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Should You Buy Gold Bars or Gold Coins?

If you are a first-time investor in gold bullion, you may find it difficult to decide whether you should buy gold coins or invest in gold bars. Both gold coins and gold bars are forms of physical gold and have a fineness of 999.9 or 24 carat gold. Both forms of gold bullion make for a great investment, and each have their advantages and disadvantages.

From an investment perspective, more preference is given to gold bars. If you are planning to buy gold bars, here are some important pointers:

  • Buy gold bars from a reputed dealer, which have been manufactured by a top refiner.
  • Since gold bars are heavy in weight, storing them can be an issue.
  • Gold bars work best when you make a large investment, as these become a real asset.
  • Premium on gold bars is fairly less.
  • Gold bars offer a better return on investment as compared to gold coins.

Capital Gains Tax or CGT is applicable on gold bars only when you sell them to earn profit.

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If you are planning to buy gold coins, then here are some pointers that will assist with your decision making:

  • Gold coins have a numismatic element and hence rare coins draw interested investors.
  • Gold coins offer a much higher flexibility on resale.
  • This type of gold bullion can be stored with ease.
  • Some of the British gold coins like gold sovereign and gold Britannia coins are free from CGT.

Gold coins cost much less than bars because of the low weight and small size.

These are some of the important aspects that investors should consider before buying gold coins or bars. Experts believe that investors can also have a mixed portfolio that contains both gold bars and coins. At the same time, if you are a new investor, it is better to start by investing in gold coins first.

One of the important aspects to consider before you buy gold bars or coins is the current price of gold.