Having made the decision to invest in gold bars, you will have to decide what amount to allocate taking into account the denomination and consequently the price of the same.
When investing in gold bars, it is important to choose correctly how to divide the investment, since depending on the size of the bars, it will be difficult or not to be able to split it subsequently to divest.
Let's see below what are the elements to take into consideration when we decide to invest in gold bars:
- The different cuts, weight and purity of the gold bars available on the market.
- Analysis of the convenience in fiction of the cut, the purity and the spread applied by the operator
- Where and how to buy gold bars safely, the professional operators to contact.
- The choice of the methods of keeping and conservation, costs and risks.
The different denominations of the gold bars available on the market.
On every continent, gold bars are produced in different sizes and weight units, this is because gold has been present in the history of the world since the dawn of time and the culture linked to it is influenced by different traditions and stories.
The most classic example is the British imperial system which has handed down the weight measurement system based on troy ounces to date . One troy ounce corresponds to about 31.10 grams.
From this derives the weight of the most widespread gold bars in the world, to be understood those which constitute the gold reserves of the states, whose weight by international convention is 400 troy ounces, which correspond to 12.5 kg. so called London Good Delivery.
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It is obvious that small savers are the alder from being able to invest in ingots of this denomination.
For this reason, the large producers of ingots have over time offered the market ingots of the most appropriate sizes and weights for the demand.
Here are the most common formats of gold bars.
The gold bars offered on the small saver market are usually of cuts ranging from 1 gram to 1 kg .
This range of gold bars must be further divided into two distinct bands according to the production method:
The "bank bars" in the formats of 250, 500 grams and 1 Kg. They are produced by casting through continuous casting processes.
The "minted", proposed with the method of pressure coining on the plate, in the weights of 5, 10, 20, 50, 100 grams and 1 ounce.
Many operators supply the gold bars coined, in a transparent packaging in credit card format. The ingot, inserted in a certificate of authenticity and purity of the standard size of a credit card, is hermetically sealed in environmentally friendly PET cases.
The degree of purity of the ingots.
The quantity of pure gold in the ingots determines its purity which is expressed as a percentage or in thousandths. The ingots are produced with different quantities of gold although they generally have a purity value of 99.99% (999.9). Purity is always marked on the ingot, as well as on the ingot must be the certifier's mark, and the serial number.
In United Kingdom, to be considered investment gold, the ingot must have a purity of at least 99.95% (999.5) according to art.1 of law n.7 of 2000.
Some manufacturers also offer an anti-counterfeiting device on coined ingots, a hologram like the one on banknotes, called Kinegram®. In this case, the ingot is called Kinebar®.
The convenience of gold bars depends on the cut, purity and spread applied by the operator.
To evaluate the convenience of an investment in gold bars, there are some aspects to consider:
The first concerns the tax aspects of investing in gold. By purchasing bullion, like other gold investments, you do not pay VAT on investment gold. At the time of divestment, the capital gain is taxed as a financial annuity, and does not accumulate with the income of the declarant for personal income tax purposes.
Another aspect concerns the divisibility of the investment .
The gold bullion bar is not divisible, therefore it is necessary to decide well upstream the cutting of the bars to be purchased in order to make the investment divisible according to your needs. For example, if you decide to buy a 1 kg ingot with an investment of € 35,000, you must be aware of the fact that when you decide to divest, this operation will necessarily affect the entire investment.
The profitability of the investment in gold bars must also be assessed.
Although it is possible to buy gold bars of a few grams, the investment is not generally profitable since, the smaller the ingot the more the spread applied by the dealers is high.
This is mainly due to the fact that the production costs of an ingot that is 1 Kg or 10 gr. they are almost the same.
So the ingots to be taken into consideration for an investment that can guarantee a reasonable profitability of at least 5 years must be taken into consideration those weighing 100 gr. Up.
If the amount we want to invest is less than what is needed to buy bars of this format, then it is advisable to bet on gold coins that normally have better returns.
Market competition and the spread applied by operators.
Analyzing the prices on the ingot market, it should therefore always be taken into consideration that the purchase of a gold ingot is as cheaper as it is heavier.
However, this margin of difference is not rigid for ingots of the same weight. On the applied spread, the operator can act to adjust the spread according to the market.
It is therefore a good idea to evaluate the spreads applied by the operators by making a comparison with the competition. The lower the spread the cheaper the investment will be.
