Gold Bars: 4 Factors to Consider When Buying

Gold Bars: 4 Factors to Consider When Buying

I met this morning with a nice gentleman that was selling a loose 100 gram gold bar.  He had saved up for quite a while to purchase the gold bar and was liquidating it for some short term cash needs.  This was his first purchase of gold bullion, so he had some questions as to if he made the right decision or not.  As we talked through some of the key aspects of buying and selling gold bars or gold bullion, we came to the conclusion that he could have made a better decision.  In this short piece, we’ll share with you some of the key takeaways from our discussion in hopes that you’ll make the best decision when buying or selling precious metal bullion and bars.

 

Recognizable

An important point to keep in mind is that most individuals are more comfortable purchasing bars that are recognizable as opposed to those that are not.  This means that you should only consider gold bars that someone else will want to purchase in the future.

There are plenty of recognizable bars on the market today.  Some of the premium brands include:

  • Pamp Suisse
  • Credit Suisse
  • Perth Mint
  • Royal Canadian Mint
  • Valcambi (just to name a few)

 

Other name brand, more generic gold bars include APMEX, OPM, Elemetal, Sunshine Minting, Republic, etc.  Premium brand gold bars will typically sell at an additional premium, but the market may be a bit broader and more liquid for these bars when the time comes to sell them.

 

Liquidity of Gold Bars

As alluded to above, the most liquid bullion and bars are those that are most recognizable.

While some gold buyers plan on purchasing bars with the intent of keeping them forever, a majority of individuals at some point in time will sell their bars.  The best way to ensure that you have as broad of a market as possible when the time comes to sell your bars is to purchase recognizable bars, such as those listed above.

Other factors that you should consider, and that affect the liquidity of bars, are the size and the condition, which we’ll discuss in further detail below.

 

Size

They say that “size matters,” and that’s also the case with gold bullion, but it may not be quite what you think.  Bars come in various sizes, including 1 gram, 5 gram, 10 gram, 20 gram, 1 oz, 50 gram, 100 gram, 5 oz, 10 oz and a kilo.  With all of these options, how do you determine which one is best?

It turns out that smaller and larger sizes are in less demand than standard sizes, such as one ounce, and can be slightly more difficult to liquidate.  Typically the most popular  bars are the one ounce variety, which is also the case with gold coins.  Interestingly enough, some of the large online coin dealers will sell the fractional or off-size gold bars at a slightly higher premium than one ounce gold bars.

That’s not to say that you should avoid fractional or off-size gold bars, but you should make sure that you’re paying a reasonable premium based on your ability to sell these items in the future.

 

Pamp Suisse Gold Bar with Assay

Condition

As is the case with gold coins, condition matters with respect to gold bars.  Ideally, we recommend that you purchase a gold bar that has been sealed and carded.  These are gold bars that are sealed in tamper-proof plastic packaging.  They typically include an assay number on the packaging that matches the assay number stamped on the bar, but that’s not always the case.  That’s not to say that you should avoid gold bars that are outside of a sealed package.

In fact, we purchase them all the time, as did this morning.  However, you should pay a slightly smaller premium for these bars.

 

Where to Buy Gold Bars

Buying gold in the form of bars or bullion is a lucrative financial decision. Gold bars are privately produced as opposed to government-issued, which makes them more affordable. While privately-produced, bars can’t be acquired directly from the producer by the public. Rather, individuals who are interested in gold bars need to work with a retailer or authorized dealer. In this article, we’ll discuss the potential outlets available to retail buyers.

Gold has recently made headlines due to a new all-time high and demand as a hedge against financial uncertainty. While it’s frequently touted as a solid investment option, there are a limited number of outlets available to the public. The most popular options available include coin dealers (local and online), auction sites, pawn shops, and jewelry stores.

Online Coin Dealers

Online coin dealers are a good option for individuals that don’t have a coin shop nearby or who live in a state that charges sales tax. Some online coin dealers are well-established and have a good track record, while others are flight-by-night companies or have a history of substantial delays or failing to fill orders. It’s important that you thoroughly research an online coin dealer before placing an order for your gold bars; otherwise, you may be out a substantial amount of money.

Local Coin Dealers

A local coin dealer is oftentimes the best choice, especially if you’re located in the vicinity of a coin dealer and are in a state that doesn’t charge sales tax on precious metals purchases. Most coin dealers realize that investors have the option to purchase gold bars online and should be willing to provide competitive pricing. However, it’s important to keep in mind that online coin dealers do substantially more business than local coin dealers, so the price at which you can purchase a gold bar from your local coin dealer may be slightly higher than from an online dealer. The benefit of buying from a local coin dealer is that you take immediate possession of the gold bar at the time of the transaction. Additionally, local coin dealers offer a safe, secure, and comfortable environment to allow for privacy and anonymity.

Auction Sites

We occasionally meet with customers who purchase gold bars from auction sites only to find the item that they purchased is counterfeit. Unless you suspect this is the case early enough, you may not have the option to return the bar for a refund. If you’re purchasing from an auction site, be sure that you purchase only from recognized dealers or from a site that thoroughly vets the products and offers a generous return policy.

Pawn Shops & Jewelry Stores

Many pawn shops and jewelry stores also sell gold bars, but not all of these stores are experts on gold bars. In other words, unless they’re familiar with how to test and authenticate gold bars, they may unknowingly sell items that are replicas. If you’re considering purchasing from a pawn shop or jewelry store, have a list of questions available for the shop. If they don’t answer all your questions to your satisfaction, continue looking until you find one that does.

Atlanta Gold & Coin Buyers is not only metro-Atlanta’s leading coin and bullion dealer, but we also do a substantial amount of online business through our mail order option. Whether you live locally and schedule an appointment for an in-person appointment or are located outside of metro Atlanta, we offer the same great service to Georgia residents only. Contact us today at 404-236-9744 to book an appointment or to discuss our online/mail options.

 

In Summary

We highlighted several factors that should be taken into consideration before you buy gold bars.  It’s important to purchase gold bars that are recognizable, which means sticking with premium or name brand gold bars.  This will give you the best opportunity to maximize your payout when the time comes to sell your gold bars.  Other factors that affect the liquidity of bullion and bars are the size and condition.

When possible, stick with standard size bars, such as one ounce.  Fractional and larger bars are perfectly fine, but you should pay a rate that is commensurate with the liquidity of these items.  Lastly, the condition of your gold bars matter.  If you have the option of buying a carded and assayed bar at the same price as a loose bar, always go with the former.

Again, don’t completely discount bars that are out of the packaging; just make sure that you’re receiving a slight discount for these items.

 

Call us today if you are looking to purchase or sell your bars or coins. At Atlanta Gold & Coin Buyers we offer competitive pricing and convenient appointments. You can view what we pay on our webpage and also our current inventory. Give us a call or email today if we can help you with your precious metal needs.

Atlanta Gold and Coin Buyers

Tony Davis
Tony Davis