With gold prices on the rise, investing in physical gold bars is becoming an increasingly popular option. You might be pondering, what is the best gold bars to buy? But with many sizes, purities, and brands to choose from, how do you know which gold bars are right for you? This comprehensive guide will walk you through all the factors to consider when looking to purchase gold bars for your portfolio.
The global gold bar market is projected to reach $94.73 billion by 2025, growing at a CAGR of 6.7% from 2018 to 2025. As of 2020, approximately 186,700 tons of gold have been mined globally. With limited supply and increasing demand, the value of gold bars is expected to continue rising over the long-term.
Gold Bar Weights
One of the first things to consider when buying gold bars is the weight. Gold bars are produced in various standard weights, ranging from 1 gram up to 400 ounces. The four most common sizes are:
- 1 ounce
- 10 ounces
- 1 kilogram (32.15 ounces)
- 400 ounces
Smaller bars like 1 ounce provide more divisibility and flexibility when selling, while larger bars carry lower premiums per ounce. Consider your budget and intended holding period when deciding on weight.
Another major factor is the purity of the gold bar. While jewelry may be just 10-18 karats, most investment gold is .9999 fine or 24 karats. Common purities for gold bars are:
- 9999 – Considered “four nines” pure gold
- 9995 – “Three nines” gold, or 99.95% pure
- 9990 – 99.90% pure gold
- 9950 – 99.50% pure gold
Higher purities like 9999 carry higher premiums but offer more liquidity when reselling. If you prioritize maximizing pure gold content per dollar, 9950 or 9990 bars may be optimal.
When buying gold, it’s wise to stick with reputable refiners and brands known for quality. Some of the top names in gold bars include:
- PAMP Suisse
- Credit Suisse
- Perth Mint
- Johnson Matthey
- Sunshine Minting
- Royal Canadian Mint
These established brands produce gold bars to strict quality standards, giving you extra assurance about the bar’s purity and weight. The premiums are worth it for the trust and resale value.
Reputable gold bar brands incorporate security features like serial numbers, hallmarks, and holographic seals to verify authenticity and prevent counterfeiting. Be sure to look for the following marks when purchasing:
- Serial/certificate number
- Assay stamp certifying purity
- Brand hallmark or logo
- Date and origin stamp
Bars lacking these marks or looking irregular should raise red flags. Only buy from trusted sellers to ensure you receive legitimate gold bars.
Check current spot prices for gold, then compare premiums charged by dealers. Premiums may range from 3-10% for larger bars to 10-20% on small gold bars. Reputable brands carry higher premiums but offer peace of mind.
Also factor in shipping, insurance, and storage costs. Pricing out different options will help find the best deal based on your budget and needs.
Storage and Security
Since physical gold bars represent a valuable investment, proper storage is essential. Options include:
- Home safes – Secured in a hidden, bolted-down safe
- Safe deposit boxes – Check bank’s insurance policy
- Third-party vaults – Pay monthly fees but bars stored offsite
- Gold IRAs – Bars stored in insured depositories
If opting to store at home, be sure your homeowner’s insurance covers the full value. Also consider a high-quality safe, home security system, and secondary hiding spots to protect against theft.
Buying and Selling
Only buy gold bars from reputable dealers to avoid counterfeits. Well-established precious metals retailers include:
- JM Bullion
- SD Bullion
- Money Metals Exchange
When selling, you can trade back to the dealer or sell privately. To get the best price, shop around between dealers and try auction sites like eBay. Be aware of any transaction fees or capital gains taxes when selling.
Investing Through IRAs
For tax benefits and easy storage, many investors hold gold bars in self-directed IRAs like Gold IRAs or Bitcoin IRAs. These provide tax-advantaged growth while the gold is stored securely in vaults. IRA fees do apply but can be a smart option for long-term strategic investing in physical gold bars.
Choosing the optimal gold bars for your portfolio involves comparing weights, purity, brand reputation, security features, and cost. Focus on reputable brands like PAMP Suisse or Credit Suisse, store safely, and buy/sell through trusted dealers for the best experience. Gold bars can serve as a wise diversifier and long-term store of value alongside stocks, bonds, and other assets.