leaning more towards gold coins than you are bars. That's a good choice that will likely pay off in the long run. However, the ease of stacking and generally smaller bulk prices of bars make it a good idea to add at least a few of them to your collection.
Either route you take, you can rest assured that investing in gold bullion is one of the safest investments you can make, and the time to start your collection is now.