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. A gold coin is only worth above the price indicated to the extent that the person buying it is willing to pay. A merchant with an especially brilliant collection of rare gold coins might not pay as much for rarer issues.
Plus, if you want to buy a golden maple leaf online, you can expect to pay less than at a local store. In addition, the qualities of coins in circulation are difficult to assess accurately, so do your research before buying or selling gold coins in circulation. Due to the design and manufacturing costs of minting the coins, gold coins have a slightly higher premium compared to their same unit size as gold bars. So, from an investment perspective, buying gold coins means that you'll get less gold for what you pay for.
However, the premium will decrease if you buy in quantity (volume discount) and you will pay a cheaper price of gold per gram. This is where it gets interesting. Not all gold coins and all gold bullion products are the same. There are many factors to consider, such as the premium you pay.
Gold coins tend to have a higher premium per ounce compared to gold bars. Gold coins are legal tender and are minted by a sovereign government mint, while gold bars, for example, are minted by a private mint. Sales tax is another factor to consider: some states will impose taxes on one or the other and sometimes on both. The price of a gold coin is not the price of gold, just as the price of a bag of chips is not the price of potatoes.
The production of a gold coin entails manufacturing costs, which translate into a percentage premium on the price of the coin (above the spot price of gold in force in the wholesale market). As a general rule, the lower the weight of a physical gold (or silver) product, the higher the premium above the spot price. On average, a gold coin weighing one troy ounce sells at a 4% premium over the spot sale. Coins that weigh less than one troy ounce have a higher premium, because their manufacturing costs are higher relative to the value of the coin's gold.
On the other hand, you can opt for gold coins if you appreciate the cultural and historical value of these coins, as well as their monetary value as an investment. In addition, a small local store will be less likely to buy one large gold ingot instead of several 1-ounce gold bars. The idea here is that the value of gold bars is in the gold itself, and that can only change based on real-time spot gold prices. Of course, gold bars offer the best value when buying, but they don't give you the flexibility you want when you want to sell.
Any additional cost, such as shipping, also translates into a higher premium for a silver coin than for a gold coin of the same weight. In fact, the minting of gold coins is almost always limited to expensive coins of no more than one ounce. If you are from the United Kingdom and plan to pay Capital Gains Tax (CGT) on your investment, British gold coins should be your first choice. It's important to note that there is no right or wrong answer when it comes to choosing between gold coins and gold bars.
You can choose gold bars as an investment option if you care less about the sentimental value of gold and more about your investment premiums. Whether you decide to buy gold coins or buy gold bars, you'll appreciate the protection and peace of mind you'll instantly get once you take possession. Buying, for example, a 10-ounce gold ingot is actually cheaper to produce, even before shipping and handling. International Precious Metals is one of the best online coin dealers available and has been at the forefront of numismatics for nearly 20 years.
We provide guidance on precious metal IRAs and offer assistance in purchasing coins for any topic related to numismatics in the industry. .