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The Gold Show is for entertainment purposes only and not financial advice.

27th June 2021
Should I invest in gold bars or gold coins?

Deciding on whether to buy gold bullion in bars or coins is something that should be considered carefully.

There are a number of factors that you should be thinking about when making this decision including the value of your investment, the product premiums, where you plan to store it, how long you plan to keep it, whether you intend on selling it all at once or in smaller parts, capital gains tax.  You get the idea.

A little research can go a long way, and we suggest taking the time to thoroughly go through your plans and options before investing, as there is no right or wrong answer to which is better, bars or coins, without first knowing all of the above factors.

Premiums

Premiums are particularly important to consider in your decision to buy gold bullion bars or coins.

Premiums are additional costs that are charged above the gold spot price and are to cover manufacturing costs, handling, packaging, delivery, and insurance.  These costs are unavoidable and even dealers have to pay premiums above the spot price.

Most reputable dealers will charge investors minimum percentage premiums, however, in a bit to be competitive.

In the consideration of buying gold bars vs gold coins, investing in gold bars is the most effective way of minimising your premiums.  The same can be said for silver bars if you are looking to invest in silver bullion.

Let’s look at an example to see why this would be the case:

If you were wanting to buy 1 kilo of gold then your premium for one 1 kilo bar would be less than ten 100g coins as it requires less manufacturing to make the bar.

By buying gold as a bar instead of coins in this instance you would be looking at a saving of 1%, which, depending on how much you buy could be very significant.

Buying one bar, however, does mean that you have less flexibility when you decide you want to sell as you will have to sell the whole amount.  If you had ten coins instead then you could choose to sell half of your gold and keep the other half as an ongoing investment.

This is why it is so important to take the time and assess what you are wanting to do with your investment, how long you want to hold it, and how you might want to sell it at the other end.

Disclaimer: This is not financial advice.

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