Top 5 Gold Investment Tips for the Festive Season
September 1, 2024
How Global Events Impact the Price of Gold & Silver in India
September 15, 2024All About Gold Bullion: Definitions, Types, and Investment Opportunities
Introduction
Gold is regarded as the first choice investment option for investors in terms of secure investment. However, there are many types of gold investments, such as gold as a hedge, gold bonds, digital gold, etc. One of its types is Gold Bullion which is becoming popular as an investment opportunity.
In this blog, we’re discussing everything you need to know about gold bullion. Let’s know more about the types, benefits, and investment in gold bullion.
What is Gold Bullion
The term ‘bullion’ is defined as the purest form of precious metals. Gold bullion is the physical form of gold created primarily for investment purposes by investors who want diversification in their portfolios and to preserve their wealth in gold form.
Gold bullion can be classified as gold bars or gold coins. Despite being one of the investment types in the gold market, gold bullion in the form of gold coins and gold biscuits is mostly purchased by the public. People give gifts, celebrate festivals like Dhanteras and Akshay Trutiya and donate to religious places.
Definitions of Gold Bullion
Gold Bullion refers to physical gold containing 99.5% to 99.99% pure gold in the form of gold bars and gold coins. Its price is based on its weight, purity, and gold market value.
Gold bullion is a popular investment because of its stability in the market, traditional market value, and high returns on investment without getting affected by economic volatility.
Types of Gold Bullion
1. Gold Bullion Bars
Gold bullion bars, known as ingots, are rectangular bars of gold consisting of varied weights, usually from 1 gram to 12 kilograms. They are mostly composed based on their purity, weight, and stamped identification number. There are two types of gold bars as follows:
- Minted Gold Bars
Minted gold bars are cut down from one large gold sheet. The specific die is ready to punch the sheet into a specified size and a pre-decided weight of the blanks.
Thereafter, these blanks are processed in minting to create the required design and the information on each side of the bars. Now, the minted bars are sealed in a secured plastic wallet with the serial number and assayer information. Minted gold bars are popular among investors because of their perfection in finishing cuts and their safety from the plastic wallet.
- Cast Gold Bars
The process of making cast gold bars is different. The molten gold is set in the bar-shaped molds and then cooled down to make it solid. This process gives gold a more natural finish with a rounder shape.
Then gold bars are punched with the assayer name, weight, purity, and unique serial number. Cast gold bars have paper certificates, but they are not packed in a plastic wallet.
Most of the gold bullion makers prepare minted gold bars of 1 gram to 100 grams for retail investors. Whereas large ranges of 250 grams, 500 grams, 1 kilogram, or higher are prepared as cast gold bars.
2. Gold Bullion Coins
Gold bullion coins serve as legal tender and are circulated by governments. However, their actual value is lower than their containing gold value, but they are still identified as extremely valuable metals because of their historical relevance, design, and rarity.
Gold Bars vs Gold Coins
Gold bars and gold coins both offer investment possibilities. Still, they are different in some ways.
Gold bars have lower prices than gold coins, making them a cost-effective choice for investors. You can acquire maximum gold at a lower price by purchasing and investing in gold bars.
However, gold coins contain their intrinsic value because of their visual appeal, rareness, and historical worth, and they are popular among investors and collectors who are interested in the aesthetic sense of gold.
Gold bars have more certification and identification compared to gold coins in the form of serial numbers. Investment beginners invest in gold bars because of their authenticity, whereas gold coins do not have such certificates and serial numbers.
Gold Bullion vs Silver Bullion
Gold bullion and silver bullion share similarities in their investment value and physical character, but they still have differences in their ways.
For instance, gold bullion consists of high return possibilities with the ever-evolving market value of gold, compared to silver.
Although, silver offers a diverse range of investments with a lower budget. Therefore, it’s a preferable choice for small investors.
How to invest in gold bullion?
There are many ways to invest in gold bullion. The three well-known options to invest in gold can be classified as follows:
1. Physical Form
You can buy gold in physical form. This gold bullion can be bought as gold bars, ingots, or coins. However, you need to keep this in a safe place, such as bank deposits.
2. Exchange Traded Funds (ETFs)
ETFs are currently a popular way to invest in gold without buying physical gold. The asset is paper gold or a gold certificate that is valued based on the market price of gold and is one of the good options for investors.
3. Futures Contract
The futures contract is a type of gold investment where an agreement is signed at a set price and date to be sold or bought.
Benefits of investing in gold bullion
1. Diversified
Gold bullion provides you with diversified investment opportunities. Gold bullion investment is different from stocks and bonds. Therefore, its price is not influenced by the factors that affect stocks, bonds, and other such investments. Rather, gold helps to cover the losses of these securities and balance your portfolio.
2. Tangible
Gold bullion is tangible and can be stored in your place, which gives you a sense of security and comfort to you. Physical gold bullion differs from the virtual securities of stocks and other virtual instruments, which is why investors can be stress-free in extreme economic uncertainties.
3. Value
The gold bullion has everlasting value. If you have physical gold, then you should not worry about its pricing value because gold is used for everything from ornaments to other purposes. Long-term investors prefer gold investments for better future returns and to maintain their portfolio’s value.
4. Liquidity
The gold can be sold at any time at the current market price and converted into cash. While your other investments can take days or months to be converted into cash.
Conclusion
Therefore, gold bullion presents an excellent alternative for investing, diversifying your investment portfolio, achieving high returns, and safeguarding your wealth without being impacted by market fluctuations.
However, before investing in the gold bullion, you need to do proper research and assess the market positions, and then you can purchase the bullion.
With this guide, if you’re more interested in investing in gold bullion, buying gold bars and gold coins, then you can contact us.
Shree Ambica Touch is a leading name in the precious metal industry. We have an online gold bullion platform to invest in gold bullion and are also the preferred choice of jewelers and customers in Gujarat and beyond for buying gold bars and gold coins.
