How Much Is a Gold Bar Worth?

One of the common questions we hear from potential investors who are interested in owning precious metals is: just how much is a gold bar worth?

Before we get down to the details, it is worth noting that not all gold bars cost the same. Even though some bars have similar size and weight, they were not necessarily bought for the same price. One of the reasons for this is the fact that the price of gold bars changes every day.

Currently, gold is worth $1,708,60 per ounce, but this price may change at any moment. Investors who own more gold bars will have more value, while those with coins and smaller gold bars have less worth.

Besides the market gold price, a few other factors impact the end value; these factors include the current political situation, upcoming elections, the coronavirus, and the U.S. economy.

These are some of the factors worth examining further for potential investors who plan to own physical gold as part of their portfolio.

Factors That Affect Gold Price

For decades, gold has been one of the most popular investments when it comes to building wealth. It makes sense for investors interested in owning gold bars to know the economic, political, and other influences that could impact gold bar prices.

Economy

Employment reports, manufacturing data, wage analysis, and GDP growth directly impact the Federal Reserve’s monetary verdicts, which influence the price of gold. A strong economy could trigger the Federal Reserve’s policy to tighten monetary action, potentially leading to job growth, low unemployment, and GDP growth.

In times like these, the gold prices go down. However, rising unemployment, lack of job positions, and reduced GDP growth can create an opposite Federal Reserve’s decision. In cases like these, the gold prices will go up.

Inflation

Another factor that could impact the value of gold is inflation. While there are no strict rules, higher levels of inflation contribute to higher gold prices, while deflation tends to lower the value.

When the economy is expanding, the Federal Reserve expands the money supply, making it more expensive to purchase goods and services, including gold.

Gold Production

Gold production can also be a vital factor in the price of the precious metal. An increase in the production of gold can cause increased supply, decreasing the metal’s price. Currently, central banks and other financial institutions hold around 25% of the total gold supply. They can’t sell more than 500 tons per year.

Currency Movements

Since the gold price is dollar-oriented, currency exchange rates and their fluctuations are more essential factors. A failing currency tends to push the gold bar price higher, while a strengthening dollar comes as a result of a growing economy and drives down the price of gold.

Interest Rates

Although gold doesn’t pay interest like savings accounts or treasury bonds, the current market prices influence the interest rates. When the rates increase, gold prices may go down as people sell gold to consider other investment possibilities. On the contrary, as interest rates decline, the global gold price may go up. When the interest rates are lower, there is a significantly higher attraction to gold bars.

Coronavirus

As of late, investors have been discussing the safety of their assets amid the current economic crisis. The U.S. dollar seems to keep a balance in the global exchange market. However, gold is outperforming the greenback and shows no signs of stopping. According to Bloomberg, gold has moved up by 5.3% so far and will probably go higher.

Presidential Election

The upcoming presidential election in the U.S. will most probably have an impact on the gold price. Investors don’t like uncertainty, and the presidential election brings a lot of unpredictable situations and decisions. The more unpredictable the situation is, the more gold has an advantage over other forms of investment.

Unlike paper currency or other assets, gold maintains its value regardless of what is happening in the world. Gold bars offer distinct benefits that can’t be found in other forms of investment. Historically, gold has been an excellent guard against inflation.

Over the past five decades, investors have seen global gold prices escalate when the cost of goods and services increased. Moreover, gold bars are an excellent store of value to potential investors who are encouraged to invest in gold when the local currency is decreasing.

What Does a Gold Bar Contain?

Gold bars can vary in size and weight. Under the United States Mint regulations, bars weigh from 350 to 430 troy ounces. The length of the bar changes from 210-290mm, the height from 25-45mm, and the width from 55-85mm. Each bar has its serial number, year of manufacture, and other details.

Different sized bars have different prices. An average gold bar weighs 400 oz, which is also known as the standard weight for gold bars. Other commonly traded gold bar weights are 1kg, 10 oz, 5 oz, and 1 oz.

Run-of-the-mill investors aren’t purchasing a full standard-sized gold bar for their investment portfolio. Instead, they consider smaller sizes.

What Are Gold Bar Premiums?

New gold bar investors are wondering about the premium added to the gold bar price. The market gold price is mainly influenced by supply and demand. Since the global supply and demand are active 24/7, gold prices continuously change. The supply consists of sales of current gold owners, including central banks, private investors, funds, and insurance companies.

Different sources provide the global spot market price. Currently, one of the most reliable sources is kitco.com.

A bullion premium is added to the spot market place when a potential investor wants to buy physical gold bars. The premium is also known as “top-up” or “mark-up.” The bullion premium doesn’t only apply to bars but to gold coins as well. When the investor receives a gold bar in a physical form, the production of bars comes at a specific cost. Other expenses like insurance, transports, and handling must be covered as well. The premium (the price a gold bar buyer needs to pay to the seller, on top of the gold spot market price) covers all these costs:

Gold Market Price + Premium = Gold Bar Worth

The gold market price does not reflect the sales price of gold when an investor invests in a gold bar. The sale price is the global gold market price plus the premium.

There are a wide variety of factors when it comes to the premiums of bars:

• The volume of gold offered
• The weight and form offered
• The current market supply and demand
• Economic conditions
• Global conditions
• The local market where gold is bought
• The seller’s interests and plans

It costs more to produce 1,000 gold bars of one gram each, compared to one gold bar of 1kg. The same goes for insurance, packing, and transport. Reflecting these factors to the gold bar price translates to lower premiums for larger bars and higher premiums for smaller bars.

The premiums may vary based on the factors above. Still, there are some gold premiums standards every investor should know:

• ➔ 1kg Gold Bar – 1,5-2,5% Premium
• ➔ 500g Gold Bar – 2,5% Premium
• ➔ 250g Gold Bar – 3% Premium
• ➔ 100g Gold Bar – 3-5% Premium
• ➔ 50 g Gold Bar – 5% Premium
• ➔ 31,1g (1 ounce) Gold Bar – 6% Premium

Please keep in mind that these standards may vary based on the supply and demand, economic factors, and the other reasons mentioned above.

What Is The Best Gold Bar Size to Buy?

Potential precious metals investors frequently ask what is the best gold bar size to invest. There is no right answer, as it always depends on the investor’s interests and circumstances.

Gold bars are sold in different sizes, from 1kg to 1g. There are larger bars, including 400 ounces and 100-ounce gold bars.

Grams

When it comes to buying gold bars (especially smaller sized gold bars), buying per gram is the most popular option. However, the lower bars trade at a higher premium than larger gold bars.

Ounces

Smaller bars carry higher manufacturing costs, meaning that they sell for a higher premium. When considering expanding your precious metal investment portfolio, it is essential to calculate the margin over the global spot price. For investors with a budget that is below $500,000 for investing in gold bars, 10 ounces, 100g, and 1 ounce are the most attractive options. These bars are the most popular and allow investors to liquidate them later, if necessary. Owning smaller gold bars gives investors greater flexibility.

For investors with bigger budgets, the 1kg bars are an excellent option, as they trade at a lower premium (1,5%-2,5%).

Most Common Gold Bars: How Much Do They Worth

As mentioned earlier, the 1kg gold bar and the 400oz bar are the two most popular options when investing in precious metals.

➔ The 400oz Gold Bar – The 400oz bar weighs 398, 7138 ounces. The price of gold is $1,708,60; therefore, the price for a 400oz gold bar is $683, 440 + premium.

➔ The 1kg Gold Bar – 1kg gold bar weighs 32,15243 ounces. The current price of gold is $1,708, 60; therefore, the price for a 1kg gold bar is $54, 9388,83.

Mitsubishi Materials Corporation owns the largest gold bar in the world. According to the Guinness Book of World Records, this gold bar weighs 551 pounds, and its dimensions are 6.7 inches by 8.9 inches by 17.9 inches. Its estimated worth is around $10 million.

Knowing how much is gold worth is essential in making decisions for your investment portfolio. Many factors may influence the current gold price, including policies by central banks, the strength of the dollar, economic concerns, and market supply and demand.

Gold spot prices change every minute and are based on macroeconomic factors, speculations, and breaking news. The gold spot price is determined by both local and foreign exchanges, allowing the price to fluctuate from 6 PM EST to 5:15 PM EST, Sunday to Friday.

The spot price of gold is trading 24 hours a day on different commodity exchanges based in Zurich, New York, Chicago, London, Hong Kong, and China. One of the most influential factors of gold’s market price variations is the commodity exchange (COMEX), which is part of the New York Mercantile Exchange. The spot price of gold is calculated based on the forward month’s future contract that has the highest volume.

When it comes to the physical gold bullion, the Shanghai Gold Exchange (SGE) in China is the largest trading market in the world. This market is continuously growing and could one day influence gold’s spot price in a stronger way compared to COMEX.

What Is the Prediction for Gold Bar Prices?

Will gold prices go up?

A lot of things have changed as a consequence of the global coronavirus pandemic. If there is something we’ve learned from the past, it is that the gold prices go up whenever the economy faces a crisis.

As the world economy hits rock bottom due to the coronavirus crisis, analysts and investment experts are betting on growth in gold bar prices. Markets are too optimistic about precious metals, which is good news for anyone thinking of expanding their investment portfolio.

The chief investment strategist at MBO Wealth Management, Yung-Yu Ma, said that gold market prices “took investors on a wild ride” during the pandemic crisis.

Additionally, Bank of America predicted that gold prices could double by the end of 2020. If you are actively following the gold charts, you’ll see that the price is growing minute by minute. So, the best thing to do is to be optimistic and hope for the best.

Want to Learn More?

If you want to learn more about how much a gold bar is worth or how to protect your financial future with investing in gold bars, don’t hesitate to reach out to an Oxford Gold Group Partner. Contact us at (833) 600-GOLD.