Whether you are new to investing in gold or not, deciding if you should invest in coins or bullion does require careful consideration. Here are a few points to think about to help you decide.
- The Premiums
A premium is an extra cost that is charged on top of the gold spot price and is attributed to handling, manufacturing costs, insurance, delivery, and packaging. Reputable dealers charge very small percentages, but the most effective way to keep your premiums at a minimum is to invest in gold bars. They attract a smaller premium compared to coins since they are larger in size and therefore have lower manufacturing costs.
- The Flexibility
Many investors prefer to invest in gold bullion with the aim of conserving wealth and then making a return on the investment when they plan to sell gold bullion with the best buyers. When it comes to larger bars, they offer the best value when buying, but not necessarily the best value when selling later on. Gold coins, though, have better flexibility when it comes to resale. There are a range of reasons where such flexibility comes in handy, for instance, releasing part of the investment for quick cash.
Some of the most popular gold coins that attract low premiums and are ideal for first time buyers include:
- The South African Krugerrand
- The British Gold Sovereign
- Half Sovereign
- Gold Britannia
- What’s Best for First Time Investors and Small Investors?
Both first time and small investors should look into coins and bars. While coins are the obvious choice for lower value investments, a 100g bar, for instance, is a popular starting point for many investors.
- What’s Best for Larger Investors?
If you are wanting to invest in larger sums in gold bullion, the decision tends to be less difficult or complicated as you will want to ensure you get the very best value for money along with maximum return on investment. In this case, it’s a good idea to invest in larger unit sizes or gold bars that will offer you the best value. What’s more, buying gold in volume can offer even greater savings as the unit price is usually reduced when you buy more than one bar due to the lower costs the bullion dealer incurs.
Wealthy investors should opt for a selection of bars and coins.
- What About Changing Premium?
Gold bullion coins, in particular, have previously demanded extra premiums depending on certain market factors. This is yet another factor you should take into consideration when investing in gold, where coins may well provide a greater return on investment, the bars will only really be worth the intrinsic value of the metal within.
How to Store Your Gold Coins and Gold Bars
Whether you choose to invest in a kilo gold bar or a couple of gold coins, the mass and size would be very similar, but one is easier to store than the other. The gold bar is a single unit, so it can be stored in a single location like a deposit box. But, thirty or so coins, for example, mean you can split your investment in, say, a deposit box, with family members, and hidden around the house.
Overall, which you decide to invest in will depend on how much money you want to spend, your storage solutions, and the return on investment you hope to get down the line.
Foto Credit: Pixaby/PublicDomainPictures
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