If you want to invest in the gold market, you’ll need to decide how you will go about doing it. Or, more specifically, what type of gold you’re going to buy. The main types of gold that people buy for investment are gold bars or gold coins, and each has its respective pros and cons.
What’s the difference between gold bars and gold coins?
The best practice for beginners to investing in gold is to have a clear-cut understanding of what gives both a gold bar or a gold coin their individual value or collectability. Simply put, a gold bar is a small square of the valuable metal, usually minted into a neat cube shape. For investors and collectors alike, it is important to note that the bar’s weight and purity, in addition to its gold content, is usually inscribed onto the bar’s surface.
In the case of a gold coin, however, there is the added attraction to collectors that the gold was once used as a form of currency or legal tender, adding a certain amount of historical significance to its age and minting. While the gold content of the coin is valuable, many coin collectors will acquire them based on the year, country of origin, or historical context. In fact, many gold coins traded among enthusiasts and collected today were once accepted forms of currency circulated throughout the country. While it would take a strong power of clairvoyance to know the future of any investment, gold as a precious metal is a solid bet.
What are the advantages of gold bars?
Before starting your own investments into the different gold forms, it’s best to know the pros and cons of both gold bars versus gold coins. In the case of gold bars, the concept that their weight and purity are inscribed into the metal itself acts as a solid indicator of its “identity” and, therefore, its value. If you’re looking to invest in gold merely for the value of the metal itself, this element of shopping for gold bars may prove the best reason to choose them over coins. With the bar’s chief identifiers already displayed on the metal’s surface, you can easily keep track of its value within the gold market.
Although gold bars can come in a variety of sizes, their content is usually made up of 99.99 pure gold, making their intrinsic value particularly high. As far as the size fluctuation goes, gold bars can measure as small as 1 gram to as large as 1 kilogram, allowing potential investors to measure precisely where their money is going literally. As gold is a universal form of collectible investment, it is available from reputable markets nearly everywhere. A gold investor in New York or Florida would be able to buy gold in Tucson or California and never see a depreciation based on geography.
What are the advantages of gold coins?
Like gold bars, gold coins can be traded and sold for their basic metallic content value. Unlike bars, however, gold coins have an additional appeal to collectors for their historical value. Many people who opt to invest in gold coins are looking beyond the potential rise in the value of the gold content and the significance of the coin’s own history and previous function as a form of currency in world events. While investors may trade or sell their gold bars when the market dictates a good profit, coin collectors will choose to hold onto their gold pieces if they are integral to completing a larger set.
Just as gold bars have their provenance minted on the metal’s surface, gold coins can be traced and authenticated thanks to the annual series minted on the front. While that detail doesn’t necessarily dictate the coin’s gold content, it does offer an investor a solid understanding of its age.