It all comes down to production costs. Gold coins can be more expensive to produce than gold bars due to their intricate design, emphasis on condition and appearance, and therefore higher labor and machining costs. In addition, the price of a gold bar is mainly based on its weight. Gold coins kept in good condition, like most coins, become a little more sought after as they age.
One reason is that coins melt or become damaged. This is not the case with gold bars, which are worth exactly the amount of gold they contain. Premiums are added to the spot price of gold for a variety of reasons. These are usually due to costs associated with acquiring and manufacturing metals.
Buyers of gold bars should check websites such as the Better Business Bureau and Ripoff Report to learn more about a gold seller's reputation. When financial markets are calm, investment-grade gold bar prices are slightly above the fluctuating spot price of gold. The United States adopted gold as its official standard of value in 1879, but in 1933, during the Great Depression and only 54 years after its adoption, FDR abandoned the gold standard. Although minted gold bars have a slightly higher premium than cast gold bars, they tend to have a better resale value.
About half of all gold mined today (49%) becomes jewelry, which is still the biggest use of gold. So what justifies buying gold coins? First of all, while the premiums are lower on the bars, if you really like the look of gold coins, do it. Gold ranges from 1 gram to 1 kilo, making buying, transporting and storing gold much safer and more affordable. Gold bars have little historical or traditional value and are traded exclusively for their gold content.
For them, the convenience of knowing that buyers trust a golden maple rather than a private mint gold bar is paramount. A relevant benefit of gold coins is the possibility of selling them in the blink of an eye and at a slightly higher premium than most gold bars. The additional price to purchase physical gold bullion products is due to costs associated with refining, manufacturing, minting, marketing, covering and storing the individual gold bullion products for sale. Gold is extremely rare; a miner is more likely to find a five-carat diamond than a one-ounce gold nugget.
Gold bars should be priced very close to the spot price of gold, with only a small additional margin from the mint and the trader. For this reason, simple gold bars tend to be a popular choice among investors looking for gold as a safe haven investment. They may not bring the same amount of money, but gold coins do have value and can work together with other types of gold.