Is Buying Gold Bars a Good Investment?

Written By Colin Kuehn  |  Gold 

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Buying gold is a great way to protect your finances.

However, it is important to keep several important things in mind before investing in this precious metal.

It should be remembered that owning gold will cost you money, and it should be considered an insurance investment rather than a trading vehicle.

an enormous stack of gold bars

Investing in gold

Investing in gold bars is a great way to diversify your portfolio. Gold has historically held its value, and it is an excellent backup asset in case of an economic recession or stock market crash.

In addition, it is easy to liquidate. If you need to, you can sell it to a buyer of your choice. The downside to this type of investment is that it offers little return on investment, depending on how it's performing.

If you're considering this type of investment, you may wonder how to determine which is the best option for you. The first step is to check the price of gold.

You'll be able to see how gold is performing over the past year or month. The next step is to see how much silver you'll need to purchase one ounce of gold.

If the ratio is higher, you'll be better off investing in gold.

Another benefit of investing in gold bars is the fact that it is one of the easiest ways to invest in commodities. Precious metals are a great way to diversify your investments because they hold their value better than other currencies.

And they're much cheaper than other investments, such as bonds and stocks.

The prices of gold bars vary depending on their purity. Smaller gold bars tend to be cheaper than their larger counterparts.

However, the premiums on smaller bars can vary greatly depending on the mint. So, if you're a small investor, you may want to consider investing in smaller gold bars.

If you're looking to purchase gold bars in the United States, the best option is to buy them from a reputable company that offers a wide range of products. Some reputable companies offer high-quality gold bars at a competitive price.

Benefits of Owning Gold

Owning gold bars is one of the best ways to secure your wealth and provide for your future. Unlike other assets, gold doesn't lose its value over time, which means you'll be able to hold on to your money for decades to come.

Another advantage of owning gold bars is that they require little maintenance and storage space.

Gold bars also tend to attract a lower premium than gold coins, which means you'll spend less overall. Additionally, gold bars tend to have lower production costs, meaning a single bar can be less expensive than 10 100g coins.

However, you should make sure that you store your gold bars safely to maintain their value.

Owning gold bars can also help you in times of economic uncertainty. Investing in gold has a long track record of providing stability in turbulent times, and it is a valuable store of value. Because it is rare and limited in supply, it is a safe and reliable investment.

It also serves as an excellent hedge against currency devaluation and inflation.

Owning physical gold can also be physically and emotionally satisfying. However, it can be expensive to store. Moreover, you will have to protect the gold with insurance.

However, you can always sell the gold to earn a profit. This way, you can also use the money for other investments.

Purchasing gold is a great way to diversify your portfolio. Moreover, it's the ultimate insurance against the effects of global crises. Many investors turn to it as a safe haven during times of international conflict.

Others turn to it when they need a stable investment with a proven track record.

Risks Associated with Owning Gold

Owning gold is a great way to diversify your investment portfolio. However, it does come with its own risks. The risks involved with owning gold include its price fluctuation.

You must make sure you're comfortable with these risks before investing in gold. It can be difficult to gauge the risks associated with owning gold bars.

Besides the high transaction costs, you'll be exposed to several other risks associated with owning gold. Since gold doesn't have an intrinsic value, its price fluctuates according to supply and demand.

Also, it is difficult to store and transport and can become worthless if a financial crisis breaks out. Moreover, you'll need insurance for your gold to cover these risks.

Another risk associated with owning gold bars is currency devaluation. While there's no way to predict the future of gold, it does tend to increase in value over the long term. This means that it's a good hedge against inflation. Another risk is that it can be stolen, so you should be careful.

In addition, you may have to deal with taxation when selling gold bars.

Physical gold is more secure and transparent than paper products. There are fewer parties involved in the purchasing and selling of gold, which makes physical gold a safer bet for many investors.

A paper gold product won't be able to be redeemed for real gold, and it isn't guaranteed to be safe. You may have to pay extra for insurance.

If you buy gold in the physical form, you must ensure the safe storage of the bar. You should either rent a safety deposit box or add a home safe. The costs of storing gold are an important consideration when buying gold.

It's also a good idea to purchase insurance for your gold.

Cost of Owning Gold

The cost of owning gold bars can vary greatly, depending on their size. For example, a 100-gram bar can be expensive, costing around $5,800 to $6,200. But the majority of investors are buying them because of their potential to gain returns on investment.

So, how can you determine whether buying gold bars is worth the cost? Here are some factors to consider:

First, it's important to compare different prices. Prices for gold bars can vary a lot, as different sellers have different fees and profit margins. Be sure to ask all of your questions before committing to a particular dealer. You may also want to check with the Better Business Bureau or Ripoff Report to ensure you're not being ripped off.

Another important consideration is the security of your gold. If you store your gold at home, it's better if you have a safe to protect it. Unlike coins, gold bars can be stored easily at home. Alternatively, you can store them in a bank safe deposit box or a vault in a specialized facility.

While physical gold may be more satisfying, it can be expensive to store and safeguard. You may need to purchase insurance to cover your investment, which can increase your costs. Besides, if you own physical gold, you depend on the price of the commodity to rise. If you can't afford to pay for insurance, you can opt for a smaller quantity.

A gold bar is much cheaper than a gold coin. Coins are more intricate and require more labor and machining. In addition, a gold bar is easier to store and takes up less space. However, you must ensure the value of your investment fits your risk profile and financial goals.

two beautiful gold bars stacked each other

Choosing a Gold Dealer

When you're purchasing gold, the best deal is to choose a reputable dealer. Choose a gold dealer that accepts multiple payment methods and offers competitive prices. You also want to find a company that has a proven track record and a good reputation in the industry.

In addition, look for a physical location, so you can contact them if you have a question or need additional assistance. Make sure that they accept credit cards, PayPal, and checks. You can also look for a gold dealer that accepts Bitcoin.

Check Their Website

It is wise to read the website of a gold dealer before you call them. This can help you determine whether the company is simply trying to sell you items that make them the highest profit.

A company that only offers high-margin items might not be interested in helping you reach your investment goals. In addition, a gold dealer that does not put their goals and strategies on their website is unlikely to care about your needs and strategies.

Regularly Updated Spot Prices

In addition to a good reputation, a reputable gold dealer will be able to help you stay up to date with the price of gold. Most dealers regularly update their prices according to the spot price.

Also Consider Coins

Some gold dealers also offer coins with different weights and sizes. Coins weighing one or two ounces are the most common, although there are also half-ounce and quarter-ounce coins.

These coins can be purchased for investment purposes, or they can serve as collectibles. Some dealers also sell blank coins that have been damaged.

Transparent Buyback Pricing

It is important to remember that you are buying precious metals for the long-term, and a good dealer will be transparent about their Buy Back Policy.

While most gold dealers will advertise their Buy Back prices, there are also those who don't actually purchase precious metals themselves.

These dealers are only reselling and do not hold their own inventory. By asking questions and reading reviews, you can choose a gold dealer that is reliable and trustworthy.

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Last Updated: September 22, 2022