Gold is considered a reliable investment in all cases. Gold bars are especially important, since their value can be accurately determined by the spot price in real time. Gold coins will have premiums slightly higher than the spot price than gold bars, due to additional minting costs and the commemorative nature of their value. As a bullion investor, flexibility often refers to how easily you can buy and sell your investment or products.
While gold bars offer you the best option if you want to preserve your wealth, gold coins offer the best value when it comes to selling. Of course, gold bars will offer the best value when buying, but they don't give you the flexibility you want when you want to sell. In general, premiums for gold bars tend to be lower than gold coins of the same weight and fineness. Why? It all comes down to production costs.
Gold coins can be more expensive to produce than gold bars due to their intricate design, emphasis on condition and appearance, and therefore higher labor and machining costs. In addition, the price of a gold bar is mainly based on its weight. With some gold coins, such as certified coins, the rarity and grade of the coin are also taken into account in the final price, so the gold content is not the only factor influencing how much the coin will cost you in the end. Gold bars tend to be cheaper to manufacture compared to gold coins.
Therefore, they have a smaller premium compared to gold bullion coins. The larger the gold bar, the lower your premium. One kilo gold bar will include a lower manufacturing cost than 10 100 gram gold bars. On the contrary, the main advantage of buying physical gold (such as bullion and coins) is that you own the gold.
In addition, it owns an asset that can be stored outside the financial system, reducing counterparty risk. Many supporters of gold suggest that it is a good hedge against rising prices. However, the facts do not support this statement. Gold is usually a better protection against a financial crisis than a protection against inflation.
In times of crisis, gold prices tend to rise. However, this is not necessarily the case during periods of high inflation. If there is a financial crisis or recession on the horizon, it would be wise to buy gold. However, if the economy is in a period of high inflation, it would be wise to approve.
For experienced and large-scale investors, gold bars are a better way to invest in gold. These large bars are usually available at the lowest prices compared to their smaller counterparts. However, there is a catch in buying large bars. These bars do not have the same salable nature as the smaller ones.
This is because their choice of buyer is restricted due to the larger size and, consequently, the higher price of large gold bars.