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Gold Bullion Coins or Gold Bullion Bars?


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Since the beginning of the recession, gold investment has become a popular trend as it's hardly affected by inflation. While the president appoints former business executives like Charles E Phillips to help reverse the damage of the recession, you can take measures to help yourself as well. It’s not uncommon to hear new gold investors complain about their gold bullion coins, saying they “want real gold bullion bars, not just coins.” This is a common issue that comes up when investing in gold: Do you make you gold investment primarily in gold coins or gold bars?

A Common Misconception About Gold Bullion

To start, perhaps we need to clear up a misconception that many have: what exactly gold bullion is. It’s quite common for those new to gold investing to think of the round pieces of gold as being worth less than the square pieces of gold bullion. Bullion Coins are a collectors item and in rare supply many believe. If you want to make a real gold investment then you have to buy your gold in square form. This kind of thinking is likely influenced in no small part by the media and movies like James Bond, and books like Cryptomicron that talk about massive reserves of gold bullion bars, stacked in alternating directions as high as the eye can see in the style of Fort Knox. The truth though, is that both coins and bars are equally valuable in terms of gold bullion.

Investing in gold for the sake of protecting your assets means you are primarily interested in the spot gold content of a given object. Both coins and bars contain pure 24 carat gold and are valued at the current market price for spot gold. However there can be added charges to both when you purchase, this is called a Premium. Gold Coins often are sold at a higher premium over the spot gold price due to their collectible nature. Gold Bars though can also be quite a bit more expensive than their spot gold if you are not careful. Often their premium includes the price of refining, fabricating, shipping, assaying, and storing.

Should I invest in gold coins or gold bars?

This depends on a number of factors. Gold bars certainly are “cheaper” to buy in that they often come at a much smaller premium than coins. Also it is always more efficient to buy any commodity in bulk, and buying a 400 troy ounce gold bar, while difficult to lift without a forklift, is about as efficient as it gets when it comes to buying in bulk. These gold bars, called “Good Delivery Gold Bars” are used by major corporations, world banks, and the elite gold investors to settle debts and make payments.

Likely investing in a Good Delivery Gold Bar is out of the league of the average investor. If this is the case then perhaps you will want to look into investing in smaller sized gold bars and ingots. However, keep in mind that while they may be cheaper at first to purchase than gold bullion coins, there can be many additional fees when storing and/or liquidating after you remove them from storage at an insured and recognized precious metal vault. One of the biggest reasons gold bugs invest in gold is to hedge against the falling economy. This means that when the dollar falls, one needs to be able to liquidate their assets and wealth into more meaningful things like food, shelter, and protection. Liquidating a gold bar worth $100,000 is far more difficult than liquidating an equal amount of gold in the form of coins or ingots.

Gold coins or gold ingots are the way to go if you are looking to make a small to moderate gold investment. Gold ingots are likely the best option, however gold coins also hold collectible value and often can be sold at more than their spot gold worth. So if you can manage to pick up some gold bullion coins like krugerrands, American eagles, maple leafs, or panda gold coins at a low premium, then by all means go ahead! Diversification is the key to a good gold portfolio.

Investing in gold in this way will allow you to have both a wealth that is protected against economic collapse and also easily converted into useful and necessary goods should the unthinkable happen.

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