Gold as a precious metal dates back thousands of years. For most of our civilization's history, gold bullion was a base metal for circulating gold coins and a store of value in gold bars that are resistant to tarnish and will not corrode. Gold is also one of the most liquid options when it comes to investing in real assets. It has no default risks and basically no counterparty risks.
To top it off, gold has always bestowed a sense of royalty or financial realization. And it makes sense to be that way. Precious metals have been some of the most desired objects by humans since ancient history.
This article will help those who want to buy gold bars or even other forms of gold bullion, including jewelry or gold coins. We will tackle questions like "how much is a gold bar worth?" and "what is the gold spot price?" Keep reading to find out more.
What is a Gold Bar?
A gold bar is a form of gold bullion, usually shaped like gold ingots. To be considered an investment quality gold bar, it must be, at least, .995 fine gold. That is the minimum purity level required for any gold bullion products to be deposited on a Gold IRA, for instance.
There are two different types of gold bars: minted and cast.
Cast bars require a simpler process. Refineries will simply pour molten gold into a pre-manufactured mold and let it cool. They tend to contain simpler engravings, just the weight and purity, a mint logo, and, sometimes, a serial number.
Minted gold bars are made with thin layers of gold. They are fed into a die to reach the precise shape, and weight desired, forming gold blanks. Then, these blanks go in a minting machine to receive obverse and reverse engravings.
Although not always true, you could expect cast bars to be slightly more affordable than minted bars. That happens because the amount of work and the overall production method for cast bars is simpler.
What's the difference between gold bars and other forms of gold?
There are many ways in which investors can choose to buy gold. Physical gold includes gold bars, gold coins, rounds, and even jewelry. But it is also possible to invest in the derivatives gold market with future contracts or gold options, for instance.
However, derivatives might include a higher chance of counterparty risk, which is, essentially, the possibility of one of the parties involved in the transaction defaulting (failing to fulfill the contract). Many experts will suggest that the best way to hedge against such risk is to invest in the physical precious metal itself.
By buying gold bullion from professional gold dealers, investors are themselves holding and in total charge of their gold portfolio.
If you want to maximize your gold investment in pure gold content per dollar invested, you could purchase gold bars. Gold coins and jewelry could also be a fine choice, but they tend to contain higher premiums given the extended amount of work put into them. Because the process of making gold bars is simpler, you could expect lower prices on gold bars when compared to gold coins, for instance.
Finally, it's usually easier to sell gold bars at the gold market, to bullion dealers, or directly to private investors than to sell other real assets, such as real estate or artwork.
How much does a gold bar weigh?
Gold bars should weigh precisely what is inscribed on them, on the assay or certificate card.
When the average person thinks of a gold bar, they would most likely picture a 400 oz bar, which is considered the "standard" weight for gold bars. A 400 oz bar is also nicknamed a "Good Delivery Bar". They are nicknamed this because they meet the standards set by the London Bullion Market Association.
However, 400 oz gold bars are usually not the most practical ones. When buying gold bars, you can find different weights and sizes to choose from.
Smaller gold bars include 0.5 grams, 1 gram, 2 grams, 5 grams, and even 10 grams. They are pretty easy to store and handle. They also offer more flexibility to your investments because you can decide to liquidate just part of your gold portfolio without having to melt them down.
However, because gold is priced in bulk, larger gold bars, such as 10 oz or 1 kilo, offer the chance to purchase more gold per dollar invested, potentially saving on premiums.
The most popular weight is 1 troy ounce. It's neither too small nor too heavy. It doesn't require a great investment at once, such as the largest gold bars, and they tend to contain better gold prices in terms of value per pure gold content than smaller gold bars.
Gold bars' worth will be determined mainly by their weight and purity. Prices will, of course, vary according to how much gold you are purchasing.
Gold Bullion Bar Price Basics
The base prices of all physical gold products are determined by the gold spot price of the moment. The gold spot price is a live rate that is constantly changing according to market trends. It is a system of price discovery mechanisms in which the interactions between buyers and sellers, trading gold thousands of times during the day, influence the final price. In other words, it follows the basic laws of supply and demand.
Gold prices tend to perform well in times of economic downturns. Since January 2018, the price of gold has not gone below $1,250 per ounce. During the pandemic outbreak in August 2020, it reached an all-time high of $2,069.29. In 2022, the spot gold price for 1 troy ounce fluctuated around $1,800, having peaked at $2,043.83 in March. Larger gold bullion, such as 5 oz or 10 oz gold bars will currently spot at around $8.776,7 and 17.558,4, respectively.
You can also find proportional spot rates in grams or in kilograms. At the time of writing of this article, base gold values for 1-gram of gold has been fluctuating around $55.87. So, for instance, a 100-gram gold bar will have the spot value around $5,887, whereas 1-kilo gold bars would be around $58,862.
Now, the final gold bar cost is not exclusively determined by the spot price. In fact, it is exceedingly rare for a bullion dealer to have gold bars available on spot. All gold bars will have some sort of premium on top of the inherent value of the gold they contain. A premium is a set value or percentage charged above the spot price of gold. Depending on the dealer and the mint of the bars, these premiums can vary wildly, finally reaching the retail value, or ask price, for each gold product.
Check out our blog post on How to Buy Gold Bars
Current Gold Bar Prices
At SD Bullion, our gold prices update approximately every 60 seconds with current values. Please see the below sizes of gold bars to get the most up-to-date and current retail value for each respective size.
What Are Gold Bullion Bar Premiums?
Generally speaking, this added cost over the spot price for any bullion derives from several factors, including the production, storage, and overhead costs incurred by the mint/refinery in producing the coin, plus a "mark-up" indicating the selling cost and the profit for the wholesaler selling the coin to a retailer.
Some premiums are a set monetary amount over the spot price, while other premiums can be a set percentage over the spot. Set monetary premiums are most common among bullion items that are 1 oz in weight.
Prominent Mints Matter
As it is with every mass-produced product, gold bars manufacturers matter when determining how much a gold bar is worth. Prominent private mints, such as PAMP Suisse, Valcambi, or Argor-Heraeus, are usually more sought-after than lesser-known mints. The same goes for government-owned facilities, such as the Royal Canadian Mint, the Perth Mint, and the Royal Mint.
When you buy gold bars from such refineries, you can expect to receive a product that meets the highest standards in the precious metals industry. Likewise, it will probably be easier to sell gold bars from these producers rather than from unknown brands, and you will likely receive better premiums from them.
Premiums to Expect from SD Bullion
***All premiums below are as of February 2023.***
Current Premium for Gold Gram Bars
Gram gold bars will have much higher premiums compared to larger sized bars because they have similar minting costs to the larger sizes but have less gold content
1 gram gold bar = $8-$12 over spot
5 gram gold bar = $19-$24 over spot
10 gram gold bar = $23-$28 over spot
20 gram gold bar = $40-$48 over spot
50 gram gold bar = $43-$50 over spot
100 gram gold bar = $39-$45 over spot
Current Premiums for 1 oz Gold Bars:
For 1 Troy ounce gold bars, the premiums vary depending on the quality and mint that they come from.
1 oz Random Design Bars = $45-$50 over spot
1 oz Random Design Bars in Assay = $55-$60 over spot
1 oz Gold Bars from Specific Mints = $60-$70 over spot
Current Premium for 5 oz Gold Bars:
5 oz PAMP Suisse = $65-$75 over spot
Current Premiums for 10 oz Gold Bars:
Random Design 10 oz Gold Bars= $35-$40 over spot
10 oz PAMP Suisse Gold Bars = $60-$70 over spot
Current Premium for 1 Kilo Gold Bar:
1 Kilo RCM Gold Bar = $42-$48 over spot
Buy gold bars online at the lowest price from SD Bullion today! You can place your order through the website or call us at 1-800-294-8732 and have an experienced bullion dealer assist you with your purchase!