You don’t have to have too much experience in the investment industry to know that gold is one of the safest bets you can make. Whether you want to have something in your portfolio that can help it hold a base value or are just starting to invest and don’t want to take too many risks until you get more comfortable at reading the market, gold is always a good choice. However, what’s the best way to buy gold is another question entirely. The most popular options out there are gold coins and gold bars, and it’s important to look at the different factors that make both of these good choices in order to see how they compare. That way, you’ll be able to make an informed decision and get the most bang for your investment buck.
1. Stability
As already mentioned, gold is a pretty stable investment in general. However, within that category, we can still find two kinds of stability: the kind that gold bars and gold coins share, and the kind each one has on its own. Gold in general is often seen as a safe haven for investors because it retains value and tends to increase when other assets fall. During times of inflation, wars, and political and economical change, people tend to invest in gold more, and its price can even skyrocket. That’s what gives it this overall stability, and there’s not much difference in which you decide to buy during the good times. When the value of gold drops, on the other hand, it’s important to note that the most valuable gold coins tend to be worth more than gold bars. The reason for this is that they’re often seen as more than just another shape of the precious metal. They have a collector’s value that gold bars don’t have, so the same amount of gold in a coin is often worth more than in a bar – provided it’s measured in the same purity.
2. Historical Importance
When you’re buying gold as an investment, there’s a whole other kind of value that comes into play: the historical importance of each piece. While gold is relatively rare in general, there are coins – gold and otherwise – that carry historical importance with them, something that a gold bar simply doesn’t have. Of course, gold has historically been a symbol of wealth, and coins used to be a more common way to carry it around than bars. For that reason, there are some countries in which gold coins retain their historical importance even today. If you live in one of those places or travel there often, having the opportunity to buy gold in this form is definitely worth considering. Obviously, cultural and historical importance plays a part in its price. That said, there’s no denying that gold bars have their own kind of charm. Since they were the first shape of gold investment in human history, there’s something attractive about them. This is still an important factor to consider when you’re thinking about which one you should buy, and how it will affect your decision.
3. Transferability
The final factor you should take into consideration when buying gold coins or gold bars is their transferability, or how easy it is to turn your investment into cash. Gold bars are very easy to sell because there are so many buyers out there that buy them off wholesale dealers. Coins have slightly lower ease of sale because they’re not as commonly traded as bars are. The reason for that is that the people that buy gold coins are usually those that are aware of their broader value – other than just their measure in gold, which isn’t as big of a market. However, given the opportunities of international trade that are pretty easily available nowadays thanks to technological advancements, the transferability of gold coins isn’t as big of an issue as it once was, so you shouldn’t worry too much about this aspect. When it comes to how easy they are to be transferred to future generations, gold bars are a good bet – however, there will be taxes involved as with any other asset, and you should take that into consideration as well. Gold coins, on the other hand, aren’t usually as visible, so no one even has to know that your family has them unless you decide to sell them to someone else.
4. Investment Potential
When you’re buying gold, there’s also the investment potential of your pieces to consider. In general, gold bars are a good way to hedge your bets against inflation and portfolio fluctuations. In other words, they’re a good investment during times of stability as well as turmoil. That said, unless you can invest in a fair amount, there’s not much you can do with it other than sell it back for cash once you decide it’s time to do so because you simply cannot compete with governments and large banks when it comes to buying in bulk. Collectible coins, on the other hand, have a greater potential for investment because they can increase in value if their popularity does too. Not only that, but they can be a way to invest not just in gold, but in a business as well. While you would be far from the first person to buy a gold coin for that purpose, it’s much easier to gain enough of them to become one of the top buyers and sellers since the competition isn’t as steep.
5. Availability
When it comes to availability, gold bars are definitely the way to go. There’s simply a larger variety of them available, which gives you more choices. However, coins have their variety as well these days, so whether or not this is a factor for you depends on what kind of coin you’re looking to buy. The truth is that while bars have a broader variety, coins can be more unique and rare – especially if they were made in smaller quantities. It basically comes down to opportunity. Just like it won’t do you much good to buy a gold bar that’s not pure enough, buying irrelevant gold coins will do you no good either. It’s all about the quality of your investment – and this goes for both bars and coins. In that sense, it’s much easier to find a quality gold bar, so if you’re unable to currently find a gold coin you’re really interested in buying, a bar will be your best bet.
Both gold bars and gold coins are good investment options. It’s important to keep these five factors in mind when you’re buying so that you can determine which one will be the best for your situation. As a general rule, when you find a gold coin that has historical and cultural importance, there’s really no reason to hesitate. However, if you can’t find what you’re looking for on the market at the moment, gold bars could be your solution.
