From jewelry to edible leaf sheets, gold comes in many forms. However, there are only two winners when it comes to investing in physical gold in a gold IRA: coins and bars. But is there a difference between the two?
While both coins and bars are made of gold, they have distinct characteristics that make them more suitable for different types of investors.
When investing in gold for your retirement, understanding these two differences can be the difference between a successful investment and a hassle. In this post, we’ll take a closer look at the pros and cons of gold coins and bars, so you can make an informed decision before investing in gold.
The Case For Gold Coins
While the answer to this question might sound obvious to many, the truth is that when it comes to investing, not all gold coins are made equal.
There are many different types of gold coins, with them varying in terms of size, purity, designs, rarity, etc. That being said, depending on what investment vehicle you choose, there might be certain restrictions on which gold coins you can invest on.
Most gold coins used for investment are minted by governments or private organizations which comply with certain regulations. Such coins will usually be stamped with a legal tender face value but will also possess an intrinsic value depending on the amount and purity of gold used to make the coin.
Coins are not only great in terms of portability but also come with the added value of being potential collectibles, which is why many investors prefer them over gold bars. However, due to the costs associated with their production, coins can be more expensive to acquire than gold bars even when the actual gold content is lower.
The Other Side of The Coin: Gold Bars
Gold bars are the “gold standard” when it comes to acquiring physical gold as a means of investment. Usually produced by refineries or private mints, these can also vary in terms of weight, purity, shape, etc. but have an important difference when compared to coins: they don’t have a face value.
Gold bars tend to be more cost-efficient than gold coins due to the lack of complex designs and other factors associated with coins. However, due to their size and nature, they can be more difficult to deal with in terms of logistics.
In terms of storage, however, gold bars actually require less space than gold coins if you take their value into consideration.
Something else to consider is that as gold bars do not have value as a collectible, their value is limited to metal value. This can be great for anyone looking to reduce the risk associated with gold investing, but in the case of collectors and experts, it can prevent them from investing in them.
When you are saving for your retirement with gold, you can choose a mix of gold coins and bars. There is no need to choose one of the two for your gold IRA, and you can get the best of both form factors.