Investing in gold bars
When the world is in a state of uncertainty, currencies and stocks tend to fall, unlike the value of gold, which tends to rise. There are different types of gold that you can invest in, including gold bars. This guide will provide you with everything you need to know about investing in gold.
Why buy gold bars?
There are a number of different reasons why savvy investors are buying gold bars in increasing numbers. In addition to the psychological comfort of owning a physical investment, investing in gold bullion makes financial sense as well.
Gold bullion is not subject to the same fluctuations that affect currencies around the world, its value remains strong even when uncertainty prevails and the economy deteriorates.
Physical gold is one of the few remaining forms of private investment available as there is no requirement to register ownership. In addition, it carries attractive tax benefits depending on individual circumstances, and clients can easily transfer their wealth to their loved ones.
Types of gold bars
There are a variety of different gold bars that you can invest in, but they generally fall into two categories: cast bars and coined bars. Cast ingots are the standard form of ingot that we all expect to see when we think of a gold ingot and are formed by pouring molten gold into a mold. As for bullion bullion bullion, it simply refers to bullion cast that has been stamped with a unique brand or insignia, making it generally more expensive. When purchasing a cast gold bar, it is important that you do so from an LBMA approved manufacturer. The following brands are popular in the retail market: Metalor, Umicore, Pamp, Credit Suisse, Johnson Matthey, Heraeus, UBS.
Purity of gold bullion
Gold bars come in varying degrees of purity. 24 karat gold is the purest form of gold available and indicates a strength of 99.99% purity. These alloys are, of course, more expensive than less pure alternatives, such as baht bar, manufactured in Thailand, usually with a purity strength of about 96.5%.
Weights and measures
In addition to differing in terms of purity, gold bars also come in all shapes and sizes. The smallest commercially available piece of gold weighs only 0.3 grams and is generally used in jewelry, while the largest weighs 250 kilograms and is owned by the Japanese automobile company, Mitsubishi.
For bars made specifically for jewelry purposes, 1 gram is generally the smallest size that can be purchased in Europe, although the types most commonly used by banks and gold reserves weigh 12.4 kg and are known as “Good Delivery” bars in London.
The amount of gold bars you may want to invest in need not be too small or too big. General weights for standard investment are: 1kg, 500g, 250g, 100g, 50g, 10z, 20g, 10g and 5g.
Buy gold bars through SIPPs
If you are buying gold under a Self Invested Pension Plan or SIPPs, you will have to purchase gold bars that are at least 99.5 parts in 1000. Gold coins are not allowed under the SIPP as they are legal tender and therefore tax deductible.
Buy gold bars for investment
Gold bars are basically trapezoidal blocks of refined metallic gold made to certain weights for the purpose of selling. The internationally traded standard is the Good Delivery bullion weighing 400 troy ounces (12.4 kg or 438.9 oz). The exact gold content for Good Delivery bars is allowed to be between 350 and 450 ounces, but the minimum required purity is 99.5% gold.
Bullion is made by minting or stamping gold sheets rolled into a specific shape. Many investors prefer to use 1 kg and 32.15 troy ounce bars, which have a lower premium when trading
Use of gold bars
Gold bullion has many uses beyond investment. Various industries such as those involved in advanced electronics or the jewelry industry benefit from gold. These industries often demand gold in ingot form because it is easier to mine than carved gold coins.
Advantages of investing in gold bullion
An insurance policy to protect your wealth and investments is important, especially when considering the current pandemic uncertainty. Physical gold is one of the least exposed forms of investment to political and financial volatility, and it also comes with attractive tax benefits depending on individual circumstances.
Storehouse of wealth
Humans have always regarded gold as a store of wealth thanks to its rarity, aesthetic value, and durability. Gold does not rust or tarnish and melts only at very high temperatures, making it easy to store.
Gold bullion is also the only option for investing in pensions or self-invested personal pension funds, as many of these investments do not back gold coins or invest in actual gold. Just remember that gold bars used for SIPP or ordinary pension must be 99.5% pure gold.
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