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Gold has been a key store of wealth and a medium of exchange for thousands of years. It can now help you diversify your portfolio or provide a long-term investment that typically rises in value in inflationary environments.
Buying gold bars has been a popular and viable method of bulk physical gold investing that generally involves paying the lowest price per troy ounce compared to buying gold in any other form. Physical possession of your gold gives you the satisfaction of having complete control of your investment, especially if you keep your gold bars in a home safe.
Learn how to buy gold bars now. If you want to get a head start, you can try Augusta Precious Metals, a company that allows you to purchase gold and silver bullion, gold or silver coins and even set up a Gold IRA.
250 gram gold bar. Source Valcambi.
How to Buy Gold Bars
- Decide where to buy gold.
Before you buy your gold bars, make sure that you research which dealers specialize in selling gold bullion, and deal only with reputable dealers with lots of positive client comments. You may also want a dealer with a straightforward buyback policy and responsive support staff.
Make sure that any gold bars you purchase have a recognizable hallmark and the appropriate stamping. These features help assure that you’re buying an authentic gold bar. While some private mints also produce gold bars, many don’t include a hallmark or other markings, so you can’t be sure of the purity of such gold bars.
Remember these important factors when selecting a bullion dealer to buy gold bars:
• Reputation: A dealer’s reputation with its clients can be inferred by social media comments and reviews left at sites like Trustpilot. You’ll also want to check if the company has received awards or industry recognition for its services. Steer clear of dealers with numerous client complaints and companies that try to sell you overpriced gold products.
• Buyback policy: Reputable dealers tend to have a buyback policy for their clients. This ensures you have a buyer for your bars if you decide to sell. Dealers with a buyback policy also typically give their clients a decent resale price.
• Delivery: For bulk gold purchases, bullion dealers that offer a flat delivery rate would likely be your cheapest option. Bullion dealers will typically not ship gold to you until all payments have cleared, so that could increase the amount of time for delivery.
• Customer support: Bullion dealers generally have a toll-free telephone number and/or live chat option on their website. A good dealer will also have an order tracking and tracing service and will ship all gold with proper insurance. Support can be extremely important in case an issue arises with your order.
- Register with the gold retailer.
Since most U.S. banks that sell gold will only deal in federally minted bullion coins, the best places to buy gold bars are typically local and online bullion dealers. Other methods of acquiring gold bars include online eBay auctions and Gold-to-Go automatic teller machines (ATMs).
Such ATM gold vending machines can be found in cities like Dubai and Las Vegas, although make sure you know gold’s prevailing market value since these machines often charge a substantial premium over the spot bullion price.
- Select the gold alloy type.
If you want to purchase gold bars, you will generally want to invest only in 99.9% pure gold bars, rather than in any alloys where the gold is mixed with other metals. Once you’ve selected a reputable source for buying gold bars, you’ll need to decide if you want a cast, minted or CombiBar.
While each type consists of investment grade gold, they all have different characteristics, advantages and disadvantages:
• Cast: Also referred to as “poured” and “molded”, these types of gold bars are “cast” into a special mold that assures the appropriate weight and size. This process dates back to the 4th century B.C. in China. Cast bars tend to have a more rugged appearance and are typically labeled with a simple engraving describing the details of the bar and its manufacturer. Due to the economic efficiency of this process, cast bars are generally the least expensive to invest in.
• Minted: These are the type of bars you might find at Fort Knox. They have a slick, smooth and shiny appearance and are the most common gold bars. The nice finish on these bars makes them more expensive than traditional cast bars and often easier to sell because they tend to be popular. They also come securely packaged and may lose value if you open the package.
• CombiBar: The CombiBar is the size of a credit card and weighs 50 grams. It is usually the most expensive bar type and has a purity of 99.9% gold. Each bar can be broken down into 1 gram pieces manually, which can be very useful if you ever need to use your gold as currency.
- Pay for your gold.
Buying gold bars from a reputable online or local bullion dealer requires selecting bars you wish to purchase by weight, quantity and price. After making your selection, you put the gold bars in your cart, select a payment method, enter your mailing address to receive the shipment, pay for the order online and check out.
Paying for your gold bars from an online bullion dealer typically involves payment via credit/debit card, bank wire, PayPal or eCheck. Some bullion dealers have recently begun accepting select cryptocurrencies for payment as well. Gold-to-go ATMs accept cash and credit and debit cards. If you buy gold bars from eBay or other online auction sites, you would have to pay with a method acceptable to the seller.
- Trade your gold.
Although gold bars can be traded, buying gold bars as an investment generally makes more sense than considering them a tradable asset.
Even with a decent buyback policy from your bullion dealer, trading spot gold via an online forex broker would generally be far less cumbersome than trading physical gold. Buying and selling gold bars involves insured shipping, receiving and physically transporting these valuable items and could present a theft risk.
On the bright side, because of the high purity and standardized nature of gold bars, finding a buyer for your gold is generally not difficult. If you do decide to sell your bars, make sure you ship them through an insured delivery service using its tracking/tracing capabilities.
Valcambi CombiBar with $100 bill behind. Source: YouTube
Importance of Gold Size
Gold bars of different denominations, hallmarks and stamps. Source: gold-bars-blog
While gold coins generally come in troy ounce denominations, gold bars are typically weighed in grams and can be purchased in denominations of 1 gram to 1 kilogram, although you can also find 1 troy ounce size bars that weigh 31.1035 grams.
For larger gold purchases, the standard gold bar is known as the “Good Delivery” bar since it can be delivered into gold futures contracts and weighs in at 12.5 kilograms or 27.5 pounds.
Given the current gold price of $1,700 per troy ounce, the market price of a 50-gram bar would be:
(50 grams/31.1035 grams per troy ounce) x $1,700/troy ounce = $2,732.80
Furthermore, the gold in a 1 gram bar would be worth $54.66, although you will probably pay a premium for smaller denomination bars.
If you plan on selling portions of your gold investment in the future, you might want to consider buying a 50- or 100-gram CombiBar since they can easily be broken up into 1 gram pieces by hand. A larger bar size would probably make more sense for long term and bulk investments.
Gold Authentication and Certification
Gold bars typically come with an “assay card” or certificate, while most coin purchases and other types of gold purchases come with a Certificate of Authenticity (CoA). Assays can be printed on a card or on a certificate and should contain all of the pertinent information for the gold bar, such as authenticity, purity and weight.
Assays also include a seal and provide a serial number for the bar, which gives you further proof of its authenticity and integrity. The assay also generally provides a mark of the mint where the bar originated.
Best Gold Brokers
Finding the right broker for your needs to make gold bar purchases does not have to be difficult. Check out our picks for the best brokers to buy gold bars through by reviewing this list.
- Best ForRetirees
- Best ForBest for Gold IRAs, New and Experienced Investors
- Best ForRetirees Wanting Security Against Market Crashes
Bars or Coins?
If you plan on making a large gold investment, then buying cast bars would probably make more sense than buying coins. Coins were once easier to use as currency than bars, but the new CombiBar and the availability of small denomination bars means gold bars can be just as usable as gold coins.
Furthermore, cast bars represent the cheapest option per gram for a gold bar and are often preferred by bulk gold collectors because they are the traditional gold bar. Minted bars cost extra, but some investors prefer their nicer finish, while the CombiBar’s ability to be broken down into 1 gram pieces make it the best choice for those who might want to use gold as a currency.
Frequently Asked Questions
Can you legally own gold bars?
Yes. Owning physical gold has been legal in the U.S. since 1975. Prior to that, owning gold bullion in the U. S. was only legal after 1933 with a special license.
Is there sales tax on gold?
The amount of sales tax charged on gold products in the U.S. depends on the state where you reside. Call your bullion dealer to find out if you’ll need to pay sales tax on your gold bar purchase.
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