We often hear the media talk about investment in gold when its price hits record highs, such as its historical peak in 2011. Generally speaking the talk is about gold coins while, in fact, the major part of gold investing is made in gold bars.
A gold bar must meet a few requirements by the London Bullion Market Association (LBMA) to be considered as an investment asset. For instance, an investment grade gold bar must contain at least 99.5% of gold.
The most “renowned” bar is the kind held mainly by central banks, weighing 12.4 kilograms. This bar is called “Good Delivery Bar” on the professional precious metals market. Due to its price, this kind of bar is generally reserved for institutions. It’s also the gold bar most seen in the movies.
The favourite bar for private owners is the 1kg one, but for more than a decade there have been more and more sizes available. For example, the 1oz bar constitutes a real alternative to the gold coin since they both have the same weight. More recently, small ingots weighing only one gram made their appearance on the market.
The small-size bars are perfect for less fortunate investors still wishing to protect their savings.
What are the Advantages of Gold Bars in Comparison to Coins?
Up to a few years ago gold bars weren’t very popular due to the reduced offering of available bars, starting with 100g bars or even 1 kilogram. It was plain to see why coins were popular, but this argument doesn’t hold today with the variety of sizes available.
The main advantage of gold bars is the price. When you buy coins, you pay a premium that varies according to the numismatic value of the coins. With gold bars there is hardly any premium, so the price of your gold bar reflects its weight in gold.
What are the Ideal Sizes for Bars?
The 1oz gold bar is the perfect one. It should be privileged over the 1oz coin. On top of its light premium, it often comes in the refiner’s packaging, which helps to avoid conservation problems and keep the product in good shape.
The 100g bar, equivalent to the weight of three gold coins, is also an excellent alternative. It is easy to sell back and carries a small premium.