Why are gold coins cheaper than gold bars?

For example, a larger gold ingot will have a lower manufacturing cost than a smaller gold ingot. In general, the premiums of gold bars tend to be lower than those of gold coins of the same weight and fineness. Why? It all comes down to production costs. Gold coins can be more expensive to produce than gold bars due to their intricate design, emphasis on condition and appearance, and therefore higher labor and machining costs.

In addition, the price of a gold ingot is mainly based on its weight. In the case of some gold coins, such as certified ones, the rarity and grade of the coin are also taken into account in the final price, so the gold content is not the only factor that influences the final price of the coin. Gold bars tend to be cheaper to manufacture compared to gold bullion coins. Therefore, they have a lower premium compared to gold bullion coins.

The larger the gold ingot, the lower its premium. A one-kilo gold ingot will have a lower manufacturing cost than 10 x 100 gram gold bars. So what justifies buying gold coins? First of all, even though the premiums are lower on bullion, if you really like the look of gold coins, go ahead. Similarly, gold coins are much easier to obtain as fractions (less than 1 ounce of gold).

Some investors consider adding up these smaller purchases and exchanging them for a larger gold coin. An important advantage of gold coins is the ability to sell them in the blink of an eye and at a slightly higher premium than most gold bars. On the contrary, the key advantage of buying physical gold (such as ingots and coins) is that you own the gold. In addition, you own an asset that can be stored outside the financial system, reducing counterparty risk.

Basically, this is a misunderstanding of what gold bars are. The common perception is that rectangular gold bars are the most cost-effective and perhaps the only available form of gold bars. The same idea is that round pieces of gold (“coins”) are not really gold ingots. There is a misconception that “coins have a limited supply, are expensive and perhaps, to a certain extent, are collectibles”.

So, from an investment perspective, buying gold coins means you'll get less gold for what you pay. Some gold coins are minted by sovereign governments that guarantee the gold content, weight and purity of each coin. When time is tight, buying gold bars can be the fastest route to large-scale gold ownership. These are gold bars “delivered in London”, approximately 400 troy ounces in size, refined and melted by various private refineries around the world and accepted for “delivery” in London and other major gold ingot markets.

While gold as a precious metal is often considered a reliable and much better investment than paper currency, it can be quite difficult to assess the best value of gold coins. It's important to note that there is no right or wrong answer when it comes to choosing between gold coins and gold bars. If you want your gold to be more than just a financial investment, maybe you're even starting a collection of gold coins, then the coins are for you. If you plan to hold physical gold for a long period of time without intending to sell part of your investment over time, gold bars will be the best option for you.

Therefore, both gold coins and gold bars have their advantages and it all comes down to your personal goals and preferences as an investor. Gold bars should be priced very close to the spot price of gold, with only a small additional margin on the part of the mint and the trader. While gold bars offer you the best option if you want to preserve your wealth, gold coins offer the best value when it comes to selling. Like coins, gold bars are portable, private and liquid, although their advantages are often less well known than gold coins.

Together, gold bars and gold coins can work hand in hand to strengthen your precious metals portfolio against life's many uncertainties and provide you with peace of mind. The British sovereign gold coin and the gold Britannia coin are examples of this, and new annual versions of the coin are minted every year. Gold coins will have slightly higher premiums on the spot price than gold bars, due to additional minting costs and the commemorative nature of their value. .