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In this video, we’ll explain 4 key considerations when buying gold bars, so you know exactly how to get the most from your purchase. We cover the Why, what, where and how of buying gold bars. Stick to these guidelines and you’ll source the best gold bars to meet your needs, at the lowest possible prices.
The best place to start is to ask yourself WHY buying gold bars may be the right choice for you. Let’s assume you already understand the myriad benefits that owning physical gold can bring – from inflation protection, a hedge against falling stock markets and a store of wealth during Brexit.
So why would you choose to buy gold bars rather than coins Well, the main reason investors choose gold bars is value. If you’re seeking the lowest cost of physical gold per gram, then gold bars can be the best choice.
Gold bars come in a range of weights and sizes, with the bigger retail bars coming in at a kilo in weight and the commercial bars weighing a whopping 400 ounces! Because bars are available in much bigger sizes than coins, the relative manufacturing cost is far lower, reducing the overall price per gram. Designs on coins are also more intricate, further increasing manufacturing cost versus gold bars.
Next up, I’ll tell you exactly how to choose the best bars to purchase. The ‘what’ can be split into bar size and bar brand.
While the price per gram reduces as the gold bar size increases, it doesn’t mean you should go out and buy the biggest bar you can afford. Agreed, buying a 1-kilo gold bar provides great value, but this choice can seriously hamper your divisibility. Owning one large gold bar means you can’t sell part of your portfolio…it’s all or nothing. A far better choice is to buy a number of smaller bars, providing flexibility to sell part of your holding at any time. While small bars are more expensive per gram, most dealers will offer discounts if you buy higher quantities of them. The amount you wish to invest and your overall cashflow will help you find the sweet spot between size and quantity.
So, how about the brand of the bar. Does it matter Generally speaking, the answer is no. Certain premium brands such as Pamp will sell their bars significantly higher than many other reputable brands. I’d avoid buying brands at the top end as you probably won’t receive a premium for them when you come to sell.
However, it is important that you ensure you buy brands that have the following 4 pieces of information stamped on them.
Purity – don’t buy less than 99.99%
And serial number
Private mints may not include these, so stick with well-known brands like Metalor, Heraeus and Umicore.
My TOP TIP – Some dealers also offer pre-owned gold bars. These may not be brand new but will be available at a discount to brand new bars. Don’t forget that you’re looking at gold content with bars, rather than anything else, so reducing your purchase price in this way will increase your profits.
With the increased value of larger gold bars, it’s no surprise that criminals target them to forge. Gold bars are easier to forge than intricately designed gold coins, usually by filling a thin outer shell of gold with cheaper material. So buying gold bars from a reliable source is crucial. The best source of gold bars is specialist gold dealers. But how do you know they’re reputable
The answer is, do your research, but there are 5 key indicators to look for;
The final part of the process is actually how you go about buying the gold bars. By far the most effective method these days is ordering online from the dealer you’ve chosen. There are several advantages to ordering this way.
So, they’re the 4 key considerations when buying gold bars. Once you’ve found a reputable dealer, don’t be afraid to ask for their guidance. They should be able to recommend which weight and quantity combination best suits your needs.
If you need your gold bars stored by professionals, most dealers will offer a vaulting service.
Ask if the storage includes insurance and whether your gold is ring-fenced (known as segregated).
If you’re ready to buy your gold bars online from us, simply shop here. If you have further questions, need guidance, or would like to discuss the merits of gold bars versus gold coins, then please get in contact. We can be reached by calling 020 7060 9992, through live chat on the website, or by contacting us here.
Don’t forget to check out our full suite of video guides.
Daniel Fisher formed physical Gold in 2008, after working in the financial industry for 20 years. He spent much of that time working within the new issue fixed income business at a top tier US bank. In this role, he traded a large book of fixed income securities, raised capital for some of the largest government, financial, and corporate institutions in the world and advised the leading global institutional investors. Daniel is CeFA registered and is a member of the Institute of Financial Planning.