Making Investment in Gold Bars and Coins

by Bella Palmer

Gold bars and coins are common options for most people who are interested in owning moderate amounts of physical metals. Though buying gold bars or coins is believed to be investors’ safest bet, selling is another matter. Therefore, no matter whether you are a professional or an amateur gold investor, it is important to take some consideration on positive and negative sides of gold bars and coins before deciding in which you are going to invest.

Gold Bars

Many investors mostly assume that gold bar is a simple and efficient way to invest. Gold bars are thin, rectangular slabs of raw precious metal in size of 1-10 oz for smaller units and 10-100 oz for larger units. They are worth the intrinsic value of the metal content. Additionally, gold bars are compact, stackable and easy to store and transfer.

Gold bars are produced by private mints and are not considered legal tender. Generally, the rate of premium is so low over spot price that allows new investors to quickly build their financial portfolio. Somehow, the premium of larger bars is definitely different from that of smaller ones. The larger bars are usually available at the lowest premiums over their intrinsic gold value, while smaller bars tend to cost more.

There is such a trade-off, however, between the premium and flexibility of larger and smaller bars. Smaller gold bars tend to be more flexible than the larger ones as it comes to selling, particularly in a financial crisis.

Gold Coins

Generally, gold coins can be a better investment than bars. They are available at very competitive prices compared to similar size bars since they are efficiently mass produced. Gold coins are almost universally recognized that make them highly liquid and easy to resell. In addition, gold coins are also more collectible than bars.

Different from gold bars, gold coins have the status of legal tender and are produced by a sovereign government’s mint. Each side of a coin includes an intricate design, which often varies year-to-year. Take, for instance, gold sovereign, half sovereign and gold Britannia coins are coins with British legal tender status. These British bullion coins are commonly used in UK gold investments because they do not attract any capital gain tax (CGT).

Due to the collectability, legal tender status, and rarity of gold coins, the premium of gold coins tends to be a bit higher than the metal’s spot price. However, it is nonsensical for investors looking to earn large profits from their investments because coins represent the best value.
After all, whether you wish to invest in gold bars or coins is all about personal preference circumstantially with consideration on all factors mentioned above and particular reference to premium, flexibility and any tax like CGT.

This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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