When deciding whether to purchase gold bars or gold coins, it’s important to understand the differences between these two popular forms of gold investment. Both are valued for their purity and weight, but they serve different purposes depending on an individual’s preferences.
This guide will break down the key differences between gold bars and gold coins to help you make an informed decision about which might suit your needs better.
Feature
Gold Bars
Gold Coins
Premiums
Lower percentage premiums due to larger sizes
Higher percentage premiums due to minting costs and designs
Sizes
1g to 1kg
1/10 oz to 1oz
Flexibility
Best for large investments
Better for smaller incremental purchases
Collectibility
Less collectible, mainly valued for gold content
Often collectible, with historical value
Storage
Compact, easier to store in large quantities
Requires more space for larger collections
Gold Bars are the most straightforward form of gold investment. They are refined into a cuboid shape, with the weight and purity inscribed on the surface. Typically made from 24k gold (99.99% pure), they are designed for those who want to invest in gold for its intrinsic value rather than any historical or collectible appeal. Investors favour gold bars when they want the maximum amount of gold for their money, as they generally carry a lower premium over the spot price compared to coins.
Gold Coins, on the other hand, can carry additional value due to their legal tender status, historical significance, and collectible appeal. Many gold coins available today were once circulated as actual currency and have a rich heritage.
This traditional value, combined with their purity and government backing, makes gold coins a favoured option for both collectors and investors alike. The extra craftsmanship, history, and potential numismatic value often mean that gold coins come with a higher premium over the spot price than bars, but they remain a highly liquid and versatile investment.
Gold Bars: Lower Premiums, Larger Quantities
One of the biggest advantages of gold bars is that they tend to have lower premiums than coins. Premiums refer to the additional cost above the spot price of gold, which includes manufacturing, distribution, and dealer margins.
Gold bars, especially those weighing 100 grams or more, are cheaper to produce on a per-ounce basis than smaller gold coins. This makes them more affordable for those who are looking to buy larger quantities of gold with minimal added cost.
Sizes of gold bars vary widely, typically ranging from 1 gram to 1 kilogram, allowing flexibility for both small and large buyers. Some popular sizes include the 1-ounce gold bar, 10-gram bar, and 100-gram gold bar.
Gold Coins: Flexibility and Collectibility
Gold coins, while smaller in size, offer a level of flexibility and collectibility that bars do not. Many investors choose coins because they are easier to buy, sell, or trade in smaller increments.
Gold coins like the Gold Sovereign, Gold Britannia, and Krugerrand are recognised globally and often carry a slight premium due to their intricate designs and minting processes. Coins also tend to have historical or collectible value, which appeals to collectors as well as buyers looking for more than just gold content.
Coin sizes typically range from 1/10 oz, 1/4 oz, 1/2 oz, to 1 oz, giving buyers the option to purchase smaller quantities. This makes coins particularly attractive for those who may wish to acquire gold in smaller, more manageable amounts over time.
Why Do Gold Bars Have Lower Premiums Than Coins?
The lower premium on gold bars is primarily due to their simplicity. Gold bars are generally larger, meaning the production cost per ounce is lower than for smaller items like gold coins. With coins, the added detail in minting and their smaller size contribute to higher premiums. This makes bars a more cost-effective option for buyers who are looking to acquire larger quantities of gold at lower costs. However, gold coins offer more flexibility for those who may need to buy or sell smaller amounts. Coins can be sold one at a time, whereas larger bars may require finding a buyer for the entire bar at once.
What Size of Gold Should I Buy?
Choosing the right size for your gold purchase depends largely on your goals and budget. Here are some common options:
Small Sizes (1 gram to 10 grams): Ideal for those making smaller purchases or those who want to accumulate gold over time.1-gram bars or 10-gram bars are perfect for incremental buyers.
Medium Sizes (1 ounce to 100 grams): These are popular among a wide range of buyers, offering a balance between affordability and flexibility. 100-gram bars or 1-ounce bars are often chosen for their relatively lower premiums compared to smaller bars or coins.
Large Sizes (250 grams to 1 kilogram): Best suited for those looking to purchase significant quantities of gold at lower premiums per ounce. 1-kilogram gold bars offer excellent value for those buying in bulk.
Gold Bars vs Gold Coins: Storage Considerations
Storage is an important factor when deciding between gold bars and coins.
Gold bars are more compact, making them easier to store in bulk. A 1-kilogram gold bar, for example, takes up far less space than an equivalent value in gold coins. If you're purchasing larger amounts, bars may be more convenient for storage.
Gold coins, while more flexible, may require more space if you're buying large quantities. Coins can also come in protective cases, which can add to the storage size. However, for those who enjoy the collectibility aspect of coins, the trade-off in storage space is often worth it.
Whichever you choose—gold bars or gold coins—The Gold Bullion Company offers a wide selection to suit your preferences:
Browse our Gold Coins: Choose from a wide selection of Britannias, Sovereigns, and more.
Why Buy Gold from The Gold Bullion Company?
When you buy from The Gold Bullion Company, you benefit from:
Competitive prices: We offer prices based on live gold rates, ensuring you get a fair deal whether you're purchasing bars or coins.
Secure delivery: All orders are shipped with fully insured delivery for peace of mind.
20+ years of experience: We've been a trusted provider of gold bullion since 2003, helping thousands of customers with their gold purchases.
If you're ready to make a purchase, explore our extensive collections of gold bars and gold coins. Whether you're buying for the first time or adding to an existing collection, we have options for everyone.
Both gold bars and gold coins offer unique benefits, depending on your preferences for flexibility, size, and premiums. Explore our collection today and find the right option for you!
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