There are several options for investing in physical gold. However, not every gold product is a good investment. In fact, investors are left with only two product variants if the yield aspect is decisive – gold bars in various denominations or gold coins.
Gold does not automatically promise a good return
Gold is traditionally considered a stable and crisis-proof investment. However, by no means all gold products are equally suitable as investments in terms of yield. For example, gold is the classic precious metal in jewelry processing. However, the value of a piece of jewelry is not only based on the pure material value. The artistic design, the individuality of a design and the quality of craftsmanship often contribute much more to the value of a piece of jewelry.
Those who eventually need the money invested in jewelry often receive no more than the pure material value that can be obtained by melting down the jewelry. Gold jewelry, just like works of art or antiques in which the precious metal was used, is an investment that has a value corresponding to the purchase price exclusively for experts and collectors. Therefore, jewelry, antiques or art objects are poorly suited for investments with an eye on returns.
For classic investments in physical gold, gold bars or gold coins are far more suitable.
Gold bars – the denomination matters
If the focus of an investment in gold is clearly on the return, gold bars are best suited. The production of gold bars is quite simple. The shape of the bars is simple. Therefore, they can be produced without much effort. The object receives only an embossing with information about the manufacturer’s name and the weight and fineness of the bar.
Therefore, the bar price and the material value are relatively close to each other. Also, the selling and buying prices for gold bars do not differ too much. If a gold bar were bought and sold again on the same day, the buyer would have to expect only a small loss.
Nevertheless, investing in gold bullion is only worthwhile if the investment is made for the long term. In order not to make a loss when selling, investors should wait until the value of gold has increased by about one third. In order to generate profits, the increase in value must be even higher.
It is not advisable to use small bars up to 5 grams. They are difficult to resell and buying and selling prices are the most divergent.
Gold coins – bullion or collector coins
Gold coins are distinguished between bullion and collector coins. Collector coins can sometimes generate large profits, because material value and collector value can diverge widely, but are more suitable for investors who know something about it.
For bullion coins are more suitable large coins, because so lower unit costs. Well-known bullion coins are for example Krugerrand, Maple Leaf or Eagle.
