Buying and Selling Gold Bars: Everything You Wanted to Know
When this article was originally published, gold bars ranked among the market’s most popular forms of gold bullion investment. They gave investors a broad range of choices in size, production method, and refiner or producer. Bars could be small or quite large; hand-poured or struck; sealed or raw; supplied with an assay card or not; and marked with a serial number or left without one.
In addition, dozens of producers and manufacturers made gold bars. Which producers were reputable, and which were not?
The number of available choices could feel daunting, especially to new or first-time investors in physical gold. In this original article, Atlanta Gold & Coin set out to address the many questions received over the years, with the hope that the information would help readers narrow their choices.
The original purpose was to provide the information readers needed to navigate buying or selling bars and bullion successfully.
What Is a Gold Bar?
To begin with a definition, a gold bar is a physical piece of gold, generally rectangular, made by a private refiner or manufacturer. Gold bars are commonly 24k or .999 fine gold, although exceptions exist and are discussed later in the original article.
A key distinction between a gold bar and a gold coin is that a bar is not legal tender and carries no face value. Except for a small number of exceptions, gold coins are issued by governments and treated as legal tender.
In many regions of the world, people favored gold bars as an investment form. Some cultures called them “gold biscuits” and use them as an investment and also used them to make gold jewelry. When the article was originally published, 24k gold jewelry had become increasingly popular in recent years. Because 24k gold is soft, it may not wear as well as jewelry made with base metals, though its color has a distinctive brilliance.
At publication, Bars are not restricted to rectangular forms. Over the years, Atlanta Gold & Coin had encountered many shapes, including squares, hexagons, circles, ovals, and pendants. Although many such pieces technically fit the gold-bullion category, the public commonly still referred to them as gold bullion or gold bars.
Gold Bar Pricing
Gold bars can offer individuals a cost-efficient route into physical gold because they generally trade for less than gold coins. The original article identified two reasons for that difference.
First, private manufacturers produce most gold bars rather than government mints. Their production costs can be lower, in part because bar designs are more streamlined. That differs from the detailed designs and more sophisticated manufacturing processes generally used for most gold coins.
Second, particularly in the United States, gold coins were more broadly recognized and traded. Investors often paid a greater premium for something familiar to them. In addition, government-issued gold coins are supported by the issuing government, offering added assurance that the gold satisfies stated weight and purity specifications.
Although bars generally cost less than gold coins, that was not true in every case. The bar’s size was one factor affecting the comparison, as the original article addressed next.
Gold Bar Sizes
As noted in the introduction, gold bars came in a wide range of sizes, from 1 gram or less through 400 ounces. The most common sizes included 1 gram, 2.5 grams, 5 grams, 10 grams, 20 grams, 1 oz, 50 grams, 100 grams, 10 oz, and a kilogram, or kilo.
Generally, bars below one ounce, other than the 20-gram gold bar, carried a higher premium than 1 oz bars. Conversely, bars larger than 1 oz usually traded at a lower premium than 1 oz bars.
Although 400 oz gold bars existed, they were mainly traded by institutions and central banks. At the retail level, the largest bar traded was a kilo gold bar, equal to 32.15 troy ounces. These bars could be obtained at the lowest per-ounce premium, but when this article was published, their price exceeded $50,000 per bar, placing them beyond the means of most investors.
The original article described 1 oz bars as the practical middle ground and the size most often requested by the public. Their premium was reasonable, and an investment’s value was easier to follow because gold spot prices are quoted by the ounce.
Smaller gold bars can be useful for people without funds for a larger purchase or for those acquiring gold with possible future barter in mind. Larger bars may suit investors with substantial resources seeking to accumulate the greatest amount of physical gold at the lowest per-ounce cost.
How Were Bars Packaged?
Bars have appeared in many shapes, sizes, and forms of packaging. Older bars were hand-poured and might or might not have packaging, while most modern gold bars did. In some cases, bars made during the 70’s and 80’s were raw and lacked a means of authentication.
Later, producers began using serial or assay numbers and including a matching certificate of authenticity, or COA, to confirm an item’s authenticity. Even then, in the earlier period, the COA was
kept separate from the gold bar, which was not always contained in sealed packaging.
As time passed, manufacturers began sealing gold bars in their packaging.
Some sealed bars included a COA or “assay card”, while others did not. Even so, sealed bars could feel more reassuring to handle than raw gold. When this article was originally published, production and packaging had evolved, and most modern bars were sealed with an assay card.
An assay card is a credit-card-style COA incorporated into the packaging of modern-issued gold bars. It states information about the bar, including its weight, size, and fineness. In many cases, it also carries a serial number that matches the serial number shown on the gold bar.
When this article was originally published, some more recently produced bars included added anti-counterfeiting features, such as a UPC or barcode that could be scanned to check authenticity. Others used a hologram-style sticker that could be compared with the serial number on record. The article anticipated additional measures as gold bars continued growing in popularity and value.
Gold Bar Producers
With hundreds of gold-bar producers, choosing a manufacturer can seem overwhelming. The original article explained that the list could be narrowed to a few dozen producers. The London Bullion Market Association’s good delivery list was presented as a useful starting point. At the time of publication, a current list of LBMA-approved producers could be found at the following link.
These companies were in good standing with the LBMA and met its strict standards for ethics, operations, bar weight, and fineness. A company that did not meet those requirements could be removed from the list. This mattered to some readers because only bars from LBMA-approved manufacturers were described as IRA eligible. The article said they could be purchased for retirement arrangements such as self-directed IRAs and solo 401ks.
As an additional note, the original article stated that people acquiring precious metals through a retirement plan needed a custodian and depository. It also cautioned that the purchaser could not legally take physical possession of metals bought through such a plan. That meant no home safe or safe-deposit box; the article warned that the IRS might treat possession as a withdrawal and assess taxes and penalties.
While any producer on the LBMA good delivery list could be a suitable choice, the article noted that a few producers were especially recognized and frequently requested by the public. These established-name bars were the ones most often traded in the market.
The list included, without being limited to, Pamp Suisse, Credit Suisse, Royal Canadian Mint, and Perth Mint. These bars generally traded at modestly higher premiums than certain other approved refineries.
Private manufacturers made most bars, though a few exceptions existed. At the time this article was written, the Royal Mint in Great Britain, the Royal Canadian Mint, and Australia’s Perth Mint were government mints producing gold bars.
Karats of These Bars
The original article suggested limiting gold-bar purchases to LBMA-approved refiners, although bars from recognized manufacturers would generally suffice. It also emphasized buying only bars made of 24k .999 fine gold.
The article gave three reasons. First, gold bars below 24k gold were not eligible in a retirement plan. Even if someone intended to hold physical gold outside a retirement plan, that limitation could reduce options should that person later choose a different course.
Second, bars below 24k had a very limited market. Atlanta Gold & Coin stated that it did not purchase gold bars below pure gold, and that most trading partners and fellow dealers did not either. In many cases, the only route for someone liquidating bars below .999 fine was a refinery.
Most refineries were accessible only to people working within the industry. At the time of publication, the small number serving the public commonly charged a substantial fee or commission for melting and assaying gold.
Third, bars below .999 in fineness may have been mined or manufactured illegally. When this article was originally published, the original article reported that a meaningful amount of illegal gold from Africa, Central America, and South America had crossed U.S. borders in recent years. Beyond the possibility of owning gold smuggled into the country, such material could have been produced through slave labor or by permanently damaging land needed by future generations.
Where to Buy or Sell Gold Bars
The place selected to buy or sell gold bars can matter as much as, or even more than, the factors covered above. The clearest concern is the chance of purchasing a counterfeit bar when dealing with someone who lacks expertise in this field.
When this article was originally published, that caution included jewelry stores, pawn shops, certain “we buy gold” stores, people using platforms such as Craigslist or Facebook, and individual eBay sellers. A couple of years earlier, Atlanta Gold & Coin evaluated several bars a customer had bought from an individual through an online auction site; the bars proved fraudulent.
That may seem to leave few, if any, choices for a person interested in gold-bar transactions, but the article explained that this was not the case. Gold coin and bullion dealers generally had the deepest experience in this area. In a larger metropolitan area, a dealer was likely within practical driving distance.
At the time of publication, Atlanta Gold & Coin suggested considering that option first because it was often the strongest choice. If no suitable local option was available, or if local choices were unsatisfactory, numerous online coin and bullion dealers existed. The article also noted mail transactions with companies such as Atlanta Gold & Coin Buyers.
To narrow a search for potential coin dealers, the original article recommended first reviewing a dealer’s Better Business Bureau standing. It acknowledged that pleasing every customer is nearly impossible, while cautioning that there should not be a repeated pattern of unfavorable reviews or complaints. It also suggested confirming good standing with the American Numismatic Association and checking membership in other leading industry organizations, including Certified Coin Exchange, CoinNet, and Roundtable Trading.
Selecting one of these established dealers or companies could, according to the original article, substantially improve the likelihood of obtaining authentic gold bars. It also stated that such a choice would likely mean a lower purchase price and a higher selling price if the bars later needed to be sold.
Summary
In closing, this article covered numerous aspects of gold bars, starting with a basic explanation of what they are. It then addressed the range of sizes and shapes, how bars are struck and packaged, producers considered preferable, bar purity, and, finally, how to select a party when buying or selling gold bars.
Understanding these considerations should, as the original article explained, improve the likelihood of a successful transaction and help maximize the value of a purchase or sale.
When published, Atlanta Gold & Coin described itself as metro Atlanta’s leading gold coin and bullion expert and reported dealing in gold bars and coins daily. Ranging from 1 gram to 10-ounce bars and above.
At the time of publication, Atlanta Gold & Coin stated that it could guide readers through the process and address questions or concerns. The original article also reported regular mail business and invited readers to make contact regardless of where they were located in the United States.
