What are the advantages of buying 10 gram gold bars?
15/10/2024Daniel Fisher
A huge amount of choice exists when deciding which type of physical gold to buy. Do you opt for gold coins or gold bars? Is it better to purchase large or small pieces of gold?
We explore why buying small gold bars can be a smart investment choice, diving into the key benefits, including their affordability, ease of trade, and how they make great gifts.
Whether you’re looking to invest regularly or simply want a portable and valuable asset, pocket-size gold wafers offer a practical solution.
Divisibility
One of the major advantages of buying little gold bars is the flexibility it adds to a portfolio. Since these bars are smaller in size, they offer more flexibility when it comes to selling or liquidating a portion of your gold holdings. Larger bars, such as 1-kilogram or 100-gram bars, may require you to sell the entire bar if you want to access funds. With smaller denominated bars such as 5-gram, 10 gram, and 20 gram, however, you can sell just a few bars at a time, depending on how much cash you need.
This divisibility also makes it easier to respond to market conditions. If gold prices spike and you want to take advantage of that, selling a smaller portion rather than a large, expensive bar allows you to make more precise financial decisions. In short, miniature gold bars give you greater control over your gold investment, providing liquidity without the need to commit large amounts of your portfolio at once.
Affordability
The perception of owning gold bars is that buyers need to be super wealthy to get involved. While the gold bars seen in films weigh a whopping 12.5 kilo in weight, much smaller bullion bars are obtainable for retail investors.
Bars as small as 1 gram in weight are widely available to offer accessibility to the gold market for the masses. This means there’s no need to wait to accumulate enough savings to afford a large gold bar with far more budget-friendly denominations offered.
These more affordable bars are suitable for investors who want to invest in gold without committing large amounts of money at once. Buyers may wish to test the water with the gold market or even with a new gold dealer, rather than take a huge leap of faith with a large capital investment.
It’s important to understand however, that while the actual price of tiny gold bars is comparatively low, the gold premium paid is far higher. This relates to the percentage added on top of the gold spot price for individual products such as bars or coins. Generally speaking, the smaller the piece of gold, the higher the mark-up.
Ideal for Regular Investing
For investors looking to steadily grow their gold holdings over time, gold bars weighing less than one ounce are ideal for regular investing. Their smaller size and affordability make them perfect for those who want to invest in gold consistently without needing to make a large, one-time purchase.
With small bars, you can take advantage of a strategy known as Dollar-Cost Averaging. This involves buying a fixed amount of gold at regular intervals, regardless of market fluctuations. By purchasing gold bars at different prices over time, you reduce the risk of making a large purchase when prices are high, ultimately averaging out the cost of your investment.
Regularly investing in 10-gram bars is a practical way to accumulate wealth gradually while maintaining flexibility. You can adjust the amount you invest based on your financial situation, making it easier to stay committed to your investment goals. This steady accumulation of gold not only builds your portfolio but also strengthens your financial security over the long term.
Diversification
One of the most compelling reasons to invest in smaller sized gold bars is for variation. Diversifying your portfolio is a well-known strategy to manage risk, and gold plays a critical role as a stable asset that can balance more volatile investments like stocks or cryptocurrencies.
Little bars allow you to diversify within your gold holdings as well. Instead of investing just in gold coins or in a single large bar, owning multiple smaller bars spreads out your investment. This offers more flexibility if you need to sell a portion of your gold while leaving the rest untouched. Owning just one type of gold could restrict your liquidity. For example, trying to sell an Asian coin such as a Chinese Panda in Europe may not yield the best price, similarly with Austrian Philharmonics in the US. Including some petite 24-carat gold bars in your portfolio, ensures you can sell the most desirable gold when you need.
By incorporating 5,10, or 20-gram gold bars into your portfolio, you’re not only adding physical gold to your investment mix but also gaining a flexible, divisible asset that enhances your overall financial resilience. This diversification helps smooth out risks and ensures that your wealth is better protected across a range of economic conditions.
Insider's Tips to Buying & Selling Gold & Silver Tax Efficiently
Free ultimate guide for keen precious metals investor
Portability and Storability
One of the most practical advantages of buying little gold bars is that they take up less space, meaning they’re easier to move around and store. These smaller bars are easy to transport, making them a convenient option for anyone who values mobility and flexibility with their investments. Whether you need to move them between storage locations or travel with them, their compact size makes the process hassle-free.
In terms of storability, 5 and 10-gram bars are convenient for both home storage and bank vaults. They take up minimal space, allowing you to store a significant amount of wealth in a small area. Note though, that the plastic that many of these bars comes in does add bulk and storage space requirements. The dimensions of the rectangular laminated pack is usually the same size for all bars from 1g up to 100g.
For individuals who prefer to keep their gold in hand, storing several 10-gram bars in a secure home safe is far easier and more discreet than managing larger gold bars or other bulky assets. Even in a bank safety deposit box, you can hold multiple bars without worrying about space constraints.
Liquidity
One of the key benefits of owning miniature gold bars is their ease of re-selling. Liquidity refers to how easily an asset can be converted into cash, and smaller gold bars like the 20-gram size are highly liquid due to their broad market demand. Because they are more affordable and divisible than larger bars, they are easier to sell when you need access to funds quickly.
These bars consist of 24 karat gold and sell at a price based on the underlying gold spot price. Unlike selling collectable coins, there’s no need to identify buyers with niche demand to obtain a fair price. Whether you’re selling to local gold dealers, through online platforms, or in international markets, small bars are affordable and simple enough to appeal to a wide range of buyers, from individuals to larger investors. This makes them one of the most flexible forms of gold to own.
Small Enough to Barter With
Many people buy physical gold as they feel threatened by the depreciation of fiat currency. Inflation has eroded the value of paper currency to such an extent that investors are seeking gold as a possible medium of exchange as it tends to be more inflation-proof. Tiny gold bars are an ideal size for bartering because they’re valuable enough to represent significant purchasing power but still small enough to be exchanged for everyday goods and services.
Unlike larger gold bars, which may be too cumbersome or too valuable for practical transactions, little bars weighing 1 to 5 grams strike the right balance. Their modest size makes them suitable for a variety of barter situations, from trading for essentials like food or fuel to more significant purchases. Additionally, they are easy to carry, store, and divide if necessary, making them a convenient asset in times of financial instability.
For those who want to prepare for potential future scenarios where bartering may be necessary, small gold bars provide a practical solution. They offer tangible, portable wealth that can be quickly used in exchange for goods, helping to safeguard your financial security in unpredictable times.
Possible Tax Efficiency
In the UK, all investment-grade gold is VAT exempt but gold bars unfortunately do attract Capital Gains Tax (CGT). That means that if you buy a gold bar and make a profit when you sell, there could be CGT to pay on that gain. With larger bars, there’s no legal way around this. However with careful planning, buying and selling smaller bars can be tax-free.
That’s down to the annual CGT tax-free allowance. As of 2024, each individual is able to generate gains of up to £3,000 per tax year without incurring CGT. That means the lower values of smaller bars will create less profit per bar than bigger bars. Selling some of these bars before the tax year end of 5 April and more after can spread profits across two years sufficiently to fall within the allowance.
For example, let’s say an investor buys 1 x 100g gold bar costing £6,000 and the gold price more than doubles, allowing them to sell at £12,000. Clearly under the rules, this would incur tax. However, if the same investor had instead bought 10 x 10g gold bars, then the profit on each is a tenth that of the 100g bar. This allows the strategic selling to ensure tax efficiency.
Easier to Buy
Being of lower value, compact gold bars can also be easier to purchase for a number of reasons.
Unlike larger purchases that may require extensive documentation and verification due to regulations, miniature gold bars often fall below the reporting threshold, allowing you to buy gold bars privately and discreetly. In the UK purchases valued at £10,000 or more will require ID checks, or multiple transactions within one year totalling that amount.
The relatively low price of 5g and 10g gold bars falls way below this threshold, making them especially attractive for those who value privacy in their financial transactions. Since these smaller bars don’t typically trigger anti-money laundering (AML) or “know your customer” (KYC) requirements, they offer a way to invest in gold without needing to provide personal details or undergo lengthy procedures.
Additionally, most gold dealers may offer a number of payment methods to its customers, but each may have a value limit. For instance, at Physical Gold, we allow credit card transactions up to £10,000, debit card up to £30k, and an unlimited amount with bank transfer. With the low cost of little bars, buyers are able to have their choice of payment methods. Many opt to use a credit card to obtain the extra buyer protection these cards provide.
Peace of Mind
When you invest in small gold bars like the range from Metalor, you also gain an important sense of reassurance thanks to the protective features that come with these bars. Most new gold bars below 100g in weight are sealed in laminated packaging, which helps prevent damage from handling or exposure to the elements. This secure packaging ensures that your gold remains in pristine condition, protecting its value over time.
Additionally, many smaller bullion bars come with a unique serial number stamped on the bar which matches that of the accompanying certificate of authenticity. This certification guarantees the purity and weight of the gold, offering extra comfort that you’re buying a legitimate product. The serial number helps you track and verify your investment, which is particularly useful if you ever decide to sell the bar. Knowing that each bar is individually registered and certified gives investors confidence that their gold is protected against fraud or counterfeit products
Perfect Gifts
Small gold bars also make wonderful gifts for special occasions such as birthdays, weddings, anniversaries, graduations, or other significant milestones. Buying gold as a present can be a thoughtful, considered choice, and one that can spur youngsters into the mindset of investing for their future. Unlike other gifts that may lose their value over time, gold retains its worth and can even appreciate, making it a lasting symbol of wealth and good fortune.
Gifting a 5-gram gold bar is not only a way to celebrate an important event, but it’s also a way to provide the recipient with a tangible investment. Gold is always appreciated by the recipient, as it’s revered across many cultures. Smaller gold bars are small yet valuable, striking the perfect balance between practicality and luxury.
The fact that these bars often come in elegant, tamper-proof packaging adds an extra layer of presentation, making them ideal for gifting. This contrasts significantly with most bullion gold coins which simply come without any packaging or certification. Whether for a loved one or as a corporate gift, a gold bar is a gesture that communicates both value and sentiment.
FAQs
Is it worth buying small gold bars?
Yes, buying small gold bars can be worth it for investors seeking affordability, flexibility, and ease of storage. Smaller bars, like 1g or 10g, are easier to sell in portions, accessible to more buyers, and offer a practical way to diversify. While premiums may be higher, their liquidity and portability provide long-term value during economic fluctuations.
Is buying small amounts of gold worth it?
Yes, buying small amounts of gold is worth it for diversifying investments, protecting against inflation, and offering liquidity. Smaller gold purchases allow you to invest gradually, making it accessible for any budget. While premiums may be slightly higher, the flexibility, portability, and stability of gold make even small investments a valuable addition to your portfolio.
What size gold bars should I buy?
This all depends on your budget and objectives. Large budgets can be best used buying kilo gold bars to achieve the lowest possible premiums. For those wishing to have flexibility, 100g and 1oz bars offer a great balance between price and size. For those with smaller budgets, 10g and 20g bars are a great option, despite higher premiums.
Which gold bar is best for investment?
The best gold bar for investment depends on your budget and goals. For low premiums, kilo bars are ideal. For flexibility and liquidity, 1 oz and 100g bars offer a good balance of value and ease of sale. Smaller bars, like 10g or 20g, suit those looking for affordability and regular investing, despite slightly higher premiums.
Share this post on:
Latest Posts: