Not all that glitters is gold — and for a good reason. Gold is the metric by which we measure the best of the best. There are gold medals and golden opportunities, but nothing is as satisfying as holding a piece of real gold in your hands.
Are you looking for the golden ticket for a good investment? Then you might want to consider investing in gold. Many people wonder, is gold a good investment in 2020? Despite the uncertainty of the global economy, there’s never been a better time to invest in gold. Before you whip out the wallet and fork over serious cash, you’ll have to decide what to buy.
There are two primary gold investments: coins and bullion. But which is the better buy? Keep reading as we compare the pros and cons of gold sovereign coins vs. gold bullion to help you make the right choice.
Over the decades, gold value has ebbed and flowed. However, gold has always held value for investors. Even in times of economic strain, gold prices surge. We’re currently witnessing this in real-time. Right now, gold is up roughly 19 per cent, no doubt perpetuated by COVID-19.
It’s easy to see why: precious metals are a more assured investment than stocks and bonds. Typically, when the dollar lowers, gold climbs.
Bottom line: it’s an excellent time to jump in the precious metals game and invest in gold products. But which should you buy?
Below, we’ll compare and contrast gold sovereign coins vs. gold bullion to help you find a golden investment.
The most significant intrigue of gold sovereign coins is their credibility. The Australian government issues gold sovereign coins with the strictest standards and regulations for quality, weight, and purity. Because of this, coins are a premium investment as well as legal tender. Also, gold coins are globally recognised and time-honoured.
While bullion bars are accessible to first-time investors, gold sovereign coins have an air of prestige that commands a higher price.
Ultimately, it boils down to the fact that bullion bars are a lump of gold, whereas coins are legal currency.
Many buyers want assurance that their investment goes to a gold product minted by a reputable agency like the Perth Mint, or Royal Australian Mint. With gold sovereign coins, you’ll feel confident in your investment because it’s nationally recognised and supported.
How does gold bullion stack up? Let’s compare.
Gold bullion is any weight of gold that’s been refined and stamped. Bullion is a high purity precious metal used for investments and trading.
Bullion refers to any weight of gold that’s refined and minted. However, in the gold industry, bullion often refers to gold bars. So, what are gold bars and are they valuable?
Simply put, a gold bullion bar is a chunk of precious metal that’s minted and inscribed with the weight of gold purity on the bar. Some investors value gold for its purity and actual weight, while others care more about the process of pouring, minting, and casting the bullion.
Gold bars typically have 99.99 per cent of pure 24-carat gold, and you can buy them in varying sizes. Buying gold bullion is easy, and you have the leisure to buy single bars or in bulk.
They’re not as expensive as some gold sovereign coins, and you’ll always know how much your investment is worth since the live gold prices govern it.
We’ve covered both gold sovereign coins vs. gold bullion, so which is right for you?
So, we’ve covered the basics of each gold product, but how will you choose which to invest in? Let’s explore the pros and cons of each.
As we mentioned, gold coins have credibility and federally backed buyer assurance. But that’s not the only benefit here. Many investors cherish gold coins because they have historical significance. Sure, they’re an excellent financial investment, but they hold more value than monetary — especially for coin collectors.
Another pro is that gold coins appreciate over time. When the government issues annual collections, investors can purchase coins at a premium that will only appreciate over the years, especially for limited edition issues.
Sounds great, right? Of course, there are some cons to consider when buying gold sovereign coins. Namely, you can’t equate the value of gold coins to the exact live gold spot value.
It’s true that as gold prices peak and fall, so, too does coin value. But there are outlying influences on the value of gold sovereign coins, and again, it relates to their rarity and collectibility.
Selling special edition coins to non-collectors might not yield a sizable resale. However, if you find the right collector, your coin might warrant a price higher than the live gold spot value.
As you might imagine, the older or rarer the coin, the more valuable. This is called Numismatic value, which can be an advantage and disadvantage of investing in gold coins, depending on the buyer.
Generally, gold bullion bars won’t hold the same value as gold sovereign coins because they don’t have Numismatic value. That said, buying and investing in bullion is straightforward, which is undoubtedly a benefit. You can easily identify the value and weight of a gold bar thanks to its conspicuous inscription.
You’ll never have to worry about guessing the value of a bullion bar because it’s exact to the live gold spot price.
If you’re looking for a simple, easy investment that’s not contingent on historical value or collectibility, gold bars may be the right choice for you. As the value of gold ebbs and flows, you’ll always have a clear grasp on the value of your bullion.
There’s no interpreting or guessing the market, and that ease is appealing to first-time gold buyers.
The general rule of thumb with buying gold is that the larger the weight, the cheaper the gold per ounce. Does that seem odd? There’s a good explanation for this: it costs the same to pour a 1oz coin as it does to stamp a 100 oz bullion bar.
So wouldn’t everyone rather have larger products? Not necessarily, because over time you may want to resell some of your investment, in which case it helps to have smaller sizes on hand.
Speaking of resale value, you’ll want to look farther ahead than your initial investment. If you’re buying coins, consider which issues might hold the most value long term. Novelty issues might seem intriguing today, but will they keep that same intrigue down the road?
Ultimately, choosing between gold sovereign coins vs. gold bullion bars comes down to your preferences. Why are you investing in gold? If it’s to build a collection of historically valuable and nationally regulated gold, then you’ll likely opt for coins. If you want an accessible, straightforward investment as a first-time gold buyer, start with bullion bars.
Times are strange right now, but one thing is sure: gold is valuable and will only increase over the years. And that’s what we’d call a golden investment!
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