You decide whether to buy gold bars or coins; your particular needs and preferences should determine your choices. Generally, gold bars have a lower premium than gold coins, because the cost of making a bullion is generally lower than that of a gold coin (and considerably lower for large bars). 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.
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 considered in the final price, so the gold content is not the only factor influencing how much the coin will cost you in the end. Before we begin, it is worth noting that all gold bars can not cost the same. Even those that have a similar weight and size may not necessarily have the same value. It should also be noted that the price of gold bars continues to change every day that markets are open according to the spot price of gold.
National governments issue gold bullion coins as legal tender. The added sense of security this gives investors means that gold coins have better liquidity than gold bars. Gold coins are also more aesthetically pleasing than gold bars, for the most part. The premium is the additional cost charged above the spot price of gold attributed to manufacturing, handling, packaging, insurance and delivery costs.
Reputable bullion traders charge investors very small percentage premiums in an attempt to be competitive, however, they are inevitable, as even bullion traders have to buy gold above the spot price. One factor to consider when buying gold bars is the premium added to the spot price of gold. Smaller sized bars, such as 1-5 gram bars, generally include a higher premium than a 5- or 10-ounce troy bar. The problems with 1kg gold bars are that many people cannot afford to invest more than 30,000 pounds sterling in gold at once, and secondly, it limits flexibility.
Usually, gold bars will not be produced beyond this size and weight for people who want to invest in gold. A Good Delivery gold bar is a 400 oz gold bar manufactured by gold refineries accredited for trading in the global bullion market based in London. With a lower price, gram gold bars are also ideal gifts or a way for new investors to expose their portfolio to gold without breaking their budget. If you want your gold to be more than just a financial investment, you might even start a collection of gold coins, then coins are for you.
The constant fluctuation in spot gold prices does not affect gram gold bars as much as larger bars. Gold coins are free of VAT if they qualify as investment gold under HMRC regulations and European Commission rules. A 100g gold bar costing around £2,600 or a 1 ounce gold bar costing around £800 are popular starting points for some investors. If you look at the value of a Victorian gold sovereign, for example, its value is not only based on its gold content, but also on its age, scarcity and convenience.
Fewer buyers mean that gold bars can be purchased at slightly lower premiums, while dealers can pay a percentage less for your gold bar if you're selling, as there are a larger number of sellers. Obviously, if you sell your gold bar below the price you paid for it, CGT will have no impact on the value of the gold bar. These include Sovereigns of Gold and Britannias of Gold, as well as many limited and special editions of coins from the Royal Mint and other producers. If you want to get the best return on investment from your gold products, you'll want to buy from a trader who charges the most competitive gold premiums for their products.
They may not bring the same amount of money, but gold coins do have value and can work together with other types of gold. . .