Investors have many different options when it comes to the best ways to purchase gold bullion. Although silver and platinum have gained ground in recent years, gold remains the most prized and commonly traded precious metal. Gold owes part of its tremendous value to the long history of uses of the commodity. Thousands of cultures have used gold as a currency, and the metal has long served as a status symbol among rich elites.
Gold bars are an exceptionally effective way to amass a significant amount of bullion. Because gold bars have very little premium attached to their spot price, smart gold bullion enthusiasts use bars to obtain more pure gold than other gold products, such as coins or rounds, can generally offer. Simply put, gold bars might be your best bet if your intention is to invest in gold with as little premium as possible.
One common misconception is that gold bars are all the same. Like gold coins and gold rounds, bars come in various sizes and designs. Some mints strike their gold bars with intricate and unique face art, while others strive for a more rustic and simple appearance. Navigating the world of gold bullion bars can be challenging, but we’re here to help. Read on to learn everything an investor needs to begin buying gold bars from Hero Bullion.
History of Gold Bullion Bars
Globally, gold bullion bars have historically been an effective and common way to invest in gold. Because bullion bars offer extremely pure gold with a low premium over gold spot price, they are considered an ideal investment and trade vehicle in many countries. In fact, many popular banks in Switzerland, Austria, Canada, and some other countries distribute pure gold bars directly to account holders.
America’s historical relationship with gold bar exchange is a bit more complicated. Gold mining became a massive industry in the United States since the first gold was discovered in North Carolina way back in 1799. The Gold Rush in California kicked off the start of what became one of the most valuable gold trading markets in the world. Gold products of all kinds were produced, both by private mints and by the United States Mint.
Franklin D. Roosevelt’s Executive Order 6102 made it illegal to hoard gold bullion in the United States. In addition to stifling the trade of gold for several decades, the legal move also made the 1933 Double Eagle Gold Coin one of the most expensive bullion pieces in history. The effects of this order were observable for decades, as the industry struggled to cope with this crippling blow to the collectable and investment status of gold bars, coins, and rounds.
The gold exchange eventually recovered in the United States. Today, mints in countries around the world produce and distribute a wide variety of gold bars to retail investors. The United States is a major contributor to the global gold market; the country produced over 200 tons of gold in 2019.
Benefits of Owning Gold
We’ll cover the benefits associated with buying gold bars specifically later in this guide. But all forms of gold bullion come with a few inherent advantages for savvy investors. Some of the main benefits associated with buying and owning gold bullion include:
- Mitigate Risk. Many investors buy gold in order to effectively hedge against the risks inherent to the traditional stock market. Because gold is a physical, tangible asset, it is known to retain value when other commodities depreciate or become overly volatile.
- Longstanding Value. The historical value of gold is one of its biggest draws. While traditional stocks and bonds have only really been around for about two centuries, gold has been recognized as a valuable asset for thousands of years in various different cultures and global communities.
Pros and Cons of Gold Bars
If you’re reading this guide, chances are you want to choose a specific gold product to invest in. While there are undeniable benefits that apply to all of the gold bullion market, different types of bullion come with different advantages– as well as disadvantages. An informed consumer knows exactly what they want to do with their investments, and a solid portfolio will be tailored to your particular needs and desires. Versatility is a virtue; buying different types of gold bullion can help to ensure price appreciation and increase the overall value of your portfolio.
A few big upsides to investing in gold bars specifically include:
- Low spot price premium. It’s not possible to buy any gold product at spot price. The reason why is simple: distributors need to secure a profit for themselves. The additional price tacked onto the top of spot by distributors is called the premium. Different gold products come with different premiums, depending on how expensive a given product is to produce or secure. Gold bars offer the lowest premium over spot, especially when compared to gold rounds, coins, and novelty pieces.
- Wide weight variety. Gold bars come in a wide variety of different sizes. Some of the largest possible gold pieces you can buy are gold bars. It’s not particularly common to find a ten ounce or one kilo gold coin, for example. When you combine the large weight variety of gold bars with their low premium cost, the result is massive potential savings. Buying large gold bars with low premiums is one way that some investors expand their portfolio significantly without reaching too far into their wallets to pay additional fees.
There’s really one big downside to buying gold bars:
- Limited Designs. Investors who are extremely interested in beautiful designs on their gold pieces might want to consider investing in gold coins or rounds. While gold bars offer a long list of different sizes and generally boast a low premium over spot, most gold bars aren’t designed to be aesthetically pleasing. Many bars are complete with a matte finish that give them a rustic, simple appearance. Some gold bars are complete with unique and beautiful designs, but these bars are generally outliers and may come with an added premium.
Popular Gold Bars
We encourage you to look through the Hero Bullion website to get a feel for the wide variety of different gold bars we offer. Because so many private and government-backed mints produce gold bars, there really is something out there for every investor. Here are a few of the most popular gold bars we have in stock:
- Royal Canadian Mint 1 Oz Gold Bar. The unique matte textured finish of this one Troy Ounce gold bar gives onlookers something to look at. The obverse is the classic seal of the Royal Canadian Mint, complete with all relevant minting information, as well as the unique mint number attached to each bar. The reflective finish of the seal and lettering really pops when set against the matte texture of the rest of the obverse side of the bar. Flip this gold bar over to find a repeating design of the Royal Canadian Mint logo.
- Perth Mint 1 Oz Gold Bar. The historic Perth Mint has been the standard for gold bars, coins, and rounds for several decades. Struck with one Troy Ounce of .9999 pure gold, this piece honors the proud tradition of the Perth Mint. The design of this piece is visually stunning. The obverse depicts the Perth Mint logo, as well as the weight, purity, and material of the bar. The reverse pays homage to one of the most classic icons of the Australian continent, the kangaroo. It depicts a repeating kangaroo pattern. This gold bar is shipped in its original Assay security packaging.
- 1 Kilo Gold Bar (Any Mint, Any Condition). This bar is an excellent choice for investors who are disinterested in a particular mint design. Like we mentioned above, large gold bars cut down significantly on costs by minimizing the price over spot you pay. Buying an “Any Mint, Any Condition” product further limits cost, although the price is a tradeoff for the potentially unappealing designs of some bars. If your goal is to get as much pure gold as you can for your money, the “Any Mint, Any Condition” 1 Kilo Gold Bar is an unbeatable option.
- One Gram Gold Bars. We occasionally offer single gram gold bars. These small pieces are generally great as gifts. They’re low cost, and the gift of gold is a time-honored tradition in countries all over the world. The only downside to 1 gram gold bars is that they are a bit less economical than bigger pieces, meaning you’re likely to pay a higher premium for these small bars.
Are Gold Bars Real Gold?
This is a question we get a lot. To be clear: Hero Bullion’s gold bars are completely real. One thing to pay attention to when buying any gold product is the purity of the gold it contains. Most gold bars contain either .9999 or .999 pure gold bullion in various amounts, but some pieces from smaller mints may be composed of less pure gold. We recommend buying gold bullion bars with the highest possible gold purity, which is .9999.
Hero Bullion doesn’t sell gold plated or coated gold bars. These bars aren’t actually gold; they’re usually composed of cheaper metals and simply coated with a very thin layer of real gold on the outside. The best way to secure value for your portfolio is to target bars that are completely made of .9999 pure gold bullion.
Gold Bar Packaging Details
Hero Bullion takes its packaging process very seriously. We’ve heard countless horror stories of gold bars arriving to customers with scuffs, blemishes, and other imperfections. Many gold bars cost hundreds, or even thousands of dollars. We understand the significance of this kind of investment, and the last thing we want is for your portfolio to be ruined by improper gold bar packaging protocols.
Specific packaging processes depend on the gold bars you choose to purchase. Some gold bars, such as the 1 Oz Perth Mint Gold Bar, are shipped in their original assay card packages for added security. All gold bars from Hero Bullion are packaged securely and discretely. Please contact us with any specific questions you might have about gold bar packaging details.
Gold Bar Taxes
Gold bars are taxed the same way that all physical gold and silver holdings are taxed. If you possess physical bullion of any kind, you’re subject to the capital gains tax determined by your own marginal tax rate. This percentage caps off at 28%, which is good news for gold collectors in some of the higher tax brackets in the United States. You should know that capital gains taxes only need to be paid after an asset is sold. While you’re holding the gold bars, coins, or rounds, you owe nothing in additional taxes.
The length of time an investor possesses a gold asset may also contribute to the taxes they owe. Typically, long and short-term capital gains are taxed differently. Many investment professionals advise that gold investors hold onto their bullion products for as long as possible in order to avoid paying the generally higher short-term capital gains taxes associated with short holdings of precious metals.
The Bottom Line: Investing in Gold Bars
Gold bars present investors with a unique opportunity. While gold coins and rounds are often purchased with the expectation that their collectable value will make them more expensive over time, gold bars are valuable almost exclusively for their precious metal content. This allows investors who are confident in the price of gold to invest directly in the asset. Gold bars sometimes include brilliant designs, but many bars are aesthetically utilitarian, prioritizing a low premium over complex and beautiful art.
For the investor who has faith in the historical price appreciation of gold as an asset, gold bars come highly recommended. Hero Bullion offers a wide selection of gold bars from exotic mints around the world.