Are you looking to invest in gold but aren’t sure whether to go for gold bars or gold coins?
This is a common dilemma faced by many investors who are just starting out. Gold has proven, over centuries, to be a pretty stable and sound investment. It is an especially great choice during turbulent times when stocks and the currency are particularly volatile. So, it makes sense for smart investors to add it to their portfolio for risk mitigation and diversification.
However, deciding between gold bars and gold coins can be tricky as both have their pros and cons. In this article, we’ll weigh the advantages and disadvantages of each option to help you make an informed decision.
So, whether you’re a seasoned investor or a beginner, read on as we provide you with valuable insights to help you determine which option is best suited to your investment goals.
Gold Bars: An Overview
Gold bars, also known as gold bullions or gold ingots, are rectangular blocks of gold minted by designated government-approved and private gold mints. Gold bars have no face or historical value and are solely manufactured for investing.
Advantages of Gold Bars
Why invest in gold bars?
- Standard in gold investing, and consequently, is accepted everywhere.
- Multiple sizes; you can go for something from a 1g gold bar to as much as 1 kg bar.
- More affordable to manufacture and, therefore, cheaper to purchase.
- Faster and easier to acquire.
Disadvantages of Gold Bars
While gold bars come with wonderful advantages, large bars, for instance, a 1-kilogram bar, can be a disadvantage when you decide to re-adjust your portfolio. You would have to sell the entire bar and then purchase a smaller volume.
Gold Coins: An Overview
Gold coins are premium tangible assets designed in coin form by a government-approved mint. Often, they are stamped with a legal tender face value on the obverse or reverse sides. Gold coins come in different sizes and are measured in troy ounces.
Advantages of Gold Coins
Gold coins have several advantages that make them a popular investment. Some of these are:
- Versatile, available in many sizes, grades, rarity, and designs.
- High flexibility, allowing you to split your investment into smaller parts.
- High liquidity because they are universally recognized.
- Some gold coins have numismatic potential.
- Gold coins can be passed to others as gifts.
Disadvantages of Gold Coins
Though gold coins have some really great advantages, they also fall short in some areas. Coins are typically expensive compared to bars for the same amount of gold. Gold coins are easier to lose or spend. Not forgetting, coins can be cumbersome if you intend to put a lot of money buy silver coins online.
Gold bars vs. gold coins: Which is the right pick for you?
Gold bars can make for a better investment than gold coins. With a gold bar, you get more ounces for less money than coins, which you want to consider if you are to make good returns. Gold bars also offer more flexibility; you can invest in smaller bars at the beginning or higher volume bars with a bigger budget. These, among other features, make gold bars ideal for investors of all skill levels.
Diversify Your Investment Portfolio
While gold bars and gold coins have their own advantages and limitations, bars are often preferred by investors with a long-term outlook. They are an excellent way to hedge your investment, spread risk, and diversify your portfolio. Most of all, smaller bars (one ounce if possible) are more flexible, allowing you to trade easily.