Gold Coins vs Bars: Which Should You Choose?

You’ve made the decision to invest in gold. Now, you need to weigh the pros and cons of gold coins and bars. When researching gold coins vs. bars, you’ll find that both options provide advantages, depending on your financial goals.

Below, our team from Oxford Gold Group will help you understand the differences between gold coins and bars so you can begin planning your portfolio. For individualized investment support, you should consult your financial advisor.

Pros and Cons of Investing in Gold Bars

Let’s begin with gold bars. Like any investment tool, gold bars come with advantages and disadvantages that you should consider before purchasing.

Pros:

Both gold bars and coins share a few advantages — they store value over long periods of time while hedging against inflation. When you choose gold bars, though, you can take advantage of a few unique benefits:

• High purity levels: Gold bars have high purity rates that can be higher than the purity of gold coins. Most gold bars are at least 99.99% pure. With this high purity, you can enjoy ideal investment returns.
• Low premiums: Gold bars allow you to purchase the precious metal in bulk to save on premiums. Most gold products come with premiums above the spot price, but you can save a bit of money by selecting gold bars.
• Large sizes: If you want to buy gold in bulk, gold bars are the most economical and practical way to do so. You can purchase bars that range in weight from 1 gram to 12,441 grams (400 troy ounces). With this variety, you can select a size that suits your financial strategy.
• Inflation hedging: Because the value of gold bars is not tied to the stock market or the dollar, they work well for hedging against inflation. You can still use high-purity coins for the same purpose, though not all numismatic coins will provide the same results.
• Long-term value storing: One of gold’s primary appeals is its ability to store value over long periods. Gold bars are highly pure, offering excellent value storing over time. If you purchase low-purity coins, you’re depending on collector demand rates and other unrelated factors that may not provide the same long-term value.

Cons:

When choosing between gold coins vs. bars, you also must consider the cons of each. The disadvantages of gold bars include the following:

• High price point: Gold bars typically weigh more than coins, so they come at high price points. For a standard 400-troy-ounce gold bar at a $2,000-per-ounce price point, you would be looking at an $800,000 bar of gold. Of course, you can purchase lighter-weight bars, though in general, gold bars are expensive for novice investors.
• Storage concerns: Because of their high price point and weight, you typically need to store gold bars in security facilities. Vaulting services usually charge annual storage, maintenance, and insurance fees that add to the cost of investing in precious metals. You likely will also need to pay for insured deliveries to the facility.
• Low liquidity: Gold bars do not provide as much liquidity as coins because of the high price point. When you’re ready to sell, you may not be able to find buyers with enough cash to invest in such a hefty purchase.
• Less collectibility: Gold coins have a numismatic value that makes them appealing to collectors. Unfortunately, gold bars lack the unique designs, rich history, and rarity to become collectible items. If you’re interested in investing in something collectible, gold bars won’t be for you.

Pros and Cons of Investing in Gold Coins

Now that you understand the full ins and outs of gold bars, let’s move on to coins.

Pros:

The primary advantages you can gain when investing in gold coins include the following:

• Legal tender: Certain gold coins issued by government mints are legal tender. Such coins provide extra investment security and functionality.
• Lower price points: Coins weigh less than bars, with options typically ranging from a tenth of an ounce to one ounce. With these smaller weight options, you can enjoy much lower price points, starting at around $300. Small gold coins provide an excellent starting point for novice investors hoping to dip their toes in the gold market.
• Flexibility: Gold coins come in many sizes, purity levels, designs, and more. You can enjoy flexibility in the type of coin you purchase, how much you pay, and how liquid the coin is.
• High liquidity: Many gold coins are highly liquid because they’re cheaper to buy. Assuming you purchase a relatively affordable, high-purity coin, you can often enjoy decent liquidity.
• Rarity: Some gold coins were only produced and circulated for short periods, meaning they’re quite rare. Investing in rare coins can cost more upfront but provide phenomenal returns, assuming you care for them properly.
• Easier storage: Gold coins come with fewer storage fees and complications than bars because of the lower price point and smaller size. You can even store smaller collections at home using a personal safe.
• High purity: Gold coins can still provide the benefits of high-purity gold, depending on the coin you purchase. For example, the Canadian Gold Maple Leaf is 99.99% pure.

Cons:

The list of pros for gold coins may seem quite long, but you should carefully consider the disadvantages as well:

• Higher premiums: Gold coins typically come with higher premiums because of their increased numismatic value and lower weight. When investing in collectible or rare coins, you will often face excessively high premiums.
• Challenging price valuation: Because of the volatile premiums, valuing gold coins isn’t always easy. While the price of gold bars closely matches the spot price of gold, the price of gold coins can vary greatly from the price of raw gold. Understanding the value of your investment can become highly complex.
• Lower-weight options: Some investors may find low-weight options a positive, while others may see this as a disadvantage. If you want to buy gold in bulk, coins will cost you more money.
• Potentially low purity: Some gold coins offer high purity levels, though many have concerning levels of alloy mixes. You need to carefully research any gold coins you’re interested in before buying them. At Oxford Gold Group, we offer a range of high-purity IRA-eligible gold coins and bars.

Historical and Collectable Value: Gold Coins vs. Gold Bars

One obvious difference when comparing gold coins vs. bars is their historical and collectible values. Gold coins have a numismatic value determined by the coin’s history, rarity, quality, and demand from collectors.

For example, the 1933 Double Eagle is one of the rarest gold coins in the world because of its unique history and limited supply. During the Great Depression, the government ordered the coins to be melted down, despite the original plans to circulate them. Only a few survived, making them highly valuable.

In 2021, a 1933 Double Eagle sold at auction for over $18.8 million, which is far more than the value of a 400-troy-ounce gold bar. With that being said, most standard gold coins do not provide this level of return, so it depends on the type of coins you buy. All gold coins come with a small piece of history and unique design, making them attractive to investors and collectors alike.

Gold Coins vs. Gold Bars at a Glance

Size of Premiums

Premiums on gold coins are typically higher than on bars because of the smaller quantities. When you purchase gold in bulk, you can find lower premiums, so bars provide the biggest bang for your buck.

Rare gold coins and collector’s items, such as the 1933 Double Eagle, often have the highest premiums because you’re paying for the rarity on top of the gold value.

General Flexibility

Gold coins may come with higher premiums but provide more flexibility. You can choose between smaller weight options, including one ounce, a half ounce, a quarter ounce, and a tenth ounce, providing easier liquidity when you’re ready to sell. Gold coins also provide more flexibility in terms of storage and transportation because of their smaller size.

Numismatic Value

When weighing gold coins vs. bars, you need to consider how each product retains its value. Gold bars gain value from their high gold content, while gold coins often gain value for historical purposes. When you invest in a numismatic product, you may be investing in rarity and collector demand rates.

Of course, not all gold coins gain their value solely from rarity. At Oxford Gold Group, we provide a selection of high-purity gold coins that can operate similarly to gold bars, gaining their value from the precious metal.

Liquidity

Gold coins are liquid assets that often provide more liquidity than bars because of their smaller size options and accessible price range. When you’re ready to sell your investment, finding a buyer for your coin collection may be easier than finding someone to purchase a large gold bar.

Price Valuation

You can easily track the value of your gold bars by following the fluctuations in the gold spot price. Valuing your gold coins is more challenging, though, since factors like rarity, condition, and collector demand can affect pricing.

Tax Advantages

You may need to pay capital gains tax on gold bars or coin sales, though some coins can provide tax advantages. Some gold coins remain legal tender, meaning you will not need to pay taxes for holding them.

Storage and Security

When choosing between gold coins and bars, you need to consider how and where you will store the products. Gold is a physical asset, which provides the benefit of tangibility but the drawback of storage complications.

Gold coins are generally cheaper to store at a third-party vault, or you can store the items at home in a high-quality safe.

When you invest in gold bars, at-home storage isn’t usually a smart choice. With hundreds of thousands or millions worth of assets, you’re risking a lot by keeping the products in your home. Instead, most investors choose to secure their bars in high-security vaulting facilities that provide insurance.

Vaulting facilities charge annual storage fees and maintenance fees on top of the insurance costs. You will need to pay for all of this each year, in addition to a one-time delivery fee for the hefty shipment.

Advantages of Investing in Gold Bars and Gold Coins

When weighing gold coins versus bars, you don’t necessarily have to choose one. Many seasoned investors see the value in both investment products and decide to purchase some of each. The benefits of investing in both gold bars and coins include the following:

• Portfolio diversification: Diversifying your portfolio with several types of gold assets can help you hedge against risks. For example, if the spot price of gold goes down during a period of high interest rates, your collectible coins may still perform well because of their numismatic value.
• Flexibility: Investing in gold coins and bars means you’re buying products in a variety of weights and price points. You may store your heavier items in a vault while keeping a few coins at home for ultimate flexibility as the market shifts.
• Liquidity: Gold coins and bars each appeal to different types of buyers. By investing in each type of product, you can liquidate your investments over time as you find various people interested in each.

Factors To Consider When Choosing Gold Bars or Gold Coins

If you’re still tied on your investment options: gold coins or bars, here are some factors you should consider:

• Market familiarity: Gold coins and bars exist in slightly different markets. Consider your familiarity with spot gold performance vs. collector coin performance. If you aren’t familiar with either market, think about what you’re more interested in learning about.
• Investment experience: Gold coins typically cost less than bars, so they work better for novice investors hoping to gain market exposure. If you already have decent market experience and want to expand your portfolio, you could choose bars.
• Financial goals: Your personal financial goals will ultimately dictate your decision. Think about how much you want to spend, your comfort in risk-taking, and what level of returns you’d like to see from the investment.
• Long or short-term goals: Gold coins and bars can each work as long or short-term investments, but if you only want to sell the item in the near future, you need something with better liquidity, like coins.
• Storage preferences: The idea of professional vaulting scares many novice investors. At the same time, some people do not have the space to store items in their own homes. Think about how you will store your gold before purchasing anything.

How To Buy Gold Bars or Gold Coins

So, we’ve completed our comparative analysis of gold coins vs. gold bars. By now, you hopefully have a rough idea of which product suits your needs. So, how can you buy gold coins and bars?

You will need to start with reputable online or retail dealers. Online dealers provide you with the greatest selection, and you can review their authenticity in advance to avoid counterfeit products and scams. Here are some factors you should consider:

• The dealer’s customer reviews
• The product’s weight and purity details
• Dealer certifications and licensing
• IRA eligibility (IRA-eligible gold is typically higher purity)
• Buyback programs (Will the dealer repurchase your products when you want to liquidate?)

At Oxford Gold Group, we offer a top-tier selection of IRA-eligible gold coins and bars, including the highest-purity coin on the market, the Canadian Gold Maple Leaf. Our coins come in different values and sizes, plus we offer two gold bars, including one- and ten-ounce sizes.

Buying Gold Bars or Gold Coins for a Gold IRA

If you want to enjoy the benefits of gold investing while also saving for your retirement in a tax-advantaged way, you can open a gold IRA. Gold IRAs allow you to fund your retirement account with IRA-eligible gold and then liquidate the products when you’re ready to retire. The IRS requires you to meet the following criteria when creating a gold IRA:

• Gold bars must be 99.5% pure
• The gold producer must be an accredited or certified minter
• Gold coins must be on the acceptable list (American Gold Eagles, Canadian Maple Leafs, etc.)
• The account must be managed by an IRS-approved custodian
• All gold must be stored at an IRA-approved gold depository

At Oxford Gold Group, we offer gold IRAs that make the precious metal investment process simple, convenient, and secure. Contact our team to learn more.

Are Gold Coins or Bars Right for You?

Gold coins or bars may be right for you if you want to diversify your stock investments in a secure, inflation-proof way. Now that we’ve compared gold coins vs. bars, shop our selection of certified, high-purity gold coins and bars online, or contact Oxford Gold Group at (855) 737-1244 to learn about our gold IRAs.