Should you buy gold coins or gold bars?
The answer requires the potential gold bullion buyer to weigh a few factors aside from the gold bullion itself.
Things like the overall gold price, gold guarantee government or private mint, gold purity, gold-selling privacy, gold unit size, and more.
The best answer(s) require about 10 minutes of research for most gold bullion bar and gold coin, buyers. Many often choose a mix of both.
Which is better? Gold Coins vs. Gold Bars?
Let us begin the debate by defining both forms of gold bullion products in the 21st Century.
Gold Coins - (n) a precious metal wafer struck in a coin format by a government mint typically stamped with a legal tender face value (the most significant exception being the famous South African Krugerrand Coin). Sizes vary from fractional grams to kilos and larger.
Gold Bars - (n) precious metal lump or ingot struck by both government mints and private gold mints. Typically gold bullion bars do not carry legal tender face values and cost less per troy ounce or gram vs. gold coins.
The answer on which is better will be often get determined by the gold bullion buyers highest objectives.
We shall discuss whether gold coins or gold bars have an advantage in the following determinants:
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Overall Gold Price on Like-Kind Weight between Gold Coins and Gold Bars
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Government vs. Private Mint Gold Bullion Guarantees
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Gold Purity levels of Gold Coins vs. Gold Bars
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Gold Bullion Coin and Gold Bullion Bar selling privacy factors
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Gold Coin vs. Gold Bullion Bar size variances
PRICE: Gold Bars vs. Gold Coins?
In general, gold bars (even when struck by government mints) enjoy lower prices or premiums over the fluctuating gold price per ounce although the most economical price does not always win the day for gold bullion buyers.
Many gold bullion buyers will choose to pay a slightly higher price or premium per ounce or gram of gold to have a government guarantee and government mint hallmark.
If getting the overall lowest price is the most critical factor for your gold bullion buying, try buying highly respected private mint gold bullion bars like Republic Metals Gold Bullion Bars.
If a getting a low price yet having some government guarantee is essential to you, try Royal Canadian Mint Gold Bars.
In general as well, the larger the gold bar is the lessor its price per gold weight will be due to lessoned fabrication costs associated with large gold bars (whether private mint or government mint struck).
In terms of overall lowest price, in general, gold bars win out as they are typically slightly less costly than similar weight gold coins.
GUARANTEE: Gold Bars or Gold Coins?
Both private gold mints and government gold mints guarantee the several gold bars and gold coins they strike and issue.
The question a concerned gold bullion buyer might ask themselves perhaps is who enforces this guarantee and which entity has a longer potential to last.
For example, the US Mint has the US Secret Service helping to ensure that all US Mint gold coins issued never get counterfeited successfully.
The Royal Canadian Mint has the Royal Canadian Mounted Police ensuring its gold coins, and gold bars also never get counterfeited successfully.
Private gold mints have been faster to respond to fake Chinese gold bars by adding cutting edge technological applications to many of their products, like Sunshine Minting’s MintMark SI technology.
The penalties for counterfeiting government legal tender gold coins, for example, are punitive Federally as well as counterfeiting private mint gold bars.
In terms of overall guarantee between gold coins vs. gold bars, the entities with the longer track records and monopoly on violence win this debate; government mints have the edge.
PURITY: Gold Coins or Gold Bars?
Many government mints still issue 22k gold coins today. They often get traded mainly on their overall gold content. For example, a 22k, 1 oz American Gold Eagle Coin which has a 1.09 oz weight overall due to additional copper and silver added. They are traded based on their overall one troy ounce of gold content.
These 22k gold coin issuance typically have additional silver and copper mixed into their makeup to make the gold coins harder and resistant to dents or warping.
Two of the most popular gold coins in the world are, in fact, 22k gold.
The most popular gold coin of the 1970s 1980 gold bull market was the 22k South African Krugerrand Coins.
The Gold Krugerrand coin remains very popular and well trusted to date.
Today the most purchased gold bullion coin remains the 22k American Gold Eagle Coin.
With either .999 fine gold coins or .999 fine gold bars, one could rather easily make an indentation in then with a fingertip of pressure applied. That is how soft pure gold is.
This fact makes 24k gold coins very fragile in terms of protecting them from dings or wear. Mainly this is why most modern .999 fine gold bullion coins come in protective plastic tubes and slips. Even many small 1 ounce or lessor sized gram .999 fine gold bars come in protective packaging as well.
Often government gold mints and private gold mints will make gold coins with .9999 or even .99999 purity. Achieving this four-9 or 5-nine fine purity level frankly is mostly gold refining differentiation and for marketing purposes. Just do the math.
The value of 0.0009 oz of gold is worth $1.22 in fiat US dollars, based on a gold spot price of $1350 oz USD.
Move the decimal over to the left again, and 0.00009 oz of gold is worth just over 12¢ USD based on the same spot price (i.e., a cupronickel dime and zinc-based pennies of legal tender face value, in other words not much value).
Gold purity can matter when moving gold across national or governmental boundaries. For example, .999+ fine gold can go into Canada tax-free while 22k gold gets slapped with taxes. Mostly this situation is due to governments setting up laws to give their respective government gold mint an advantage versus other competing government gold mints (i.e., Royal Canadian Mint gets an edge over competitors like South African Mint and US Mint).
This debate is a draw, dependent upon a gold buyer's overall preference of gold purity hardness and the ability to move gold internationally if desired.
PRIVACY: Gold Bars or Coins?
Based on current bullion privacy rules in 2019 within the United States, if you sell gold bullion to a gold dealer in a short related time frame, the questions of (#1) what kind of gold you are selling and (#2) how much gold you are selling to the gold dealer are crucial to whether the transaction gets reported to the IRS via the IRS 1099-B form.
Of course, regardless of the transaction being private or not, the IRS wants all capital gains and losses to get reported on investor income tax reporting. Consult your professional tax advisor with any questions you may have.
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REPORTABLE GOLD SALE |
MINIMUM FINENESS |
MINIMUM REPORTABLE AMOUNT |
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Gold Bars (both Private & Gov’t Mint) |
.995+ |
Any size bars totaling 1 kilo (32.15 troy oz) or more |
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Gold Maple Leaf Coins 1 oz |
As minted |
25 or more |
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Gold Krugerrand Coins 1 oz |
As minted |
25 or more |
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Gold Mexican Onzas 1 oz |
As minted |
25 or more |
If privacy is of the utmost importance, there are various gold coins issued by government mints, which are excluded from gold dealer reporting when buying back gold from customers.
Fully private modern government gold coins include:
In the debate of gold privacy within the United States, based on current statues, most government gold coins win over private, and government-issued gold bars.
SIZES: Gold Bars vs. Coins?
In the ongoing battle of which mints can issue the smallest and largest gold bars and coins, both private gold mints and government gold mints have taken their games to new heights.
Currently, the smallest modern gold bullion coin regularly issued is the 1/20 oz Royal Canadian Mint Gold Maple Leaf Coin and the 1 gram Gold Chinese Panda Coins.
Not to be outdone, private gold mints also strike 1 gram gold bars regularly as well.
In larger gold coin and gold bar issuances, both government mints and private mints do produce kilo size gold coins and gold bars respectively.
The Biggest Gold Coin ever: Silly Mint Marketing Wars
For a few years, the Royal Canadian Mint enjoyed all the free marketing that striking the then world’s most significant gold coins brought it.
Recently though, one of the various record-setting 100-kilo gold coins was stolen in Berlin, Germany. The suspects have since gotten apprehended.
To date in 2018, the world’s largest gold coin ever struck is now held by Australia’s Perth Mint.
A 1,012-kilogram gold coin oddity has been making world tours mainly in the gold buying eastern world.
In terms of gold coin vs. gold bar sizes, both private and government mints make various sized gold bars and gold coins, respectively.
The most common gold coin size remains one troy ounce (1 oz) while the international exchange standard gold bar is no longer the old 400 oz gold bar central bank standard, but the LBMA approved 1-kilo gold bar exchanged on the Shanghai Gold Exchange (the world’s now largest physical gold trading market).
The question of gold coin and gold bar size preferences has to be determined by each gold buyer based on overall costs per troy ounce vs. flexibility in liquidation and the other debates, as mentioned earlier here.
It is more difficult to both buy, sell, or perhaps spend 1 kilo of gold vs. 1 gram of gold. Various factors need to be weighed by gold bullion buyers in making the correct selection per their personal preferences and capital allotments.
