Gold Coins Vs. Bars: Which is the Better Way to Invest?

While gold coins accord flexibility to your portfolio, gold bars can be kept as a long-term investment. This Buzzle article will tell you which one to choose in the investment war of gold bars vs. coins.
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Gold coins vs bars
Tip
If you are looking for a short-term investment in gold, opt for coins as bars are more suited for long-term holding.
These days, many people tend to make gold a part of their diversified investment portfolio, as it is not affected much by currency devaluation or inflation. Also, generally, it has been observed that the price of gold always appreciates, hence, it becomes a valuable steady investment. There are several options of investing in gold, like gold coins, bars, ingots, jewelry, gold ETFs, gold mutual funds, e-gold, etc. However, two of the most popular options are buying coins and bars.

There has been an ongoing debate about which among the two is the best investment option as both have their own share of pros and cons. While coins are easy to trade, bars make an excellent long-term investment. Also, due to the smaller amount of gold involved, coins are easily affordable, while bars are difficult to buy and sell. If you want to know which one to choose, here are few points that will explain the difference between investing in gold coins and bars in detail.

Gold coins Gold bars
Selling
Coins are available in varying small quantities, hence, relatively easier to sell. Cannot sell only a part of it, you will probably have to sell the whole bar.
Buying
Relatively easy to find a buyer for small coins. You will have to search for a buyer who is willing to buy the entire bar.
Affordability
Due to their lighter weight, coins can be easily afforded by all types of investors. As a bar is generally heavier, it cannot be afforded by a small investor.
Production
These are produced in large quantities all over the globe. There are about 110 accredited bar manufacturers and brands which exist in only 27 countries.
Portability and Storage
They are easy to store and carry. They are difficult to transport or store due to weight and size restrictions.
Purity
Some coins contain 91.7% (22 karat) gold and the remaining alloy, while others are 99.99% (24 karat) pure. The minimum purity required for a gold bar is 99.5% gold.
Price Premium
Coins will usually get a higher price premium. Bars will fetch a lower price premium as compared to coins.
Re-assaying
Re-assaying is not required to know their veracity. Re-assaying may be required.
Forgery
There is minimal risk of forgery; however, risk of gold-plated lead coins exists. Higher risk due to chances of partial forgery by creating a tungsten-filled cavity in the bar.
Variety
Wide variety available including recent and commemorative ones, and rare collector's coins. Do not have a collector's value, and are strictly for investment purpose only.
Customers
Large, medium, and small investors, banks, dealers, etc., for a long or short duration. Usually banks, corporations, rich citizens, etc., for long time investment.
Volume of Trade
Traded and sold at a larger volume than bars. Traded at a relatively lower volume due to their larger weights.
Liquidity
Can be converted easily into cash whenever required. Do not have the ease of liquidity because of limited buyers.
Competitive Prices
Available at a competitive price. Do not have competitive prices because of niche market.

Due to the convenience of buying and selling attached to coins, many investors prefer to invest in them instead of bars. Also, coins have a continuous demand in the marketplace. If you intend to opt for coins, go for ones that offer cheapest 'premium' over and above the spot price. However, if you want to make a sizable investment in gold, then choose gold bars.
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Published: February 3, 2014
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