Gold is a rare precious metal that has captured the imagination of people for millennia, and it’s not really that hard to see why. The element’s unique properties make it highly resistant against oxidation and corrosion, giving the metal a characteristic beauty and permanence that is treasured by people throughout the world.
In the old days, gold was cherished by monarchs and the nobility, and it was even associated with the divine. Today, it is seen as an important symbol of human achievement. Gold is used in various prizes that honor successful individuals. As a case in point, just think of the multitude of Oscar trophies, Nobel Prizes, and Olympic medals that have been handed out through the decades.
Gold also continues to play an important role in the global economy. Central banks across the world hold gold as a store of value, intended to protect their respective countries from the impact of economic uncertainties. Around 20% of all the gold that has ever been mined is held privately by people from all over the world in the form of gold bullion bars and gold bullion coins.
If you’re an experienced gold buyer, you are most likely already aware of the rationale behind purchasing these gold bullion bars and coins. However, if you are just preparing to take a plunge into the gold buying business, it’s best to have a basic knowledge of the foundational objectives that buyers have in mind when they purchase these products.
Essentially, private individuals buy gold for a purpose that is similar to why governments hold it. They see gold as a way to diversify their wealth portfolio and to protect it during times of economic, political, or social crises.
This is because historically, gold has held its value, even during periods of unrest and uncertainties. When inflation occurs and the prices of goods and services soar, gold tends to retain its purchasing power while paper currencies generally lose their value.
Gold bullion bars
Gold bullion bars are the best choice for individuals who have the financial capacity to buy huge amounts of gold. These bars are typically cast in heavier weights compared to gold bullion coins, with the 1000-gram (32.15-troy-ounce) kilobar being the most popular weight class among private gold buyers.
Gold bars exist in smaller and larger sizes, too. For instance, central banks, governments, and global agencies like the International Monetary Fund prefer bars cast under the Good Delivery specification, which can weigh between 350 to 430 troy ounces.
Gold bullion coins
Most gold bullion coins are minted with a weight of between 1/20th of a troy ounce to 32.15 troy ounces (1000 grams).
Given that there are a lot more people who can afford to buy gold in smaller weights than those who can buy it in larger weights, it stands to reason that gold bullion coins are usually more liquid than gold bars. This means coin owners have the advantage of being able to sell their gold more easily.
To summarize, your decision on which gold bullion products to buy should boil down to your individual needs. If liquidity is important to you, then bullion coins might be a better choice.
If, however, you have the money and you have already put your mind to purchasing a large amount of gold, then buying the bigger bullion bars would probably be the most practical choice. You could even save a good amount of money by going this route since bullion bars usually have smaller premiums compared to bullion coins.
It is important to make certain that you are buying gold from a reputable dealer to avoid the risk of being defrauded or receiving improper advice regarding your purchases. Do some research about the background and history of your prospective dealer. There are probably lots of reviews online written by their past and existing customers, so do take advantage of those.
Also check if the dealer is associated with or is accredited by respected organizations like the Better Business Bureau (BBB), the Business Consumer Alliance (BAC),the Industry Council for Tangible Assets (ICTA), the Numismatic Guaranty Corporation (NGC), the Professional Coin Grading Services (PCGS), or the American Numismatic Association (ANA).
Readers, share your experience of gold investing. Especially how easy it is to sell your bars and coins, when you need to sell them?