Gold Bars vs. Gold Coins: Which Should You Buy?
Sell Gold & Silver Precious Metals IRA Secure Storage Blog Coin Library Call Us: (813) 482-9300
 
View Charts
Updated: April 03, 2024

Gold Bars vs. Gold Coins: Which Should You Buy?

Joshua McMorrow-Hernandez

Joshua McMorrow-Hernandez

Published: February 15, 2024

When it comes to buying gold, the decision between gold bars vs. gold coins is a big one. They are the two most popular formats for physically holding gold. The buying decision boils down to your investment goals and collecting objectives: buying gold bars will get you more gold weight per dollar spent, while buying gold coins offers greater resale value per coin.

Put another way, you will pay more upfront for a gold coin than a bar, but each coin has a potentially higher premium on the secondary market if you sell it later.

This trade-off will be explained in greater depth below. We'll also look at the basics of coins and bars. What are the differences? Which ones are more valuable? What's the cost? These are all questions we answer about gold bars vs. gold coins and which ones you should choose based on your gold investing and collecting goals.

What’s a Gold Coin Versus a Gold Bar?

The most important difference is a gold bar is an unmonetized chunk of bullion and a gold coin is a monetized gold piece that was legal tender currency when it was struck. In other words, gold bullion bars are subject to the current gold price, and gold coins have an inherent monetary value.

Beyond that, there are several other differences when considering which one is best for your gold portfolio:

Should You Buy Gold Coins or Gold Bars?

Both gold coins and gold bars provide the same general benefits of owning physical gold. They serve as an inflation hedge, a tangible asset with no counterparty risk, and provide portfolio diversification.

So what is the difference? Short answer: If you care mostly about buying gold at the lowest price, you should buy gold bars. If you want your gold to be legal tender that is potentially collectible, you should buy gold coins. Whichever of these two considerations matter more to you should inform your decision.

In the long run, gold bars will always be cheaper, by weight, than gold coins. The trade-off is that even gold bars from name brands such as PAMP Suisse or a government mint have a limited upside for secondary-market premiums. The value of a gold bar will always be very close to its melt value based on the gold price. So gold coins are more expensive upfront but they may be worth a significant premium above spot price to a coin collector in the future.

The sections below will explore the differences and similarities between coins and bars in more detail. After considering the various aspects of gold coins or gold bars, you’ll need to figure out which plays better to your hand. Neither bars nor coins necessarily represent a “perfect” set of attributes. It boils down to personal preference.

There’s probably at least one element about either gold coins or gold bars that's appealing. Whether it be a matter of cost, the number of options available, long-term investment, or something else not addressed here.

Ultimately, you need to prioritize the most important factors that relate to your overarching goals, financial position, and personal desires. Then choose the better option for you.

Gold Bars

  • They usually come in a thin, rectangular shape, making them convenient for storage in vaults and other small spaces.
  • The bulk of the smaller gold bars on the market are made at private mints and other various reputable mints, though some hail from the government, such as the Royal Canadian Mint.
  • Gold bars are generally made in weights ranging from 1 gram up to a 1kg gold bar (1,000 grams), though some are larger; among the most frequently traded gold bars is the 1oz gold bar.
  • Some gold bars carry artful designs and are traded on their merits as collectibles. In contrast, others are struck with minimal markings that indicate their manufacturer, the quantity and purity of their intrinsic precious metal, and the like.

    • Gold Coins

  • Gold coins have been made by many of the world’s largest and most influential nations.
  • Gold coinage is monetized and backed by the government of the nation that produced it.
  • Many vintage gold coins are considerably scarce as large numbers have been melted over the years for their gold content.
  • Some government mints today strike gold bullion coinage of high purity that is considered legal tender but is mostly traded among investors on the basis of the metal value. Some people collect these gold bullion coins based on potential numismatic value, and this gives these investment-grade gold coins a secondary market as a collectible.

    • gold bars and gold coins

    Gold bars and gold coins can both add to your diversified investment portfolio.

    What are the Pros and Cons of Gold Bars and Gold Coins?

    With the differences between the two in mind, what are the pros and cons? There are advantages and disadvantages to both. Depending on a buyer’s investment needs and circumstances, gold bars or gold coins may be the preferred choice.

    It can be difficult to decide, so we break down the pros and cons of each type of gold. Depending on your financial future, financial goals, investment objectives, market conditions, secure storage options, and precious metals industry knowledge and connections, one may be a better gold investment than the other for you.

    perth mint gold bar

    Gold bars from government mints, such as Australia's Perth Mint, often come in sealed packaging.

    Gold Bars Pros and Cons

    When doing an investment comparison between the two, let’s start with gold bars. A popular choice for high purity and lower premiums, here are some of the pros and cons of gold bars and gold bullion products:

    Pros

  • Gold bars are conveniently manufactured in readily calculable sizes, such as 1 gram, 10 grams, 1/2 ounce, 1 ounce, etc., and are normally made in very high-purity formats – usually .999-fine or even finer. This makes them a popular option for many, being they're pure gold bars you can acquire in set, smaller quantities.
  • Gold bars generally sell for very small premiums over their gold spot price, giving the buyer more gold for their buck.
  • Most gold bars from widely recognized manufacturers are easily liquid, making them more likely to sell at a fair price.

    • Cons

  • As gold bars are not monetized nor are most struck by government agencies, there is a greater risk of having little to no recourse should it be determined the gold bar doesn’t measure up in terms of weight, purity, or other advertised physical characteristics.
  • Gold bars as a tangible asset tend to see greater market volatility because their value is very closely tied to the whims of the bullion market.
  • The market for gold bars is generally highly specified, with precious metals investors representing the vast majority of the potential pool of buyers.

    • Gold Eagle Coin

    Gold coins like this American Gold Eagle are popular investment vehicles today.

    Gold Coins Pros and Cons

    Now for gold coins and gold coin worth. These have their unique advantages and should be evaluated as an investment option whether you're a coin collector or not.

    Pros

  • As gold coins are monetized and backed by the government that minted them, buyers can have a higher degree of confidence about what they are buying.
  • Vintage gold coins especially have a strong collector's appeal and thus enjoy a large market; some classic gold coinage is quite scarce, somewhat insulating these pieces from drastic swings in the mercurial bullion market.
  • Gold coins are widely recognized by individuals within numismatic and investing circles as well as in the general public. This gives them a much wider market – gold coins are gold assets that are typically easy to sell and have a huge market base.

    • Cons

  • Many gold coins – particularly vintage pieces – were struck in unusual finenesses and weights that don’t readily translate into round numbers.
  • You’re usually going to pay significant premiums above bullion value for gold coins, whether they be modern bullion pieces or older, classic gold coinage. This cuts into how many grams of gold you can buy for your dollar.
  • Gold coins are a prime target for counterfeiting, meaning you must be especially careful about buying gold coins. It's always a good idea to seek the expertise of an advisor during a large gold coin sale.

    • American Gold Eagle PAMP Suisse Gold Bar (1)

    Gold bullion dealers will usually carry both gold coins and gold bars in their inventory.

    Work with a Dealer to Buy Gold Bars or Gold Coins

    Whichever avenue you select, be sure you buy your gold bars or gold coins from a reputable bullion dealer. The dealer should offer what you’re looking for at a fair price and talk you through other competitive options. Some of the most reputable gold bar and gold coin dealers will have the following qualifications:

  • Many years of experience and references or testimonials from previous buyers
  • A team of knowledgeable professionals who are willing to educate you on your options
  • Affiliations with industry organizations such as the National Inflation Association and National Coin and Bullion Association

    • Work with a reputable dealer who ensures the authenticity of the products they sell and strives for your complete satisfaction, and you’re sure to come out ahead no matter if you buy gold bars or gold coins.

    Follow these links to shop for gold coins or shop for gold bars at Gainesville Coins! You can also browse the popular gold products listed here:

    Joshua McMorrow-Hernandez is a journalist, editor, and blogger who has won multiple awards from the Numismatic Literary Guild. He has also authored numerous books, including works profiling the history of the United States Mint and United States coinage.

    Read more about coins and bullion from the author:

    Silver Coins vs. Silver Bars: Which Is the Better Buy?

    Coin Glossary: Most Important Coin Collecting Definitions

    Rare Coins Worth Money: A Comprehensive Guide

    1943 Steel Penny Value: How Much They Are Worth Now

    The Best Gold To Buy: A Straightforward Explanation

    Posted In: blog
    Login to post comment Login

    product