Reduce Your Dealer Premiums … Purchase Gold Bullion Bars

Generally, gold bullion bars are a more cost-effective choice than
gold bullion coins. Gold bars can be an excellent option, especially if you …

  • Want to buy a lot of gold bullion at one time.
  • Have considered additional gold storage issues
    (i.e. security, costs).

Gold Bullion Bars

I mention this last point since larger gold bars/ingots usually require a little more planning.

  One ounce minted gold bars are a  
  common size and easy to store
  (see photo on left).

My purpose is to give you a balanced report that includes both the good and the bad about buying gold bullion bars.

Continuing on, gold bars may be a good fit if you …

  • Know larger bars limit your ability to sell small amounts of gold.
  • Have faith in the gold authenticity of the gold bars you are buying.
  • Know it may take longer to sell your gold bars/ingots.
  • Understand gold bars, unlike most government-minted coins, are not legal tender and may be taxed upon entering some countries.

  Like coins, smaller gold bars are minted from solid pieces of gold.
  Gold ingots are made using a casting process since minting larger bars  
  is not practical. Ingots are formed by pouring liquid gold into molds.

Market Size

More people buy coins than bars. Since the gold bar market is smaller, bars may take a little more time to sell. This may be especially true with the larger gold bars/ingots (one kilo gold ingots pictured below).

Gold Ingots

Real estate is a good analogy. For example a piece of land that is worth a million dollars has fewer potential buyers than a $100k parcel of land in the same area.

Therefore, the expensive land will likely take longer to sell than the cheaper property.

However, like anything else for sale - if demand outstrips supply - it should be relatively easy to sell your gold bars. It's really a matter of market timing.

Examples of commonly-traded gold bullion bars include:

Credit Suisse Gold BarsJohnson Matthey Gold BarPamp Suisse Gold BarJohnson Matthey Gold BarsCredit Suisse Gold Ingots

Assortment of Gold Bars and Gold Ingots

Gold Bar Prices

Gold bar prices are largely linked to the spot gold price or gold spot price (both phrases are used) for one troy ounce of gold.

Your purchase price will be a little higher than the spot gold price. Please click here to learn how current gold bullion prices are determined.

Cheaper By The Ounce

When you purchase gold bullion bars you are consolidating your gold. So it’s logical that consolidation brings greater efficiencies … and greater efficiencies generally result in lower prices.

Gold bars also have fewer details (i.e. lettering, art) than coins which result in lower production costs for bars.Gold Bars and Gold Coins

If you compare the premiums - purchase price minus the spot gold price – gold bars are usually cheaper per ounce than gold coins.

Just as four ¼ oz American Eagle Gold Coins usually cost more than a single
1 oz American Eagle Gold Coin -- smaller gold bars cost more per ounce than larger bars/ingots.

Fake Gold Bars

Hopefully fake gold bars are very rare. Nevertheless it’s prudent to take reasonable steps to reduce your risks as much as possible.

It’s the assayer's job to test gold samples submitted by a refiner and certify the gold purity/weight claims made by that manufacturer.

There are different opinions regarding the need for assay certificates when purchasing gold bullion bars.

Some believe you should only concern yourself with the assay mark and/or registered logo stamped on a gold bar as proof it’s authentic.

The underlying thought is a paper document is much easier to counterfeit than a gold bar with credible stamps. Therefore, you are wasting your money if you pay extra for a gold bar with an assay certificate.

I believe sealed packages, serial numbers and assay certificates are all reasonable measures that further assure authenticity.

Yes, a piece of paper is much easier to counterfeit than a gold bar. But it’s one more thing the counterfeiter has to fake. And a belt-and-suspenders approach is not always a bad thing.

The Perth Mint does not serialize its gold bars (except 1 kg. & 400 oz.).

However, the Perth Mint logo is a detailed image of a swan, and is difficult to counterfeit … especially on a gold bar. As pictured above, its small gold bars leave the refinery in sealed plastic packages with assay cards.

Credit Suisse Gold Bar w/AssayPamp Suisse Gold Bars w/Assay

The real question, which only you can answer, is "how much is an assay certificate worth to you?"

Regardless of your position on the assay certificate issue, it’s wise to purchase gold products exclusively
from reputable gold bullion dealers.

If in doubt, you can weigh and measure each gold bullion bar to make certain the refiner's specifications are met.

Performing a gold specific gravity test is another way to validate your gold bar's fineness.

Please view the video below to see how a specific gravity test of gold or silver is performed. The specific gravities of pure gold and pure silver are 19.32 and 10.49 respectively.

A 1oz. silver bar was used in the video. Also the scale in the video was only precise to .1 gram. A scale that measures to the .01 gram is recommended since it will produce a more exact measurement.

Benefits of Gold Bullion Bars

In the spirit of balance, let’s revisit the big benefits of gold bullion bars -- saving money and holding your wealth.

Premiums can really add up … especially on large purchases.

Credit Suisse Gold Ingots

Take a moment and do the math before you make a purchase. The amount saved may surprise you.

These are the advantages and disadvantages of buying gold bullion bars as I see them. I hope this page has been helpful to you.

Please choose a link from my navigation bar (upper left) to learn more about precious metals.

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