Many investors are realizing gold bars are an excellent investment. There are two basic options, traditional gold bars and gold coins. There are two factors every investor should understand before a choice is made between adding precious metals or gold bars to their portfolios. First, the difference between an investment in coins and bars is substantial. Second, not every investment in gold bars is equal. The first step is finding gold bars to purchase due to the wide range of financial benefits. The second step is selecting the gold product to purchase.
A common question is what makes gold bars a solid investment. The answer is simple. Gold is an exceptional investment hedge for volatile assets such as United States ETFs and equities and far more reliable than national currencies. No matter which type of gold is selected, this will not change. The most trusted gold bar producers in the world currently include the Perth Mint, Johnson Matthey and Engelhard, Credit Suisse/PAMP and the Royal Canadian Mint. Other reputable bullion manufacturers include a variety of government mints, Umicore and Metalor.
Gold quarters provide investors with a lot of value when located. Gold bullion quality is critical, especially if the investor is purchasing gold bullion for a retirement vehicle such as a 401k or an IRA. Minimum requirements for purity have been established by the Internal Revenue Service for all IRA-approved bullion. To be eligible, the bars must be incredibly pure. This means no investor can afford to take chances when adding gold to a retirement account or IRA. If specific requirements are not met, the gold is ineligible.
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Top 5 Gold Bars for Investors
The top 5 gold bars for investors are detailed below according to purity, worldwide recognition, fineness and liquidity in no particular order. All five have received approval from the IRS for IRAs and can be included in tax-advantaged retirement accounts.
Credit Suisse Gold Bars
Credit Suisse Gold Bars are developed by the Credit Suisse Group, an international financial conglomerate. The bars are manufactured by ProduitsArtistiquesetMétauxPrécieux (PAMP) or artistic precious metals products. These gold bars represent one of the most popular investments worldwide. The result is a lower premium ensuring investors can easily guarantee a high-quality investment. These bars have received approval for IRA investing due to a gold fineness of .9999. Investors only purchasing one gold bar should consider Credit Suisse Gold Bars.
Johnson Matthey Gold Bars
This is a British company with a well-established reputation for producing metals. In 1946, Johnson Matthey was elected the official producer of silver coins in the United Kingdom. Their popularity has continued to grow ever since. Johnson Matthey Gold Bars are available in a wide range of shapes, designs, sizes and degrees of refinement. As opposed to using the expensive process for minting adopted by so many bullion producers, Johnson Matthey Gold Bars are generally a cast gold ingot. This decreases the premium for investors. All IRA-approved bars have a gold fineness of .9999. These bars are trusted and renowned worldwide and an excellent addition to any portfolio.
Perth Mint Gold Minted Bars
Perth Mint is a world-famous Australian gold bar manufacturer. The gold weight of Perth Mint Gold Minted Bars is between one-half and 1,000 ounces. The majority of investors find purchasing branded 1,000 or 400-ounce gold bars prohibitive. The weight denominations are five, 10 and 20 grams and one and 10 ounces. Perth Mint Gold Minted Bars also include a hopping kangaroo with a tamper-proof display card. This means they are more attractive than a lot of other gold bars. As a renowned and trustworthy institution, the Perth Mint has spent decades manufacturing gold bars of exceptional quality.
Valcambi Gold Combibar
The Valcambi Gold Combibar offers investors a 100 percent unique design for gold bars. Valcambi is a Swiss company introducing 50-gram bullion bars in 2011 to fit into a wallet similar to a credit card. Every bar can be divided into 50 separate one-gram bars and can be broken apart easily. This means the Valcambi currency option is universally accepted, divisible and portable. Due to a gold fineness of .999, the Valcambi Gold Combibar has received IRA approval. This gold bar is unique and ensures spending gold is simpler.
Engelhard Gold Bars
Engelhard is a metals company based in America, established more than 100 years ago and renowned for silver and gold bullion. The production of Engelhard Gold Bars is not at the same level as other types of bullion. Many investors are attracted to the occasional odd shape and increasing rarity. The majority of Engelhard Gold Bars have a unique serial number marking and are available in minted and cast form. Englehard is an excellent option every investor should consider.
What Makes Gold Bars a Solid Investment?
Central banks hold gold and precious metals in reserves. The question is why? Gold bars are more suitable for bulk investing and storage than gold coins. Gold bars do not require nearly as much work to refine and securing and stacking them is easier. A basic gold bar is simply an ingot or brick stamped and refined with important details including the manufacturer’s name and logo or year of mintage, gold purity and weight. The complexity of some gold bullion results in a more difficult manufacturing process. Investors can gain a significant advantage with cheap production and a simple design.
In most instances, gold bar premiums are extremely low. Gold bars are an ideal option for any investor not interested in numismatic considerations, collectability or design. Investors will generally pay less for investments in bars as opposed to coins. For large-scale investments, this is extremely significant. In comparison to gold coins, gold bars can be more difficult to purchase and sell or less liquid. This means investors willing to hold bullion for significant time periods are better off with bars than an investor interested in selling their investment when the price of gold spikes.
What is Gold Bar Portfolio Insurance?
Although the majority of the population purchases insurance for their vehicles and homes, some do not understand the importance of insuring their retirement savings. This savings is at the very least as important as other assets. Still, some investors are asking what is gold bar portfolio insurance. Gold bullion bars provide investors with a type of insurance for their portfolios. This is not a tool to increase wealth. Insurance insulates investor portfolios when there is a market shock. A massive sell-off resulted due to the stock market crash of 2020.
This included equity values in the real estate, hospitality, petroleum and entertainment sectors. Due to the liquidation of assets by institutional and retail investors, fears of a recession crushed investor sentiment. This resulted in 34 percent of the value of the S&P 500 being lost from March 5th until March 23rd of 2020. Millions of investors sold due to blind panic during the bear market at this time. Many retirements were placed in jeopardy and some investors lost financial security for the rest of their lives.
The good news is the exchanges do not list the gold market as a security. This means the market is resistant to impetuous investor decisions and not nearly as volatile as investing in the stock market. When investors were losing money in the stock market in 2020, the price of gold remained stable. The price per ounce at the year open was $1,520. The high for the year was $2,058 with a $1,773 average. Since the gold market is relatively stable, investors interested in managing risk and holding onto more wealth during a market turndown are turning to gold.
Purchasing Gold Bars for Investments FAQs
Q: What does it cost to purchase a gold bar?
A: The COMEX market live spot price determines the cost of gold bullion. This price constantly fluctuates. At this time, the cost of gold bars is $64,350 for one kilogram or $77 for one gram. The basis is the $1,705 spot price per troy ounce.
Q: Do investors purchase gold bars?
A: Many investors include gold bars as a small percentage of their portfolios. Precious metals and gold are good tools for risk management. Pricing data obtained from the last five years is an indication gold is moving upward for the short to medium term. During the last few decades, the value of gold has generally increased.
Q: How much should be invested in gold bars?
A: The amount invested in gold bars and precious metals should be a reflection of the time remaining until retirement and risk tolerance. Overall, five to 20 percent of an investor’s wealth is dedicated to gold. Investors more concerned with risk, usually dedicate more of their portfolios to precious metals and gold.
Q: How can gold bars be purchased online and is more information available?
A: The Gold IRA Guide offers a lot of information and resources to help investors purchase gold coins or bars for retirement savings accounts. You’ll find that I’ve done a lot of research on this topic and have a few recommendations you should definitely look into.
Q: Can gold bars be purchased from a bank?
A: Physical gold bullion is not available in the United States from local banks and financial institutions. Central banks in certain European countries accept orders for gold coins and bars via retail banks. In North America, investors must place orders at specialized vendors approved by the IRS.
Gold Bars in an IRA Investment
Gold bars in an IRA investment are available through self-directed Gold IRAs and 401ks. This offers investors tax advantages to protect their portfolios from political turmoil and financial risk. In the past, gold bars could be purchased directly from bank vendors. Today, the investment must be placed with an IRS-approved and qualified vendor. More information is available through any of the precious metals IRA firms. This ensures an average retail investor can make an investment in gold bars simply and easily. Investors should make certain the company is reputable before proceeding.
Benefits of Investing in Gold Bars
There are numerous reasons to invest in gold bars in addition to the potential for an increase in value. Gold offers investors advantages not available with the majority of other types of investments such as stocks and bonds. The benefits provide the investor with power and protection from a volatile market and inflation. Some of the best benefits are defined below.
The Power of Gold Currency
Although gold is no longer considered a currency, it has been perceived as money for longer than any currency throughout history. Gold has been a representation of value for a minimum of 3,000 years. Even the British Pound Sterling has not been around as long despite being established approximately 1,200 years ago. Throughout the history of the United States, gold has been used as a type of currency. The promise resulting in the production of currency is to serve as a source of value for a long period of time.
This promise is fulfilled by gold more than any fiat currency in the world. In comparison to gold, all major currencies developed by governments have lost purchasing power due to inflation. The best source of long-term value since 1900 has been physical gold. There have been periods of time where the value of currencies increased more than gold. Despite this, gold has increased in value more in the long term. This is the reason wealthy investors generally hold a store of gold.
The price of gold will fluctuate, but the value remains. In ten years, the purchasing power of major currencies will most likely have decreased. The same is not true for gold. The nature of every paper currency is to lose value as time passes. Investors can save thousands or tens of thousands in paper currency in a brokerage or bank. Over time, purchasing power will still be lost.
Gold Bars as a Tangible Asset
Purchasing physical gold is different than almost any other asset because it can be held in the hand. Time, water and fire are unable to destroy physical gold and the maintenance necessary for other commodities is eliminated. Since the amount of available gold is limited, it has a value not found with other investments or assets.
No Obligations or Promises Required
A paper contract is unnecessary to make gold bars whole. No contractual obligation requiring a third-party or middleman is necessary. The reason is gold is the only asset not connected to the liability of another entity. This is critical since when the next crisis occurs or another bubble pops, gold will still be standing. When an economy or country takes a wrong turn, gold is an extremely powerful asset to have in a portfolio.
The price of gold will never drop to zero. In a history spanning more than 3,000 years, this has never occurred. When an investor requires money, gold can always be sold because the value remains. Gold is incapable of going broke or bankrupt or defaulting on an obligation or a promise.
The Confidentiality and Privacy of Gold
The majority of assets are not confidential or private. Gold bars are one of few assets capable of providing both. Investors can also purchase gold anonymously. This is not possible with most investments. Almost every single investment currently available is public, period.
The Portability and Liquidity of Gold
Gold is an excellent investment because it can be easily transported and sold very quickly anywhere in the world. Gold is extremely liquid and can be sold at many different locations. Almost every bullion dealer on the globe recognizes the value of a Gold Eagle. Gold can be sold through online dealers, pawnshops, local coin establishments and private parties. The seller decides whether to trade for goods or sell for cash. The process of using a brokerage account to sell stocks generally requires more time.
In most cases, only three business days are necessary to complete the transaction and have cash transferred to the bank account of the investor or a check mailed. Other collectibles such as artwork require more time because the customer base is so much smaller. The investor will most likely have to pay a large commission as well. There are no extra steps to take with gold because it can be sold on the spot. The liquidity ensures gold can be taken virtually anywhere on the globe and sold. If the investor does not want to cross borders, the gold can be transported.
The Low Maintenance and Easy Storage of Gold
Investors do not have to be concerned regarding the cost of storing physical gold. Although there is a fee for professional storage, the charges are generally very low. The cost of a small storage bill does not include the complexity and aggravation of real estate. Gold is simply stored until needed with no complex tax issues, calls from tenants requiring repairs or late payments from renters.
If the investor is interested in securely storing gold in their home, they can do so. A large investment can be stored easily in a small space such as a home safe. A $50,000 investment in gold will fit in the investor’s hand. When the price is more than $1,200 per ounce, storage in a safety deposit box offers more value for the money than paper dollars stacked in piles.
No Specialized Knowledge is Required
The average person is unable to determine if a diamond is real or which painting is a forgery. Figuring out which pieces of antique furniture, baseball cards or stamps have the most value can be a nightmare. None of this is necessary with gold bars. The investor does not need to have any special equipment, training or skills to recognize a gold bar. Although some investors are interested in purchasing rare gold coins, many consider this to be the collector’s world and tend to avoid this type of asset.
There is no speculation to determine if the asset will one day be more valuable than the purchase price. An investment in gold bars is a shield against inflation and protection from economic and political crises. The purchase is straightforward and transparent with help available when needed.
Protection from Governments and Politicians
Just because governments can overreach does not mean it is a conspiracy. Governments do have the power to confiscate funds, garnish wages and freeze bank accounts. The victims of any one of these actions most likely did not have any warning. During a financial or economic crisis, the potential for these actions increases significantly. Government enforcement becomes a lot more aggressive when revenue is desperately required. Some governments will pass new regulations and laws to suit their current needs.
These types of actions have occurred with nearly every government throughout the course of history. In the event of a crisis, it will happen again. There are not many ways to protect investors from these types of actions. One of them is holding physical gold bars offshore. International diversification sounds complex, but storing physical gold overseas is not difficult. The process is no harder than opening either a brokerage or a bank account. The result is protection from the worst possible scenario. Even if this option is never used, it is an insurance policy against unfair or aggressive political actions.
Some investors eventually use their sales proceeds to make an investment in another option that was not available in their country at the time. Storing a portion of wealth outside of the investor’s political jurisdiction and banking system is a good option. Storing gold in a highly secure and professional vault is a straightforward, transparent and viable way to ensure success. This is not a way to gain massive wealth overnight. It is simply a way to achieve protection from government bureaucrats before any actions can be taken and to prevent investors from being caught off-guard.