Gold Bars: 4 Things to Weigh Before Buying
Ralph Waldo Emerson is often credited with saying, “The desire of gold is not for the gold. It is for the means of freedom and benefit.” When this article was originally published, Atlanta Gold & Coin met one morning with a pleasant man who was selling an unsealed 100 gram gold bar. He had saved for a considerable period before purchasing it, then needed to liquidate it because of an unexpected need for cash. It had been his first gold-bullion purchase, and he wanted to know whether it had been the right choice. As the conversation covered several important considerations in purchasing and selling gold bars, also known as gold bullion, the conclusion was that he might have made a better choice.
Surprised?
At publication, The original article invited readers to continue for the choices this man might have handled differently and for the main points from that conversation.
Its purpose was to help readers make a more informed choice when a future need arose to buy or sell precious-metal bullion or bars.
Recognizable Gold Bars
One key consideration is that most people tend to feel more comfortable with bars they recognize than with unfamiliar ones. In practical terms, this meant considering only gold bars that another purchaser would likely want to buy later.
At the time of publication, many recognizable bars were on the market. The article identified these as among the premium brands:
- Pamp Suisse
- Credit Suisse
- Perth Mint
- Royal Canadian Mint
- Valcambi, among others
Other branded gold bars, though less familiar than those above, included:
- APMEX
- Heraeus
- OPM
- Elemetal
- Sunshine Minting
- Republic
Premium-brand gold bars generally carried an added premium, and the market could be broader and easier to access when it was time to sell.
Gold-Bar Liquidity
As noted earlier, the gold bars with the strongest liquidity are usually the most recognizable ones.
Although some buyers acquire bars intending to hold them indefinitely, most people eventually choose to sell. The article explained that recognizable bars, such as those listed above, were the best way to reach the broadest possible market and seek the strongest potential return.
Although purity was not ordinarily a concern with gold bars, certain bars produced outside the country might not be .999 fine. Unless a purchaser was a jeweler or acquiring scrap gold, the article strongly advised avoiding bars below 24 karat. For anyone uncertain whether a liquid resale market would exist for gold bars, it recommended staying with LBMA-approved gold refiners.
Beyond brand recognition, the article identified a bar’s size and overall condition as factors that could affect liquidity. Those two considerations are addressed next.
Gold-Bar Sizes
Have you heard the expression, “size matters?”
That idea can also apply to gold bullion, though perhaps not in the way a reader might first assume. The original article then presented the range of bar-size choices, from smaller pieces through standard sizes and much larger bars, and noted that each choice can involve a different resale consideration. Bullion bars traded in the retail market 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 kilogram, which is 32.15 ounces
With so many possible sizes, how could someone decide which fit best? The article cautioned that, for gold bars, a larger size was not necessarily a better size.
The article explained that both smaller and larger bars drew less demand than the standard one-ounce size and could be somewhat harder to liquidate, particularly the larger bars. One-ounce bars, along with one-ounce gold coins, were generally the most popular. Interestingly, some large online coin dealers sold certain less-requested gold-bar sizes at a slightly higher premium than one-ounce bars.
This did not mean fractional or nonstandard-size bars should be avoided. Rather, the article said purchasers should consider whether the premium was reasonable in light of their ability to sell those items later, ideally at a profit.
Gold-Bar Condition
As with gold coins, condition mattered for gold bars. The article ideally recommended purchasing a sealed bar with an assay card. A sealed bar is enclosed in tamper-resistant plastic packaging. Assay cards, or certificates, include the piece’s serial number as additional evidence of authenticity and integrity; they should also identify the metal type and the mint where the piece originated. When a bar is packaged, the assay number on its card should match the assay number stamped on the bar. Rare bars, of course, may not have packaging, but that alone was not presented as a reason to avoid bars outside sealed packaging.
At the time of publication, Atlanta Gold & Coin reported purchasing such bars regularly, including the 100 gram gold bar sold by the gentleman that morning. Still, the article said bars lacking sealed packaging or an assay card should carry a somewhat lower premium.
Where Gold Bars Were Bought
At the time of publication, buying gold as bars or bullion was described as a way to invest in gold, hedge against inflation, and maintain purchasing power.
Gold bars differ from gold coins because they are privately produced rather than government-issued, which was described as making them more affordable. Despite private production, the public could not buy bars directly from the producer or manufacturer. Instead, people interested in gold bars needed to work through a retailer or authorized dealer.
When this article was originally published, gold had again made headlines after reaching a new all-time high as demand rose among people seeking a hedge against financial uncertainty. Although often promoted as a sound investment choice, the article noted that only a limited number of public purchasing sources existed. Its most common options were coin dealers, both local and online, auction sites, pawn shops, and jewelry stores.
Online Coin Dealers
At the time of publication, online coin dealers were presented as an option for people without a nearby coin shop. Some were established businesses with solid records, while others were short-lived companies with histories of significant delays or unfilled orders. The article stressed researching an online dealer thoroughly before placing a gold-bar order, since a substantial amount of money could otherwise be at risk. It also advised confirming whether a dealer had live product or was facing inventory delays.
Local Coin Dealers
The article described a local coin dealer as often the best option, especially for someone near a reputable dealer with strong reviews. It noted that most dealers understood investors could buy gold bars online and therefore should be prepared to offer competitive pricing.
It also cautioned that online coin dealers handled substantially more business than local dealers. As a result, the price for a gold bar from a local dealer could be somewhat higher than the price from an online dealer.
The benefit of buying from a local coin dealer was immediate possession of the gold bar when the transaction occurred. Local coin dealers also generally offered a safe, secure, comfortable setting that supported privacy and anonymity.
Auction Sites
At the time of publication, Atlanta Gold & Coin occasionally met customers who had bought gold bars through auction sites and later discovered the items were counterfeit. Unless the problem was suspected early enough, a refund might not have been possible because many auction sites had limited return policies. The article advised auction-site purchasers to use recognized dealers or a site that thoroughly vetted products and provided a generous return policy.
Pawn Shops and Jewelry Stores
At the time of publication, many pawn shops and jewelry stores also sold gold bars, although not every business was knowledgeable about them. Unless a seller understood how to test and authenticate gold bars, it could unknowingly sell replica items. The article said most coin dealers used an electronic precious-metals verifier to confirm bar authenticity, but that this might not be true at every pawn shop or jewelry store.
For anyone considering a pawn shop or jewelry store at publication, the article suggested having questions prepared. If the answers did not address all concerns satisfactorily, it advised continuing the search for a business that did.
In Summary
Before purchasing gold bars, the original article identified several points worth weighing, including the value of choosing bars that are widely recognized. It recommended staying with premium or established-name gold bars, because recognition can matter. The article also explained that this choice could provide the strongest opportunity to maximize a payout when the bars are later sold.
The article also noted that a bullion bar’s size and condition can influence its liquidity. Where practical, it recommended standard sizes, including one-ounce bars. Fractional and larger bars were described as acceptable, but the price paid for them should reflect the comparatively different liquidity of those pieces.
Finally, the condition of gold bars was described as important.
When a carded, assayed bar and a loose bar were offered at the same price, the original article advised choosing the carded, assayed example. It did not suggest ruling out bars removed from their packaging altogether; instead, it said buyers should receive a modest discount for those pieces. However, packaging was said to be less significant for someone planning to melt a bar for jewelry, as some clients did.
When this article was originally published, Atlanta Gold & Coin Buyers was described as metro Atlanta’s leading coin and bullion dealer. At that time, Call us invited readers seeking to purchase or sell gold bars or coins.
When this article was originally published, Atlanta Gold & Coin Buyers reported competitive pricing and convenient appointments. The original article said readers could view what we pay on its webpage, along with its current inventory. At publication, readers were invited to call or email for precious-metal assistance.
Best wishes treasure hunting!
