Why Does Physical Gold Cost More Than the Spot Price?

Investing in physical gold is a smart move to diversify your portfolio and hedge against economic uncertainties. Several options are available if you want to buy this valuable precious metal.

The Four Different Types of Physical Gold for Investment Purposes

Unlike paper money, the value of gold rarely fluctuates. This makes it a stable investment option in the long term.

Let’s explore the different types of gold investment enthusiasts can consider and determine which suits your needs and goals.

  1. Gold Coins: A Popular Choice

Gold coins are a popular choice among new investors in the market. They are a valued collectible and offer a convenient entry point for those starting their investment journey.

Various gold coins are available, but two of the most sought-after pieces are the American Gold Eagle and the Canadian Maple Leaf.

The American Gold Eagle is widely recognized and valued for its beauty and historical importance.

It weighs one ounce but is only 91.67% pure, with the rest of its weight made up of other metals like copper and silver.One ounce of Canadian Maple Leaf is 99.99% pure gold.

  1. Gold Bars: High Purity, High Value

If you are looking for higher-purity gold, gold bars may be your better option.

Gold bars typically have a purity of 99.99%, making them a valuable addition to any investment portfolio. Unlike most coins, bars and nuggets do not have any extra metals mixed in, offering you the highest purity level.

  1. Jewelry: Not Worth the Investment

gold jewelry

While jewelry may seem like another attractive investment option, it may not be ideal.

Jewelry tends to be more expensive compared to the purity you’ll receive. Manufacturers also use different alloys to mix the gold and adjust the color, which can affect the purity.

Unless you buy a costly 24K piece of jewelry (99.90% pure), buying jewelry as an investment is not worth it.

  1. Diversify with Gold ETFs and Mutual Funds

Lastly, ETFs (Exchange-traded Funds) and mutual funds are excellent types of gold for investment purposes.

Gold ETFs allow you to invest in this precious metal without physically owning it, providing easy liquidity and flexibility. On the other hand, gold mutual funds pool money from multiple investors to invest in various gold-related assets.

Suggested Reading on Physical Gold Investing

Final Words

When investing in physical gold, you must choose a type that aligns with your goals and preferences.

Gold coins like the American Gold Eagle and the Canadian Maple Leaf are popular choices for new investors. However, they have slightly lower purity compared to gold bars.

Jewelry, while attractive, is generally not the best option for investment purposes due to the extra alloys used. You can still consider it an investment option if you appreciate jewelry’s craftsmanship and aesthetic value.

Lastly, for diversification purposes, consider exploring gold ETFs and mutual funds. Both options allow you to invest in this precious metal without the hassle of storing and securing physical gold.

It is always advised to consult with a respected gold dealer or financial advisor before making any investment decisions. Happy investing!

Tim Schmidt


Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started IRA Investing to share his expertise in using his Self-Directed IRA for alternative investments. His views on retirement investing have been highlighted in USA Today, Business Insider, Tech Times, and more. He invested with Goldco.