What To Look For In Purchasing Gold Bars

Since time immemorial, investing in gold has been a laudable pursuit for investors around the world. Gold is a popular choice in the precious metals commodity market for its ability to retain its value, its ability to ward off inflation, and its security during times of economic turmoil. It can also be acquired in so many different configurations it can be daunting to choose only one.

But for those of us who want to have something more tangible in physical form (as opposed to stocks for futures), buying gold in the form of coins, jewelry, bullying, and bars is a viable alternative. Knowing what to look for when buying a gold bar can be a bit tricky, however, we’ve put together a quick guide of what to look for when purchasing gold bars. Read it below.

Size

When it comes to sizing up a piece of gold to buy, you’re not really looking at its length, width, or depth. You’re actually looking at how many grams of gold is in it. Remember that some gold comes with other types of metal in it – more on that in a moment – and the size calculation reflects as much.

There are two common measurements associated with precious metals. These are going to be grams or Troy ounces. Grams are a standard use of measurements comprising a range that can be as small as 5 grams to a kilogram (1000 grams) or more. A Troy ounce is much more common in the gold game, comprising 1.09 ounces or 31.103 grams.

Purity

 Purity, in a broad context, simply means how much pure gold is in your gold bar or boolean. As a general rule, most goals has some measurement of other types of metal. That’s why understanding the purity ratings of gold is critical. .999 and .9999 are often numbers associated with precious metal purity. The only difference between these two distinctions / designations is the former refers to fine gold that has some degree of other precious metals processed into it while the latter refers to pure gold which has almost no other metals in it.

Gold purity is also measured in carats. A karat is merely 1/24 of a percent for gold purity. That’s why 24-karat gold is a high value, high demand item. Check the purity of the gold prior to making a purchase so you can be certain it has the qualities you desire.

Cost and Security

Much like every other investment you’ll ever make, cost should be a factor in your gold purchasing decision. Supply and demand, and the changes inherent with the process, affect the price of gold. So, it can vary depending on what’s going on with other market factors. So be sure to stay on top of your research and market reports so you know you’re getting the best value for your investment. After you buy the gold, you’ll need to figure out a way to store it. A vault, safe, or other secure means of storage is vital to keep your gold safe.

Payment Method

If you decide to finally take the plunge and purchase gold, you should decide how you’re going to pay for it. As with any other investment, there are several ways to safely and securely buy your precious metal. Online gold dealers will likely accept the traditional payments of a credit card, cashier’s check, or even a third party payment apps such as PayPal, Stripe, or Venmo. Wire transfers and Cryptocurrency (such as Bitcoin) are other possibilities depending on the dealer. Discounts for using credit cards when buying a gold bar are worth asking the vendor about as well.

How Quickly You Can Liquidate

 

So, why is liquidity important as it relates to gold? Liquidity is a bit of an abstract concept. If the liquidity is high, that means that there are more orders to buy and sell within the market. Ergo, it’s more likely that you’ll receive a higher price for selling the gold or a buyer may be willing to shell out more for it due to the high liquidity. It also means that the lowest price somebody is prepared to accept for buying the item will get closer to the other amount. Bids and offers tighten up around these vectors, making it easier to find buyers without cutting the value of the asset you’re trying to sell. Low liquidity is the reverse of this concept and there are many factors that go into attenuating liquidity risk.