Investors looking to diversify their portfolio or protect their wealth from fiat currency devaluation and stock market insecurity during times of economic crisis, usually turn their focus to precious metals as a sensible tangible asset investment.
Gold, the most popular option among precious metal investors, has been around for millennia as both a monetary currency and commodity. Gold bars are the epitome of those two features combined. They are a real asset that won’t corrode and store financial value for generations to come.
In addition, gold bullion bars are mostly sold based on their precious metal content alone. That means they could prove to be the best way to optimize your investment on a dollar per ounce of gold, especially considering dealers will typically charge lower premiums for this kind of product (in comparison to gold coins, for instance).
If you are a newbie or a seasoned investor looking for portfolio diversification, this guide will take you through the steps on how to buy gold bars and give you an in-depth perspective on the gold market.
What are Gold Bars?
First things first: a gold bar is a type of gold bullion that is made by pouring molten gold into molds to form an ingot (poured bars or cast bars) or minted with a design and/or brand logo (minted bars).
There are various sizes and shapes to gold bars, from a half gram to one kilogram.
Gold bars are mostly produced by private mints around the world (such as PAMP Suisse and Scottsdale Mint), but the British Royal Mint, the Canadian Royal Mint, and the Australian Perth Mint are sovereign government institutions that also make them.
What is the buying process?
If you are new to the physical gold market, you might be overwhelmed with questions, such as, “How do I start investing?”, “How much physical gold should I include in my investment portfolio?” or even “What is the best gold bar brand to buy?”
We have prepared a few steps as a guideline to help you plan your investment wisely when buying gold bars online.
STEP 1 - Plan your purchae
If you are new to buying gold bullion, you may be asking yourself “is now a good time to buy.” Well, we are not financial advisors but what we can say is that if you take a look at historical Gold spot prices, you’ll see that gold has held it’s purchasing power for decades and even thousands of years.
Buying physical gold should not be looked at like a short term investment. So we don’t recommend getting obsessed over watching the price of gold and trying to enter the market at the exact perfect time.
The gold spot price, in simple terms, is the standard price of gold for a particular moment. The spot price will fluctuate during the day, sometimes by the minute, according to derivatives being traded on markets such as COMEX, NYMEX, and LBMA. However, in the long term, the spot price is mostly determined by supply and demand laws.
The spot price, however, is just a base price. Dealers will charge a percentage over that (which is called a premium) and that is what will ultimately determine the product’s final cost.
On our website, you can see the live gold spot price on top of the page (above our logo) and also historical prices, and an interactive chart here. Use this information to your advantage when deciding the right time to lock-in the transaction.
STEP 2 - Plan your investment size
When you decide on the right time to buy, it will be time to calculate how much you actually want to invest in physical gold bullion.
There are no universal rules determining how much of your wealth you should allocate to any asset. That will depend on your goals and the business cycle.
In general, experts would suggest allocating around 10-15% of your investment portfolio in gold, but that could be more during economic downturns, or less if you feel an economic trend to go for riskier transactions at the stock market that could turn a profit (or loss) in a shorter term.
STEP 3 - Choose your products and lock-in the price
Now that you know how much you want to invest in physical gold, it is time to choose your bullion product.
The most popular size for personal purchase is the 1 troy ounce of .999 fine gold content. Larger bullion bars, such as 5 troy ounces or even 1 kilogram, have lower premiums, however, purchasing a larger amount of smaller gold bars (such as 1 gram to 10 grams) can help offset that.
As mentioned previously, throughout the day, the gold spot price will fluctuate a little every other minute. Because gold is not as volatile as other assets, those daily fluctuations will generally be soft, rather than huge spikes or drops.
At SD Bullion, when your chosen product is added to the cart and you reach the “payment” section of the checkout, your order will lock-in for 5 minutes in order to save the agreed-upon price during the final steps of the transaction.
Finding the Best Price
If you want to maximize your investment and acquire the most gold content for your dollar, you should learn how to calculate the gold price per troy ounce and evaluate which product will meet that expectation.
Most gold bars are produced with .9999 fineness. That means that if you want to compare the prices of products with different weights, just calculate the average cost for 1 troy ounce of gold (or 31.1 grams).
In addition, as mentioned before, keep in mind that the larger the bar, the lower the premium over spot. That means the premium percentage of a 1 gram bar is higher than that of 1 oz of gold, a 10 oz bar will have an even lower premium, and so on and so forth.
Where to Buy Gold Bars
Gold bars can be sold at banks or local dealers, but online retailers, such as SD Bullion, tend to offer lower rates due to having a broader range of customers and higher demand.
Every dealer charges a premium that varies widely over the spot price of a bullion product. Because local dealers usually have fewer customers and higher maintenance costs (storage and inventory insurance), they will probably add higher premiums to their products in order to still turn in a profit.
Only shop from reputable dealers. SD Bullion has earned an A+ rating from the Better Business Bureau for 8 years and is proud to boast over 50,000 positive reviews from our customers.
We offer you industry-leading rates, fast and discreet shipping, and top-grade customer support that is available over the phone at 1(800)294-8732 and through our live web chat feature on the bottom right of your screen, from 8 am to 6 pm from Mondays through Thursdays, and 8 am to 5 pm on Fridays. You may also reach us at email@example.com or through our contact page. We will reply to you as soon as possible.
Gold Bars vs. Gold Coins
One of the biggest conundrums among gold investors is whether to buy gold bars or gold coins.
Gold coins are only struck by government mints (or private mints granted legal authorization to produce them under that nation’s name). They are also usually minted with higher details in the design that are filled with symbolism and cultural representations of the country that emitted them.
Gold coins, contrary to gold bars, are legal tender and carry a face value. Thus, gold bullion coins could be seen as the more liquid option.
For those reasons, a gold coin tends to carry a higher premium than a gold bullion bar. The more work that is put into the bullion, the more expensive it will be.
That is why gold bars could be the best option for those looking to amass more pure gold content and do not want to consider any numismatic value.
What are the best types of Gold Bars to buy?
First of all, make sure to look for investment-quality gold bars that are, at least 99.5% (.995) pure gold. Most of our gold bullion bars in stock have .9999 purity levels.
If you are planning to buy gold for a self-directed retirement account (IRA), make sure to choose a bullion bar that is IRA approved. You can check that information on the products specific page.
With respect to brands, for ease of liquidation, we recommend you stick with refiners that are well known and regarded in the precious metals industry. Their bars might be slightly more expensive than lesser-known mints, but they also fetch a slightly better price during the buyback process and are easier to resell.
Check also our article on Best Gold Bars to Buy
Let’s take a look at a few highly respected and trusted brands from the United States and around the globe:
This Swiss manufacturer is one of the most regarded in the world. They make gold bars from a variety of sizes and their Lady Fortuna design is easily recognizable among investors worldwide as a stamp of top-notch quality. They also have a themed design series that represents different cultural aspects, such as the Faith series, depicting, in each bar, a beautiful rendition of different belief symbols from society.
This American Mint from Arizona is one of the most prominent producers in the country and the world. Their products are embellished with a majestic crowned lion head, their logo, and are packaged in a Certi-Lock assay, a state-of-the-art technology that ensures the bar’s authenticity.
- Sovereign Government Mints
These are government-run refineries that produce gold and silver bars in addition to gold and silver coins. Not many national mints do so. The Australian Perth Mint, the Canadian Royal Mint, and the British Royal Mint are the ones who have also been producing this bullion product. Because their gold bars are backed by the name and authority of a sovereign nation, they also tend to be more liquid and sought after than those from lesser-known private mints.
Popular Gold Bar Sizes
The most common unit of weight for precious metals is still the troy ounce, which is marginally heavier than the regular ounce and is roughly equal to 31.1 grams.
1 oz gold bars closely followed by the 10 troy ounces are the most common weights sought out by investors. However, with the expansion of the gold market, there was an increasing demand for a bigger variety of weights in order to meet different needs from investors.
For instance, 1 kilogram is equivalent to 32.15 troy oz, so it is usually better to buy a single 1 kg gold bar rather than 32 individual 1-troy-ounce ones, not only for practical reasons but also because the heavier the bar, the lower the premium it will typically draw, as we have previously explained.
So, in order to accommodate different investment sizes, gold bars come in more varieties than other precious metals, such as silver and platinum.
Mostly, you can find gold bars in these sizes to purchase:
- ½ gram (0.016 Troy oz)
- 1 gram (0.032 Troy oz)
- 2 grams (0.064 Troy oz)
- 5 grams (0.16 Troy oz)
- 10 grams (0.32 Troy oz)
- 1 Troy oz
- 50 grams (1.60 Troy oz)
- 100 grams (3.22 Troy oz)
- 5 Troy oz
- 250 grams (8.04 Troy oz)
- 10 Troy oz
- 500 grams (16.08 Troy oz)
- 1 kilogram (32.15 Troy oz)
Buying Gold Bars vs Silver Bars
It is perfectly natural for new investors (and seasoned ones too, for that matter) to ask themselves if they should buy gold bars or silver bars. And the answer to that question, of course, depends on many factors.
New investors might look at silver bars as a good option to start out dipping their toes in the precious metals market. But it is also possible for them to make a small, affordable purchase of smaller gold bars (e.g. ½ grams to 10 grams gold bars).
It all depends on the current state of the market. Both gold and silver tend to perform well during times of economic downturns, but silver prices could fluctuate more due to its high industrial demand.
Gold, on the other hand, tends to be less volatile and could be seen as a slightly better option to protect your wealth from inflation.
As a matter of fact, experts would suggest that the savviest choice could be to invest in both precious metals. The more diversified is your investment portfolio, the better chances you have of turning a bigger profit at the end of the fiscal year.
Make sure to track the current and historical spot prices for both gold and silver to determine which one is the better option for the moment. Our website features a live interactive chart that will help you better plan your investments.
Selling Gold Bars
There is always a time to buy and a time to sell. As we have just mentioned above, it is important to keep track of accurate gold spot prices in order to determine the best moment to sell your holdings and turn a better profit.
When you decide to liquidate, the question could be “who to sell gold bars to?”
If you are looking for a reputable gold dealer that offers a quick, easy and transparent buyback process with industry-leading rates, make sure to consider us here at SD Bullion.
We believe in doing business the old-fashioned way and offer you a quick and simple buyback process.
When you lock in your price to finalize the sale, you will receive from us a purchase order with the address of where to ship your precious metals. After a thorough, yet quick authentication process by our inventory team, your payment will be authorized and issued within 1-3 business days.
For more information regarding our buyback process, check our sell to us page here or contact us at 1-800-294-8732. Our team is constantly buying not only gold bars but a variety of other bullion products.
Storing gold bars at home can be a much easier job than storing silver bars and the main reason is that gold is currently around 60 times more expensive than silver and, thus, for the same investment value, the volume of space you will need for gold bars will be that much smaller when compared to what you will need for silver bars.
With respect to safety issues, only store your bullion bars at concealed locations, which does not necessarily mean a safe box, although owning one to keep your bars in would be of great help, as long as it is also concealed.
Also, be discreet about your belongings. Share essential information only and to people you know you can trust, but make sure to keep a sealed legal will with the locations of your gold bars (and the security code for your safe box, if you own one).
Watch the following video that we have prepared in order to help you consider where you can store your bullion products at home: https://youtu.be/1xJE1ik3So8
Nevertheless, some people will still feel more comfortable keeping their physical gold at a depository somewhere else. If you are one of those people looking for an affordable place to safely deposit your gold investment, we are pleased to announce that SD Bullion has a solution for you: SD Depository.
SD Depository is our non-bank, fully-insured segregated storage depository. We offer the lowest prices on the market guaranteed! Currently, Nnew customers get the first three months free of charge and an initial investment starting at $9.99 after that.
You can find more details regarding our provided services on our dedicated page for SD Depository.
If you want to learn more, here's the complete guide on How to Buy Gold Online
Gold Bars Q&A
What are the benefits of having gold bars?
Gold bars are considered a lower-risk investment. The gold spot price can be less volatile than stocks or other commodities and, thus, gold bars could constitute a good financial hedge against inflation, especially during a bear market. You can also turn a hefty profit if you liquidate your assets at the right time.
What is the gold spot price?
The gold spot price is the standard value for a certain amount of gold. It is usually proportionally determined for 1 troy ounce, 1 gram, and 1 kilogram.
How much is a gold bar worth?
That will depend on the bar size, the current gold spot price, and the dealer you are buying from or selling to. Dealers will add a small percentage over the spot price when selling their bullion products and that will constitute the “ask price”. When dealers are buying precious metals from investors, they will usually offer a little under-the-spot price. That is called the “bid price”.