Bars, Rounds or Bullion Coins? Making the Right Choice For You
Owning Precious Metal bullion holds a unique place in the investment world. Unlike stocks or bonds, Gold and Silver bullion can be held, transported and physically passed to family members and beneficiaries. While bars of Gold are indeed a thing of beauty, they also can be reliably stored for years without damage, unlike fragile painted works of art that may disappear in an instant, destroyed by floods or fire. Bullion can be purchased in three different forms: bars, rounds and coins. Making the right choice for your investment portfolio is easy when you know the differences between the three available product types.
Designed to replicate the look and feel of government-issued coins, bullion rounds are minted by private companies and carry no face value. While they look a lot like currency, these flat, round pieces of bullion are not meant for circulation. They are typically the most affordable way to get started in Precious Metals collecting because their value is derived exclusively from the content of the Gold, Silver, Platinum or Palladium contained within. The term “bullion” is actually derived from an old French word meaning“boiling.” The worth of a bullion round is determined solely by the “melt value” of the Precious Metal. Because a private mint strikes each piece, you can find an eclectic variety of designs, from animals to holidays to pop culture icons. These fun motifs can be especially appealing to people who want to display their investments at home or teach children about the benefits of purchasing Gold and Silver.
While private firms produce rounds, bullion coins must be struck by sovereign governments. Additionally, while a bullion coin gets most of its value from its content of Precious Metal, additional factors can add premium value to coins. Because government institutions issue these coins, some investors have a greater sense of trust in the authenticity and are willing to pay a bit more than the current spot price of the metals. Although not intended for circulation, Silver and Gold bullion coins are stamped with a monetary amount by the issuing country and are guaranteed to retain that value at the central bank of that country, even if the Precious Metal content loses value.
Bars of Gold are what many people imagine when they hear the word “bullion.” They are strikingly attractive objects, recalling scenes from countless movies and legends. Available in many shapes and sizes, a bullion bar can be struck by both private and public institutions, so a solid knowledge of Precious Metals investing is vital before you make a purchase. Gold and Silver bars are valued almost exclusively for the melt value of their content, although some people will pay a slight premium if a trusted government authority produced the bar. Privately minted bullion bars traditionally offer the best price-per-ounce to purchasers.
Investing in Bars of Gold
To build a portfolio of stable investments and hedge against inflation or economic volatility, investing in bars of Gold and other bullion is a valuable tool. Three factors to consider before purchasing bars made with any type of Precious Metal include security, transportation and authenticity. Keeping a small collection of Silver coins locked in a safe at home is generally considered safe, but Gold bars will require tighter security simply due to their increased acquisition price. Depending on the size of your purchase, you may even need to rent storage space in a dedicated facility. Transportation is a factor when transporting your bullion internationally. Each country has a different set of laws on Precious Metals entering or exiting their borders, so carefully research both the origin and destination. Finally, while counterfeiting technologies have advanced in recent years, authenticity remains a top concern for any Precious Metals buyer. Purchase only from a reputable dealer and remember that if a deal is too good to be true, if often is and you should proceed with caution.