Guide to Buying and Selling Bullion: Tips and Strategies
July 23, 2024
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August 29, 2024What are Gold Bars? (2025 Overview)
Introduction
Investments in gold bars are becoming popular nowadays because of uncertainties in the security market and stock and bond prices. You can protect your wealth by buying gold bars which diversify your portfolio and help you mitigate the risks of an uncertain market.
But if you’re confused with gold bars and gold bullion, gold bars and gold coins, then here is the answer. We discuss in this blog what gold bars are, the difference between gold bars and gold bullion, which is better gold bars or gold coins, and if you want to buy gold bars then where and how to buy them. In short, everything you need to know about gold bars is included in this blog.
What are gold bars?
A gold bar is a solid block of gold with at least 99.5% purity. They come in various weights and sizes, each with its own set of advantages and disadvantages, to suit the preferences of any investor.
Government mints and private refineries produce gold bars. Smaller gold bars are minted using machinery, while larger gold bars are made by pouring molten gold into a mold.
Where are gold bars used?
Gold bars are versatile and can be used in different ways, such as:
- Large companies may consider including gold bars in their financial portfolios to potentially secure a lower rate.
- People have always been drawn to gold because of its beauty and value. Nowadays, gold bars are mainly used as a long-term store of value and to attain financial stability.
- Gold is not commonly used as a form of currency. It is currently used as a reserve currency for international trade and to stabilize currency value.
What is investment-grade gold?
Investment-grade gold is pure gold having a purity of 99.5%. It is also known as gold bullion and can be found in bars or coins. The value of gold bullion coins is determined by the spot price of gold and a premium to cover production costs.
The seller's fees also reflect the imbalance between market demand for specific bars or coins. Investment-grade gold is the only type of gold considered an investment and is held by banks, governments, and private investors.
What is the key difference between gold bars and gold bullion?
Gold bars are rectangular blocks of pure gold with purity of 995.0 or higher. They are gold ingots and come in various sizes and weights. They are produced by private and government mints and mainly used for investments.
On the other hand, gold bullion is valued based on purity and weight rather than face value or artistic merit and comes in the form of bars, coins, or rounds with a purity ranging from 99.50 to 99.99 recognized by authority and the market.
So, in a way, gold bars can be subsets of gold bullion. Therefore, a gold bar can be a gold bullion, but a gold bullion is not always in the form of a gold bar.
How to Recognize Gold Bullion Bars?
You can easily recognize gold bullion bars. Most of them have similar features like specific shape, weight, and purity. They also have the name and logo of the mint or refinery, and larger bars need to have a serial number.
These measures are in place to prevent imitation and prove authenticity. All mint and treatment facilities follow strict rules, allowing their gold bars to be easily traded worldwide.
At Shree Ambica Touch, we provide gold bars that ensure legitimacy, competitive pricing, and liquidity.
What is the weight of a gold bar?
Gold bars are available in various weights, such as 1 oz (about 28.35 g), 100g (about 3.53 oz), 250g (about 8.82 oz), 10 oz (about 283.5 g), 500g (about 16.07 oz), 1 kilo, 100 oz (about 2.83 kg), and 400 oz (London Good Delivery Bars).
London Good Delivery bars are the most popular type of gold bullion bars. They weigh 400 oz (about 11.34 kg) each and are traded by investors, banks, and governments.
Bars usually display a unique serial number, the mint, or facility's name and logo, and their purity level.
Although gold bars are less common than gold coins, buying them is a convenient way to invest in physical gold, especially for investors, businesses, and institutions looking to make large-scale investments in high-quality gold.
What is the value of a gold bar?
The value of gold bars depends on the current value of gold which is everchanging. You need to keep an eye on its current market price.
Which factors affect the value of a gold bar?
Here are top four factors affecting value of gold bar:
1. Gold Spot Price
This is the price at which 400 oz (about 11.34 kg) gold bars (London Good Delivery Bars) are traded between banks in international markets. Typically, private investors pay a premium above the spot price. Gold bars are easier and cheaper to produce, which is why they usually have a smaller premium compared to gold coins, and gold dealers generally charge lower fees for larger bars.
2. Gold Purity
According to the London Good Delivery List from the London Bullion Market Association (LBMA), investment-grade gold bars must have a minimum fineness of 995.0 parts of pure gold per thousand. Therefore, the greater the purity of gold, the greater the worth of the gold bullion bar.
3. Investor Demand
The best bars are in high demand and can fetch a higher price. Market fluctuations can affect the prices at which gold bars are traded.
4. Gold Weight
Gold bar weight is one of the top factors affecting its value. The heavier it is, the more valuable it becomes.
Generally, you can easily calculate the actual value of a gold bar by multiplying the current gold spot price by the weight of the pure gold content.
Is investing in gold bars a good choice?
Gold provides a sense of financial security in times of instability compared to other investments. Unlike stocks and bonds, gold tends to increase in value during economic hardships and turmoil, such as inflation or currency crises. Indeed, during financial uncertainty, the value of gold tends to rise significantly.
For instance, in 2020’s global pandemic, the value of gold skyrocketed and reached a record high. Even at the start of the Russian invasion of Ukraine, gold was also greatly appreciated. This demonstrates that gold's value can perform, at least during times of crisis, when other assets tend to underperform.
Is It Worth Purchasing Small 1g Gold Bars?
Smaller gold bars, such as 1g bars, are not a smart investment for most people because of high fees. It is better to buy larger bars since gold dealers charge a lower premium for them.
Additionally, storing 1g gold bars in a professional vault would be costly, but using specialized secure vaults in safe jurisdictions is the best option for larger bars.
Where to Purchase Gold Bars?
You can buy gold bars by visiting jewelry store near you or you can buy it online via online stores or in the form of digital gold from payment apps such as Paytm and PhonePe. However, consider the reliability and authenticity of a gold merchant before making purchases.
Conclusion
Thus, gold bars are a popular option for owning gold in hand as an investment. If you’re ready to purchase gold bars or want to know more about gold bars, then contact us.
At Shree Ambica Touch, we provide services for gold refining, gold bar minting, and gold assaying. Our team of experts is here to assist you with your gold requirements.
