If you’ve been thinking about investing some of your hard-earned money into gold, as so many people seem to be doing these days, you may be wondering what form of gold bullion you should purchase. That is, should you buy bars or coins?
Ultimately, the decision is up to you, although there are a number of facts and details that may inform your decision, and that will likely make it an informed decision.
But first things first: It’s crucial to understand that while most people think only of gold bars when they hear the word ‘bullion,’ gold bullion coins certainly exist as well. Bullion, just to be clear, is simply a refined and stamped weight of precious metal.
So if you’re planning on purchasing gold primarily as an investment—and assuming you prefer coins to bars—you’ll want to steer clear of ‘collectible’ gold coins, and instead make sure that the coins you’re buying are indeed actual bullion.
Here are a few questions to ask yourself and mull over if you’re not sure whether the bullion bar or bullion coin route is the best for your situation:
• Ease of Liquidity: Because they come in smaller sizes, bullion coins are naturally more liquid to buy and sell than bullion bars. However, bullion bars are advisable for manufacturers who deal with gold regularly (in the electronics industry, for instance), as this is a much more cost effective-way to buy.
• Premium Value: Bullion coins, as well as pre-1933 gold coins, carry a high premium over their gold melt value. They also track the gold price and have good international liquidity. That makes them good choices for capitalizing on price movements.
• Privacy in Purchase and Sale: Bullion coin sales to dealers are exempt from IRS dealer reporting requirements (except for the Canadian Maple Leaf coins, South African Krugerrand coins and Mexican Liberated coins, when they are sold in 25+ ounce allotments). Bullion bars sold in kilo allotments or more require IRS dealer disclosure.
• Legal Tender: Technically, bullion coins are acceptable legal tender and are enforceable in private buy and sell contracts, unlike bullion bars.
• Customs Duty: Gold coins with legal tender face values, as well as government-issued bullion bars, are easier to transport internationally and may be exempt from taxation.
• Currency Crisis Hedge: Gold coins, by virtue of their liquidity and their high premium, make them a good hedge against financial uncertainty.
• Counterfeit Susceptibility: The smaller the bullion, the harder it is to counterfeit. Bullion bars are easy to fake, and some are sold hollow inside. Gold coins are harder to fake, and it’s easy to test whether what you have is real.
So what does all this mean for you, the potential gold bullion buyer? To put it briefly, it means that unless you’re buying in significantly large quantities—unless you’re very wealthy and plan to buy substantially large amounts of bullion, in other words—you’ll be better off purchasing your gold bullion in the form of coins. They come in smaller denominations, they’re easier to store, and they’re almost always easier to sell.
If you’re interested in buying gold bullion coins, pay us a visit at Doylestown Gold Exchange, and we’ll be more than happy to show you what we have in stock.