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Gold Bars Or Gold Coins For Investment – What’s Best?

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gold bars or gold coins for investment

Everything you need to know to decide if you should get gold bars or gold coins for you investment.

Great to hear that you have decided to invest in gold. Now the next big question: gold bars or gold coins for your investment?

In this post we will discover the difference between the two at a beginner level in order for you to make the decision yourself. Although gold investing is suppose to be simple there is a lot of pitfalls and scam artists out there.

This post will help you to not make any mistakes or fall for any scams that can cost you thousands of dollars.

Let’s decode the question of gold bars or gold coins for investment

As I said above we are going to try and make this as simple as possible. Often times you see people discussing bars vs coins question and it gets way too detailed.

We are going to keep this at a very high level, everything you need to know to safely start investing in gold.

First lets discuss bars, then coins and then have a look at what’s best for you.

Invest in gold bars

1 ounce PAMP lady fortuna

1 ounce PAMP Lady Fortuna gold bar

Gold bars are the bigger, often rectangular shaped, pieces of bricks that are issued by private mints. Gold bars can also often be referred to as gold bullion.

These are the things that you might have seen on the TV, although those big 1 kg bricks are not usually what the private investor gets (because they are very expensive).

Gold bars vary in size but usually comes in 1 ounce to 10 ounces and are very easy to stack on top of each other.

Gold bars is in my opinion the easiest way to invest in gold.

What’s the pros of investing in gold bars?

Personally, investing in gold bars is inline with how I invest in gold. The reason why is very simple, you get the most gold metal for your money.

When you invest in coins there is a few other factors that determine the cost of your gold. If a gold coin is rare the price per ounce can be a lot more expensive than the current gold price.

By investing in gold bars you do not have any of these extra layers of cost. What you are paying for is the price of the metal plus a dealers fee. This way you will get the most amount of gold possible for your money.

As we were talking about you can buy rare coins that’s called numismatic coins. This is not anything that I recommend you to do if you don’t know exactly what you’re doing. The possibility of getting scammed is very high.

Buying gold bars is very simple and all you need to know is what the price of gold is today and see how close to that you can come with a bar. The closer to that cost the smaller profit the dealer will take. If someone is selling their gold under the spot price you should jump on it directly.

It’s also very easy to sell you gold bullion. Because people know exactly what they’re buying. It’s just gold, melted into a rectangular bar. Nothing else to think about.

There are a few things that you should look out for when choosing a gold bar that you want to invest in.

  • Like we were talking about, try to get it as close to the gold spot price as possible.
  • Make sure that the gold is 24 karat and 99.99% purity (pure gold, not mixed with any other cheaper metals).
  • The size of the bar doesn’t matter that much, go with what works best for you. The bigger the bar is the cheaper it will be per ounce. Same as by buying a big pack of toilet paper the price per toilet roll will be cheaper. But remember that it might be harder to sell a 100 ounce bar compared to a 1 ounce bar (more people can afford a 1 ounce bar than a 100 ounce bar).
  • Try to get the bar from an accredited refinery where there is a package that proofs that your gold is authentic. Accredited refineries are things like credit suisse, PAMP, volcambi, Perth Mint, Royal Canadian Mint, just to name a few. But if you get your gold from a good dealer you are all good. Have a look at where I buy my gold for some insight.

What’s the cons of investing in gold bars?

Although I generally don’t really see any major problems with investing in gold bars there are 2 things that comes to my mind.

  1. You might have to get your bar certified to prove it’s authenticity and purity if you want to sell it. If you just buy pure gold in a bar you do not have much proof that it’s actual gold. Then you might have to get a third party company to certify your gold which costs a small amount.
    Make sure you get a gold bar from a reputable refinery and try and not break the package it comes in. Everything to be able to show that it is in fact real gold.
  2. It’s not as simple to use in barter. In case of an emergency where you can’t get money out of the ATM for any reason you might need to use your gold in order to provide food and other necessities for you and your family. This happened in Cyprus a few years ago and there is a lot of things that can fail and make this nightmare a reality.
    Because gold bars are usually bigger and more valuable it’s very hard to walk in with a 5 ounce bar and try to purchase some food. Then you’re better off having your gold in smaller quantities.
Lineup outside of a bank in Cyprus when the banking system completely collapsed. You couldn't take out much money, if any, for over a week and the credit cards didn't work. How would you put food on the table then?

Lineup outside of a bank in Cyprus when the banking system completely collapsed. You couldn’t take out much money, if any, for over a week and the credit cards didn’t work. How would you put food on the table then?

Invest in gold coins

When you say gold coins there can be two different things to you would be talking about. There is numismatic coins which are the one’s that we briefly touched upon before in the article. These are the coins that are rare and that are said to have a collectible value.

There is a really big chance to get scammed if you buy these collectible coins if you don’t know more than the person you’re buying the coin from. If this is what you are interested in make sure to read my take on numismatic coins first to not fall into any scams.

The other coins are generally split into two different coins. The first one’s are government issued coins that are considered to be legal tender. There is a face value on the coin meaning that you should be able to pay with it.

american gold eagle - front and back

American Gold eagle. The front and the back. See the $50 face value on the coin?

For example the American Gold Eagle have a face value of $50 (it says $50 on the coin). But to use it as legal tender would be pretty stupid because the same ounce of gold have around $1300 in gold value. Why use it for $50 instead?

The other coins are called gold rounds. This is basically the same but it’s issued by a private mint instead of a government mint which means it’s not legal tender. But because you hopefully get the coin for the gold value this shouldn’t matter too much to you.

A tips is to buy you gold coins like you would buy gold bars. Look at the spot price and then try to get your gold for a price close to the spot price for gold.

Maybe you want to get them just because they are better looking than gold bars in your view. But don’t get dragged into the collectible value of coins and you will be fine.

There is one major thing that you should think about if you consider investing in gold coins. It’s the fact that most of these coins do not contain just gold like gold bars do.

The reason why is because these coins are suppose to be circulated. Gold is a very soft metal and the coins would break easily if it contained only gold. This is why they melt down some other materials with the gold to make the coin more durable.

For example the American gold eagle only contain 91.67% gold and the rest is other, less valuable, metals.

So what’s best for you then? Gold bars or gold coins?

Personally, investing in gold has always been about the metal itself for me. I want to get as much of the shiny valuable metal as possible for my money. This is most easily done by investing in gold bars.

Stay away from numismatic collector coins if you do not know exactly what you’re doing.

If you want to purchase gold coins try to think in the same way as you would if you would invest in gold bars. Have a look at the spot price of gold to see how much one ounce trades for today. Then look at the price for the gold coin and try to get as close to the spot price as possible.

Buy them because you think they are good looking and not for any other reason. Be aware that most gold coins do not contain 99.99% pure gold like gold bars does.

Please leave a comment below if you have any questions. I would love to hear from you and will do my best to try and help you make the right investment choice.

Hopefully we have answered the question of what’s best, gold bars or gold coins for investment?

Find out where I get my gold by clicking the green button below.

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14 Comments

  1. Awesome post Marcus, i personally love buying gold bars as well to avoid rarity of coins. Also I find some mints charge more for there minted coins over there minted bars. Great article!

    • Hi Quinn.

      Thanks a lot for the nice comment. Yeah I have seen that they charge more for minted coins than minted bars as well. It just comes down to it that we should want as much physical 24 karat gold as possible for our money. Getting this in a way that we can prove later on that it is actually gold so we can sell it.

      Marcus

  2. Great information. I like to buy gold coins as a hedge against the stock market. I like coins because they are easy to move and everyone is familiar with them.

    I have heard that gold can go up as high as $5000/ounce. What do you think about that?

    • Hi Tony and thanks for the comment.

      Gold is a great hedge against the stock market if there would be a crash. As long as the central banks and the government are able to fool us all that the economy is doing great the stock market will probably not crash.

      But it’s just a matter of time before people realize that the stock market is overvalued and completely fueled by cheap money policies from the central banks. The only reason in my view that the stock market is this high right now is because 0% interest rates lets companies buy back their own stock. And most likely the central banks are intervening again, pumping the stock market up.

      The fact is that there is a huge disconnect between the stock market and the sate of the real economy. The stock market is in a bubble right now and it will come crashing down like it always does. Hold gold as a protection against that.

      I can see gold go to $5000/ounce as well. The thing is that is all depends on how low the dollar will go. I mean one ounce of gold could be $100,000 maybe as well but then at the same time a cup of coffee is $150. It all depends on inflation. Read about my long term gold price forecast to see where I think the gold price can go.

      Marcus

  3. Regardless of gold bars or gold coins, gold is the BEST thing to invest in, we can look at history, gold has never lost its value, and its the best currency to have, I think in time countries will probably go back to gold as currency. Awesome and informative post./

    • Hi Sam and thanks for your comment.

      Gold is without a doubt the best thing to own in your savings account. There isn’t any yield on gold so it doesn’t pay you a dividend every month but for savings and money there is nothing like it.

      I really hope you’re right that the world goes back to a gold standard. That feels like the only way to really save our current state of the economy. And throughout history it’s only gold money that has worked. Fiat currency (what we are on today, paper backed by nothing) has always failed. There has been around 5000 fiat currencies in documented history. They all have one thing in common, they went to ZERO.

      If you think that the dollar will be the first currency in 5000 year history to make it then you do not believe in statistics.

      Marcus

  4. Very informative. I’m just learning about this subject and I learned a lot from this post. I finally think that I can start investing in gold. Are there any specific brands that you like?

    • Hi Matt and thanks for the comment.

      Great thing that you learned a lot and I would suggest you to have a look at how I invest in gold to know all you need to know before you start investing in gold. After that have a look at where I invest in gold to find good reliable dealers that I have personally been using for a long time.

      I don’t prefer any specific brands. That is all up to you as a personal matter. If there is a bar that you think looks good then go for it. The most important thing is that you buy LBMA standard gold. That gold comes from refineries that have the LBMA stamp which means that the gold will be up a certain quality. Brands like that are Credit Suisse, PAMP, Royal mint of Canada, Perth Mint just to name a few.

      Marcus

  5. I recently looked into buying gold bars, and have a couple questions for you:

    1. What’s the smallest size gold bar you’d recommend? 1 ounce is a little steep for me right now price wise, so I am wondering if there are smaller bars available and if they are still a good investment.

    2. Is eBay a good place to buy gold? I see lots of listings for gold there, but since I’m a newbie I’d like your opinion.

    Thanks in advance!

    • Great questions Ian, here’s my take on it.

      1. The size of the bar is totally up to what your budget can take. Like I was talking about it’s cheaper to buy a one ounce bar per gram than it is to just buy a gram of gold. So the smaller denomination the higher premium you have to pay above the spot price. But I totally agree with you that one ounce can be a little bit steep. There are 1grams, 2.5grams, 5grams and 10, 20 grams and half ounces and so on.
      When you just want to start getting exposed to gold I suggest setting up a free gold funded savings account. Here you can purchase 1 gram every month or week super easy. It’s the best way to start getting exposed to gold in my view. But if you just want bars the size doesn’t really matter. What matters is the purity and that it’s good gold (99.99% 24 karat). Then get a size that fits your budget.

      2. A lot of people are selling their gold on eBay and for the most part it is a good idea. But it’s like with everything else. There can be people out there scamming you. I have heard of horror stories when someone thought that they bought gold but it turned out to just be tungsten (a metal that looks like gold but is way cheaper).
      The thing you need to think of if you buy from eBay is to get certified gold. You need to be absolutely sure that you’re buying pure 99.99% gold and not something else. If you can be sure of that then go for it. But I don’t really see a reason why if you don’t find gold that is super cheap. I would rather purchase it at a dealership where I know what I get.

      Thanks for the great comment,
      Marcus

  6. Wow very interesting post. I would have had no idea that there was really a difference between which is better to invest in. Is there really not that much value in containing full sets of collectors coins? Even after like 10 years? Thanks for the interesting article!

    • Hi Sam and thanks for your comment.

      Yes there is value in collector coins. In fact there can be a lot of value in collector coins. The only problem is that you need to know exactly what you are doing. Because if you do not know how to price this rare coin correctly you will certainly be scammed.

      I have heard of so many stories of people buying collector coins for a huge markup. Say for example that 1 ounce trades for $1300 they have bought a coin for $3000 that’s one ounce. The reason why is because the dealer were telling them how rare this coin is, that it isn’t created anymore and so on.

      Just to realize that when they wanted to sell the coin there was nothing rare what so over with the coin. And they could sell it for maybe $1400 instead ($100 over spot price). This is how you can lose money buying rare collector coins.

      You need to know more about the coin than the person selling it to you, otherwise he will likely scam you like in my description above. If you just want to get exposed to gold in you portfolio (the actual metal) it’s easier and safer just to buy gold bullion.

      Marcus

  7. I had heard from several friends who are collectors over the year that gold is something that will be a very good idea to invest in the future, so I started to do a little research of my own.

    What I discovered is that it can be a very confusing area to dip into if you know absolutely nothing starting out, and I found your article to be highly informative and a great starting point for myself!

    It definitely sounds like Gold Bars are the way to go if you are first starting out, and that I should branch out to coins as I get a little more experience under my belt.

    I will definitely be checking back into your website in the future to see what else I can learn if I decide to go that route!

    • Hi Matt and thanks for your comment.

      Investing in gold is definitely going to be a smart move for the future. Every single time in history when we have been on a economic system like we are today gold has turned out to be the best way to protect, and often increase, your wealth.

      People that do not own physical precious metals when the next stock market crash happens have a big possibility of getting wiped out. Paper assets will evaporate just like they did 2008.

      You’re right. Gold bars is the way to go in the beginning. In fact, I haven’t bought any numismatic coins even though I have been investing in gold for over 10 years. I still stick to my investment strategy which is that I want to get as much gold as possible for my money.

      I don’t invest in collector coins or because there is a certain design on a coin. I just want to get as much as the raw shiny yellow metal as possible.

      Please contact me if you have any other questions.

      Thanks,
      Marcus

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