Whether to invest in gold bars or coins is highly dependent on your investment plans. Your goals as an investor and how heavily you value historical or cultural significance will also influence your investment choices.
There are also cost considerations, including potential premiums and tax requirements, that will likely affect your decision to invest in one vs. the other.
While gold, in general, is a reliable investment, it can take time to determine which format of the precious metal offers the best value. How you personally define value also plays a role.
For example, while gold bars have values that can be accurately determined, gold coins have prices that fluctuate consistently yet are easier to sell.
Before deciding whether to invest in gold bullion or gold coins, consider their differences and what they can offer you in return and for your investment portfolio. Consider the information below for more details on the distinctions between gold coins and bars.
With these considerations, you can determine whether gold bullion or gold coins are best to invest in: the best option is the one that is right for you and your investment goals.
Gold Coins vs Gold Bullion
- Gold coins are minted and stamped with face values. Gold coins come in sizes from grams kilos, and beyond. The raw form is placed in a coin format based on what the government approves as the acceptable mintage for the precious gold metal.
- Gold bars do not contain face values and can cost less in ounces and grams but are larger and purer than coin formats. Like coins, gold bullion designs are based on government approval for mints and private mints of gold.
- Premiums refer to the added costs (above spot price) that cover the costs of manufacturing, insurance, packaging, and delivery, as well as the competitiveness of the process. Whether you invest in gold coins or gold bullion, your investments will purchase gold above the spot price, which is considered the premium. Ultimately, to invest in gold while keeping the premiums to a minimum, choose gold bars.
Determining Your Intentions
What you plan to do with your investments will influence whether you should invest in gold bullion or coins. Gold bars are preferred for wealth preservation, but gold coins are more valuable regarding their selling flexibility.
Additionally, gold bars provide the best value when purchasing but lack selling flexibility. However, gold bars are reliable as long-term investments.
The Tax Considerations
Gold coins are legal tender in the US, and there are no tax requirements for possessing them. Gold bars, however, are potentially affected by capital tax gains, whereby the profits you obtain may lead to capital tax gains.
Your Investments, Your Goals
Gold coins are often preferred over gold bullion, as they provide both purchasing power and selling flexibility. However, deciding to invest in either boils down to your investment goals and financial capability to cover added costs. For the best outcomes, invest in the precious metal formats that apply to your investment goals.