Gold is synonymous with value – high value. Today, gold’s value relative to world currencies is stronger than ever. Gold bullion as an investment vehicle is gaining traction widely across diverse demographics. Furthermore, sovereign nations have returned to appreciating gold bullion as a strategic asset for sovereign wealth, power, and fiscal prudence. All this spells a bright future for gold as an investment. This piece explains why an investor might choose a 1 oz gold bar versus a 1 oz gold coin.
The convenient and precise one-troy-ounce investment piece was popularized by the South African Mint in 1967 with the introduction of the gold Krugerrand. Since that pioneering gold investment issue, 1 oz legal-tender gold coins have been the most popular precious metal category for the average investor. However, the 1 oz gold bar, often referred to as a gold ingot, is gaining rapid acceptance and popularity. One undeniable factor is that gold bullion bars are simply really cool to have.
Although 10 oz and kilo (32.15 oz) bars are efficient to produce and often carry lower premiums, appreciation over the last 20 years has made them a budgetary obstacle for many investors. Higher prices have favored one-ounce gold bars as an exciting alternative to coins.
Gold coins are perceived as money, and rightly so. For a medium of exchange, you cannot improve on the 2,000-year track record of gold coinage struck and issued by a consistent, reliable, longstanding mint. Government-minted gold coinage has consistent dimensions and weight specifications, making verification of gold content practical. This precise standardization preserves value in physical exchange. Furthermore, gold is malleable, and the minting press operates with ultra high pressure using intricately engraved striking dies, so the details on the obverse, reverse, and edges make counterfeiting impracticable. For exchange, whether in a barter transaction or when selling a physical gold investment, coins have the advantage when you take personal possession.
Gold bars are perceived as a symbol of conspicuous wealth, power, and prestige. As a result, gold bars have gained significant popularity due to their appeal to demographics, competitive pricing, and prestige. Today’s younger demographic of gold investors favors bullion bars; they make a statement, look like a deal, are in vogue, and are, frankly, not your dad’s Krugerrands. Today’s shorter-term investors favor a deal, not just long-term wealth preservation and crisis insurance.
Retail distribution now includes big box sellers. Costco 1 oz gold bars have helped popularize assay card packaging for bars. Many retailers also accept credit cards for 1 oz bar purchases, and buyers earning points or cash back have added momentum to bar buying and to the appeal of assay card packaging, even though cards are a practically worthless security measure compared to the intricate striking details on gold coinage. The sealed card lists fineness and a serial number, which gives bars a presentation some buyers view as comparable to the detailed mint engraving seen on coins. As long as the price per ounce of gold bullion bars is measurably below coins, bars are best for investors seeking the most gold for their hard-earned dollars.
For a medium of exchange, whether for barter transactions or financial crisis comfort, coins are best. However, if you can find bullion bars at a measurably lower per ounce cost, bars are the way to go for you and most investors today.
Compare 1 oz gold bars and 1 oz gold coins, including a wide selection of IRA-eligible gold products. For further guidance and purchase assistance, call Monex to speak with a knowledgeable Account Representative.
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