Physical gold is a traditional but excellent investment option. Mostly, physical gold is bought in coins, or bars from “gold stores near me.” Even in the form of coins, gold is precious. However, it does not derive its value from its purity. Gold coin is an alloy of silver or copper to which there is an addition of overhead charges, including making charges, design charges, and any other charges the manufacturer may add. So, at the time of sale, we will deduct all these additional charges and the price of the alloy metal. And you will earn returns only for the gold content in the bars and coins.
Bars and Coins are better than jewelry for investment returns.
Gold coin as a collectible from a premium brand or an antique derives its value over and above the face value or value of gold content in the bars. The same applies to gold coins too. Many gold coins in circulation derive their value from their rarities, such as the year of minting, unique design, or other aspects that make the coin unique.
However, investment in the rare gold article can be expensive, and one must have significant capital to invest. This may become expensive, and it may be wiser to diversify one’s savings to protect their investments.
Buy bullion gold for investment.
Bullion gold is physical gold that we manufacture especially for investment. We generally cast it in the form of coins or bars and mostly has .999 purity. Gold is a haven investment, and even today, it still holds a stable price position compared with currency or other tradeable goods. That is why governments, banks, financial institutions, HNIs, and businesses store some of their wealth in the form of physical gold.
Individual investors also have many alternatives for diversifying their portfolio with a bullion investment. One can buy 1 gram gold bars to begin investing and gradually add gold coins and bars to their portfolio to expand their investment.
Physical Gold as an investment portfolio hedge
The famous saying amongst successful investors is – do not put all your eggs in one basket. While everyone invests in shares, debentures, currency, Futures & Options, and commodities, the most stable, low-risk investment alternative is gold. Over the years, gold prices have risen conservatively but steadily. Even when the rates fall, it is marginal, and it does not take long for the precious metal prices to bounce back. Only real estate investment can give better returns. However, real estate investment is expensive. When you don’t have capital of that size, it is viable to choose to buy 1 gram gold bars.
Also, the other investment classes have high risk and high reward mark-ups. So, to hedge one’s investments, storing some of your wealth in the form of gold helps.
One can purchase gold in a non-physical format as gold ETFs and bonds. One can also invest indirectly by buying shares of gold manufacturing companies. Gold coins are trendy in their physical format because they come with unique designs and different weights. As gold bars, in their heavier weights, the bricks of 1 kg or above are generally purchased by HNIs and institutions buyers to save some of their wealth on a more tangible asset.
In smaller sizes of .1 gram for 100 grams, gold bars are accessible for individual buyers. You can buy gold bars and coins from “gold stores near me” or online gold dealers.
Which gold bullion to purchase?
Gold coins and bars are manufactured by world-renowned mints and national banks. In the US, the US Mint manufactures the famous American Eagle coins. These are the most widely circulated, and there are rare editions of the American Eagle that are highly valued among collectors. There are international mints the recognizes globally, such as Pamp Suisse, Credit Suisse, Royal Bank of Canada, Perth Mint, and People’s Bank of China, to name a few.
For gold coins, there are famous designs such as Lady Fortuna, The Chinese Panda, Canadian Maple Leaf, South African Krugerrand, and Perth Mint’s Kangaroo designs, among others. Gold bars are not known for their designs but for their gold content, which is why it has lower making charges and premium cost compared to gold coins. The larger the size of the gold bar, the lower its overhead premium rate.
You can buy physical gold in gold bars and coins online or from physical stores. The US Mint publishes the complete list of authorized gold dealers on their website, and one can be assured of buying genuine articles from these dealers. Also, at the time of sale, one can resell it to the dealer and get the current market rate for their holding.