One of the questions we hear regularly, particularly from investors who are new in the gold business is one touching on the worth of a gold bar. In a bid to answer this question comprehensively, we will explore all the factors that directly affect the value of a gold bar.
Gold bars can’t have the same value
Before we begin, it is worth noting that all gold bars cannot cost the same. Even those that have similar weight and size may not necessarily have the same value. Also, worth noting is that the price of gold bars keeps changing each day that markets are open in accordance with the gold spot price.
Factors that determine the value of a gold bar
1) Current spot price of gold
Since the gold bar is just a piece of precious metal, it makes sense for the going price of gold to determine its value. The gold spot price tells buyers about the market’s dollar value of one troy ounce of pure gold. Visitors to our site can always see the latest spot price at the top left-hand side of our web pages.
It is important to keep in mind that the gold spot price varies from minute to minute when the market is open, and also after hours in the Asian markets. After knowing the latest spot price of gold, you should then proceed with the following steps to know the value of a gold bar.
2) Weight and purity
After knowing the current price of gold, you should proceed to know more about the
purity and weight of the gold bar. Typically, manufacturers stamp purity and weight details somewhere on the gold bar – either at the back or on the front.
For the most part, gold bars are either .9999 or .999 pure albeit some brands may be .995 pure. If a buyer comes across a gold bar devoid of this information, it might not be real gold. Copper and bronze are common alloy metals that resemble gold in appearance. On the other hand, gold bars weigh dramatically from about one gram to 1 kilogram. So, the size may affect the pricing as well.
3) Gold bar melt value
After obtaining the information about the purity and gold spot price, buyers should take gold bar’s weight (in troy ounces) and multiply that by the purity. The result will be the bar’s total pure-gold weight. After that, multiply the result by the gold’s spot price.
For example, if the gold bar weighs 10 grams (or 0.321507 troy ounces), and the gold spot price is $1250 with the purity of .9999, the gold bar value will be:[0.321507 x .9999] x $1250 = $401.84
Therefore, in this case, the value of pure gold in the 10-gram gold bar is $353.62. This doesn’t include the premium, which is the cost above the melt value that the gold bar might sell for.
A premium refers to the price added to the melt value of the gold bar. Calculation of the premium depends on many factors. Often, the demand and cost of production are the main reasons a gold bar may sell high and above the spot price. Premiums may vary depending on the gold bar’s weight, manufacturer or condition. It is usually indicated as a dollar value or percentage. Typically, as the gold bar’s weight increases, the premium will reduce.
Buy Gold Bars directly from us
Now that you know how to determine the value of a gold bar, why not contact us to buy gold bars of the weight you want? You can call us on 020 7060 9992 or send us an email through our contact page, and we will be glad to serve you.