Trying to decide between investing in gold coins vs. bars? There are pros and cons to each. This guide breaks down the key differences to help you choose the right option for your investment strategy.
Looking to invest in gold and wondering whether to invest in gold coins vs bars? With gold up 176% in the past ten years, investors are flocking to gold.
But there are some important differences with coins and bars. This guide will walk you through everything you need to know.
Should I invest in gold coins?
Gold coins have been used as a form of currency and a store of value for thousands of years. They’re one of the oldest – and easiest – easy to invest in precious metals.
Some of the most popular gold bullion coins you can invest in include:
- American Eagle
- Canadian Maple Leaf
- South African Krugerrand
- Austrian Philharmonic
- American Buffalo
- Chinese Panda
While more volatile, collectible coins are also an option. The St. Gaudens coin is a notable example of a highly-valued gold coin that has appreciated over time.
Gold coins are an easy and accessible way to get started investing in gold, but there are some things you should consider first.
Some pros of investing in gold coins include:
- Recognizable and trusted: Popular coins are backed by governments and are widely accepted around the world.
- Easy to sell or trade: Coins tend to be more liquid than bars due to their standardized weight and high demand.
- Collector value: Some coins may gain numismatic value, appreciating over time. The IRS has special rules for collectible gold coins that you’ll want to be mindful of for tax implications.
- Suitable for smaller investments: Coins are available in smaller quantities making them more accessible for some investors.
Some cons of investing in gold coins include:
- Higher premiums: Coins usually cost more over spot price compared to bars, reducing the overall value of your investment.
- Risk of damage: Damaged coins can result in a reduction of value, especially for collectible coins.
- Storage concerns: If you store coins at home, you’ll need a home safe or a safety deposit box and insurance.
- Tax implications: Gold is considered a collectible by the IRS. Unless you keep your gold in a tax-advantaged retirement account, you may be on the hook to pay capital gains taxes on any profit you make.
Gold coins can be an easy way to get started investing in gold especially if you’re looking for flexibility, liquidity, and want to hold physical assets in your portfolio.
Should I invest in gold bars?
Gold bars have been historically held by central banks and large institutions to preserve purchasing power. Today, they’re widely available to individual investors who want to invest in gold in bulk at a lower price point.
Some of the popular gold bars to buy include:
- 1 oz PAMP Suisse Gold Bar
- 1 oz Credit Suisse Gold Bar
- 1 oz Valcambi Gold Bar
- 10 oz and 1 kilo gold bars
- Royal Canadian Mint Gold Bars
Some pros of investing in gold bars include:
- Lower premiums: Bars often cost less per ounce compared to coins, especially if you buy them in larger sizes.
- Easier to manage: Bars are ideal if you’re buying larger quantities and want to minimize overhead costs and keep track of your investments.
- Simple and straightforward: There’s no artistic or collecting value to bars, you’re just investing in pure gold.
Some cons of investing in gold bars include:
- Harder to liquidate in small portions: Selling a gold bar can be harder to do than a coin, especially bars in larger sizes.
- Less recognizable than coins: Bars are produced by private mints and aren’t backed by governments. Not all mints are recognizable which can affect your ability to sell them.
- Requires secure storage: Larger bars can be more expensive to safely store, eroding your returns over time.
Gold bars are ideal for investors who want to maximize value and intend to hold large amounts of gold in their portfolio over the long-term.
Gold Bars vs. Gold Coins: Key differences
Both gold coins and bars offer you the chance to invest in gold. Depending on your overall financial goals, one might be better to invest in than the other.
These are some key differences between gold coins vs bars you’ll want to consider.
| Criteria | Gold Bars | Gold Coins |
|---|---|---|
| Recognition | Less recognizable by investors and produced by both government and private mints | Highly recognizable by other investors and produced by government mints |
| Premiums | Lower premiums especially for larger weights | Higher premiums due to artistic designs and collector demand |
| Liquidity | Can be difficult to liquidate and are better suited for long-term holding | Easy to sell directly to other investors to through gold dealers |
| Variety | Limited designs with the focus on bullion content | Wide variety of designs, mints, and collectible series |
| Ideal For | High-volume investors looking for lower costs | Beginners, collectors, or investors who want to diversify their portfolios |
| Storage | Requires secure storage at an insured depository | Easier to store and transport in smaller quantities |
Which one is right for you?
There isn’t necessarily one option that is better than another. Choosing between gold coins vs bars ultimately comes down to your personal investing goals and how involved you want to be in managing your portfolio.
If you’re just getting started investing in gold or want to be able to sell your gold quickly, gold coins have broad recognition and are easier to liquidate.
If you’re a long-term investor who plans to hold onto your gold for a while and want the best return on your investment, gold bars offer lower premiums and better value per ounce.
There isn’t a right or wrong answer, simply a preference. You can combine both, holding gold coins for short-term access and bars for long-term storage.
This can be an option to consider if you have a gold IRA and are already paying for secure storage at a depository.
Is it better to buy gold coins or bars?
Congrats for taking the time to learn more about investing in gold coins vs bars. Just by reading through this guide, you’ve already taken an important step to diversify your portfolio and preserve more of your wealth.
Now that you understand the benefits, drawbacks, and key differences between coins and bars, you can choose the option that aligns with your financial goals.
Whether you want access to liquidity or lower costs, you have the knowledge you need to get started investing in gold.
Remember, there’s no one-size-fits-all answer. The most important thing is to identify your goals, risk tolerance, and investment style then find a way to invest in gold that works for you.