The question is often asked: what kind of gold investment should one make? It depends on a variety of factors. Gold is considered a worthwhile investment. When considering purchasing this precious metal one should inspect and compare the prices as they are wide-ranging and expansive.
There are numerous ways to invest in gold. You can purchase gold bullion, which comes in many forms including bars and coins; gold exchange funds, more commonly known as ETFs; ETNS, which are monetary investment notes that offer the possibility of risk often associated with any kind of investment yet provide a solid return based on the performance of gold; and mining stocks, which allow you to invest in the gold market, yet not bullion market. Gold bars and coins are the most popular choices. They add diversification to any portfolio whether the investor is conservative in their investing or aggressive. Are there differences between bars and coins? Yes, but it is truly a matter of preference, more than anything. Here are a few notable differences, however.
- Considered the best option for investors.
- Bars have a lower premium over market price. Larger bars have a lower premium, while small gold bullion bars may cost more.
- When selling gold bullion bars, the raw value of the gold is what is considered.
- Range from a few grams to over 3 kilograms.
- Have strict rules that apply to them to ensure the vitality of the gold bullion bar itself.
- Gold bars can be easily scratched.
- Cast gold bars are made by pouring the metal into a mold, while minted gold bullion bars are created from a sheet of gold metal.
- More efficient than coins in some applications.
- When selling, you typically have to find a large dealer, as many people are not familiar with gold, let alone gold bullion bars.
- The process to liquidate a gold bar can be cumbersome and costly.
- Easier to sell.
- Come in different types and styles such as the Gold American Buffalo, British Sovereign and American Gold Eagle.
- Have a smaller risk of counterfeiting and forgeries.
- The value of the gold in the coin will increase over time.
- Gold coins are usually geared towards the collector.
- Collectible coins carry more of a premium than regular gold bullion coins.
- Relatively straight forward purchase over other forms of gold as they are easier to sell.
We cannot definitely recommend one over the other type of investment because investment goals differ and what’s right for one individual might not be appropriate for another. If you can afford it, acquire a variety of gold bullion bars and coins for your investment portfolio to match different goals.