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Many people have started investing in gold bars as a protective measure against fluctuating currencies and a safe way to store their wealth. Gold bars are appealing since they’re more convenient than gold coins and slightly more affordable as well.
Reputable mints use bullion gold for smelting gold bars. Bullion gold is of superior quality and at least 0.99% pure. Buying high-quality gold bars makes determining the value of a specific weight easier, which is particularly useful if you are trading gold regularly.
If you are looking to invest in gold, you may feel slightly overwhelmed by the terminology related to measurements and sizes used in buying or selling gold. Understanding the different gold bar sizes and their advantages and disadvantages gives you an edge and help when deciding to purchase or sell.
Factors Influencing Gold Bar Value
You may expect that you can calculate the value of a gold bar by merely taking its weight and multiplying it by the current gold price. However, several factors can influence a gold bar’s value, which can ultimately affect your purchasing decision.
Smaller bars require just as much processing as larger bars, which means they have a higher overhead cost. As such, smaller bars will cost slightly more per ounce than larger bars, but they make up for their increased cost by being easier and more convenient to trade.
You may also find that some gold bars are considered scarce due to their unique size, weight, or production batch size. These bars may be more attractive to collectors, which will add a premium to the bar’s value. If you can find one for a reasonable price, you may be able to turn a greater profit.
Troy Ounces
One of the metal pricing terms that can confuse new investors is the troy ounce. The name has its origins in medieval Europe, and it’s still the standard unit of precious metals today.
A troy ounce is equivalent to 1.097 American ounces or 31.1 grams. There are also only 12 troy ounces in a troy pound instead of the 16 ounces in an American pound.
Since the troy ounce is the standard measurement in the international precious metals market, you need to keep it in mind when monitoring the gold price. A gold price of $600/ounce doesn’t refer to the traditional US ounce but a troy ounce instead.
Some traders, including many Southeast Asian countries and the People’s Bank of China, have moved to SI units instead of troy ounces.
If you’re planning to trade in gold, you should have a basic understanding of the relationship between SI units and troy ounces to prevent potential confusion or costly mistakes.
Standard Gold Bar Sizes
International markets assume that the gold bars they trade in are of standard size and weight. The London Bullion Market Association has set several rules outlining the traditional gold bar’s physical characteristics when used in international trade. These rules, known as the Good Delivery specifications, ensure that the standard gold bar is consistent and reliable.
The current specifications include:
- A purity of at least 995 parts per thousand of fine gold
- Gold content of 350 – 430 troy ounces, ideally 400 troy ounces
- 4” x 3.3” x 1.77”
- Stamped with a serial number, fineness, year of manufacture, and the refiner’s hallmark
Most individual traders won’t trade in Good Delivery bars since they are incredibly costly and mostly used by banks and other commodities market traders. If you’re looking for a more convenient entry point into gold trading, it might be worth considering significantly smaller quantities.
Gold Bars by Weight
The type of bar you’ll buy will depend on your needs. Larger bars make a better long-term investment or secure wealth storage. If you’re looking to trade, you may find that smaller bars are less vulnerable to market volatility and are more convenient to buy and sell.
1.0 g Bars
A 1.0 g bar may not be a great way of storing wealth long term, but it does have some advantages over larger bars. One gram bars are an excellent way to dip your toe into gold trading without breaking your budget.
These bars are very affordable and easier to liquidate, which is an excellent option for capitalizing on fast fluctuations in the market. Thanks to their low price point, 1.0 g bars can also be an exciting and unique gift for friends or relatives and may even pique their interest in gold trading.
Yes, small bars are cheaper, although they carry a significant premium due to their higher processing costs.
2.5 g Bars
Savvy investors typically use 2.5 g bars as an affordable way to hedge against surprise inflations and market volatility. These bars usually sit in the sweet spot between the expensive premium of smaller bars and the higher price point of larger bars, making them an appealing option for more experienced investors.
Unfortunately, these bars tend to still be too small for wealth saving. Still, they’re an excellent option for newer traders looking to expand their portfolio or experienced traders looking to protect against a fickle market.
5.0 g Bars
Many individual traders like to use 5.0 g bars to safely boost their existing portfolio without investing too much too fast. These bars are still not too vulnerable to random market fluctuations and are affordable enough to be a smart investment for a new buyer.
10 g Bars
If you’re looking for a happy medium between price and value, 10 g bars are a great way to go. They’re the most commonly traded small bar because they’re easy to liquidate while remaining flexible and secure enough to keep their value long-term. They have lower premiums than smaller bars, meaning that you get more value per gram.
These 10 g bars also are an appealing way to increase the value of your stock portfolio or pension without much risk, allowing you to diversify and grow your wealth.
20 g Bars
Many investors view the 20 g bar as the workhorse of their portfolio. They carry less of a processing premium while remaining small enough to avoid the hefty price fluctuations of larger bars. These bars are great for methodical selling, where a seller can sell one or two bars at a time.
Whether you’re looking to expand your gold trading portfolio or want to convert some of your savings into gold, the 20 g bar is an excellent, well-rounded choice to fit anyone’s needs.
100 g Bars
While experienced investors frequently trade 100 g bars, their primary purpose is to provide an alternative capital storage method. If you’re concerned about an unstable economy, converting some of your cash into gold may be a wise investment. The 100 g bars are large enough to secure wealth while still being easy to store in a safe place of your choosing.
1,000 g Bars
The 1,000 g, or 1 kg, bars represent the best value for the money for savvy investors. These bars have the lowest premiums per spot price of gold but need a large amount of up-front capital to buy.
The 1 kg bar is rapidly becoming the world standard for people who want to convert significant amounts of cash into gold bullion. These bars are still relatively scarce, and their low supply translates into high demand and fast selling times. However, this scarcity also means that buying larger bars may prove challenging as they’re often out of stock.
If you’re serious about converting your wealth to secure your future, this is the best bar for your needs.
1.0 oz Bars
If continually calculating a gold bar’s value grows tedious, you may appreciate merely buying a troy ounce of gold instead. These bars will typically be slightly more expensive due to the processing premium, but they are closely linked to the spot price of gold.
A 1.0 oz bar is an excellent starting point for any would-be investor, as they don’t require you to convert between grams and ounces to determine whether you’re getting a good deal or not. These bars are also easy to liquidate, allowing you to take advantage of any sudden inflation in the spot gold price.
10 oz Bars
The 10 oz bars are a great place to start converting capital into gold bullion. They’re large enough to represent a significant amount of money while still being easy to store and move around. They have a lower premium than smaller bars, ensuring that you get a good return on your investment.
Where Can I Buy Gold?
Buying gold is an investment towards your future. Here at The Oxford Gold Group, we’re proud to offer gold bars in various sizes and weights to meet your needs. If you still feel overwhelmed or need some professional advice, don’t hesitate to get in touch. Our experts are always happy to help. Call us at 833-600-4653. Otherwise, feel free to browse our selection of gold bars and other precious metals today!
