Types of Gold Bars
There are basically two types of gold bars. Cast and minted.
Cast gold bars are produced by pouring molten gold into molds. These are usually called ingots. They are rough and the markings, such as the foundry or manufacturing mark, gold purity and registration number are pressed into the gold. Although gold is quite dense it is nevertheless quite soft and easy to manage.
Cast gold bars are manufactured by around twenty-seven accredited manufacturers around the world. They produce small cast bars in many gold bar weights including in kilos, grammes (usually 500g or less) and in twenty ounces or less sizes. The smallest cast gold bar known weighs 10 grams and is made in Brazil. More popular cast gold bars are manufactured in Brazil, Europe and Japan, The ounce bars are made in Australia, Europe, UK and the USA.
Minted bars are manufactured from gold that has already been poured into a mound and then drawn out into strips. The gold bullion bars are then stamped out to the required sizes and shapes and the markings, in this case, are applied during the minting process.
Gold coins are produced in the same way incidentally, although more care is applied during the stamping process to produce the finer finish of the coins.
There are four accredited manufacturers of the standard minted bars. These are:
Argor-Heraeus. A subsidiary of Union Bank of Switzerland
Metalor. A subsidiary of Swiss Bank Corporation
Valcambi. A subsidiary of Credit Suisse
Pamp SA
They produce around 35 percent of the worlds minted gold bars. The bank subsidiaries also issue their bars with the bank brand name so are easily recognisable.
Gold Bar Purities
All gold bars have a purity expressed in units per 100, 1000 or 10000. There is a universal trend now for bars to be 99.99%, however, there is still some variation in some countries. For example:
Dubai - 99.9%
Iran - 99.5%
Hong Kong - 99%
Thailand - 96.5%
A new product, called ChipGold, has also entered the market. This is a relatively new form of gold bar, consisting of a small ingot of one to twenty grams presented in a sealed and certified package, about the size of a credit card. Chip Gold is designed to be used as a liquid investment in gold and can be easily stored and transported. The typical weights available include, one through to twenty grams with a purity of .9999 fine gold.
The granddaddy of all gold bars is the larger 400 oz (12.5 kg) ‘London Good Delivery’ bars. These are held by central banks and used by banks, governments and large institutions to store value and to transfer value between banks, They almost always have a purity of 99.5 percent.
Gold Bar Weights
All gold bars are denominated in different units of weight to accommodate the various cultural preferences of different geographical regions:
Grammes. International
Ounces. Mostly English-speaking countries: USA, UK and Australia
Tolas. Mainly India, Pakistan, Middle East, Singapore
Taels. In the main, Chinese-speaking countries: Hong Kong, Taiwan, China
Bahts. Thailand
Chi. Vietnam
Dons. Korea
One troy ounce is equal to 31.1034768 grams. So if gold was 900 dollars an ounce then one gram would be worth about 28.935673 dollars.
Gold is measured in troy ounces as distinct to the more common avoirdupois ounce which is used for food and slightly lighter than a troy ounce. One avoirdupois ounce is equal to 28.349523125 grams.
One tonne = 1000 kilograms = 32,150.746 troy ounces.
One kilogram = 1000 grams = 32.15074656 troy ounces.
One tael = 50 grams. (the official rate of taels in mainland China since the country went metric. In Taiwan and Hong Kong today a tael is equivalent to 37.429g
Gold Bar Prices
Gold bar prices depend of course on the gold price at any given time. As the value of gold increases so the value of the gold bar increases. The premium, how much you pay over spot gold is made up of, the manufacturing costs, the gold bar dealers costs and profit. You also have to take into consideration the shipping and insurance costs. Their may, in some countries or US states, be a tax to take into account also.
You should buy the highest gold bar weight you can afford as you will pay less premium per ounce or kilo that way. As the gold bar price goes up, the premium per ounce decreases also. However, you may want to buy smaller one ounce gold bars if you think you may need to sell some of your gold bars from time to time to cover unexpected expenses. Often the premium for ounce gold bars is not that much higher than for the larger gold bars.
Unless you absolutely have to, I recommend you do not sell gold bars for national fiat currency as the value of fiat currency (paper money) is deteriorating rapidly and, although you might get more fiat currency than you paid for your gold, its value will dwindle from the moment you get it.
Why Buy Gold Bars
Gold bars are a safe haven for asset protection as well as a good future investment. Basically the value of gold does not change with regard to the goods and services you can get with its value. And ounce of gold still purchases the same value of goods and services as it did many years ago. But the amount of fiat currency which the gold value is assessed by does change and, as the economy goes through recessions and inflation, the apparency is that gold is worth more when actually it is the currency which is worth less.
A good reason to buy gold bars and not sell them.
But if you do have to sell some gold, bars are good as they are accepted anywhere in the world.
Where to Buy Gold Bars
You can buy gold bars from gold dealers, mints, foundries even, as well as from private individuals, auctions and the like.
The same basic principles for buying gold apply regardless of whether you buy gold bars in New York, Washington or anywhere on the planet.
Here are some basic principles you can use to ensure you get the best deal and the best gold for your buck.
1. Buy the biggest gold bar or bars you can afford. The bigger the bar the smaller the premium you will pay per ounce. This will reduce the gold bar price per ounce.
2. Pick established or accredited gold dealers and mints.
3. If you are going to take delivery, ensure you understand the cost of shipping and, importantly, insurance. Check with the gold bar dealer to find out the shipping costs and ensure that they provide insurance (which you will be expected to pay) this should be figured in the gold bar price.
4. Do due diligence on the gold bar dealer or person or company you are buying gold from. Who are they? Are they easily contacted? Are they accredited? Do you know friends or associates that have dealt with them before?
5. Lastly it is prudent to have a good understanding of gold and gold bars. How they are produced and in what form. The weights, fineness and all other aspects of gold bars. How much premium will you pay?
Taking some time to understand your gold bar investment will pay off in that you can ensure you get as much gold for you money as possible and that you do not pay a heavy gold bar price while doing it!