Gold Bars vs Gold Coins: Which is the better investment?

Why buy Gold Bars?

Gold bars are 24 carat (99.99% pure) and come with an assay certificate. They are manufactured to Good Delivery Standards, ensuring quality and authenticity.

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Multiple sizes available

Gold bars range from 1 gram to 1 kilogram. Smaller bars (20g, 1oz) are ideal for regular purchases and beginners, while larger bars (1kg) suit investors making significant single investments.

Standard for Gold investment

Gold bars are exchangeable worldwide to any bullion dealer, provided they are produced by an LBMA approved refiner. This universal acceptance makes bars highly liquid investments.

Ideal for long-term investment

Gold bars offer a lower cost per gram compared to coins, making them better suited for investors who plan to hold their gold without selling portions over time.

Cheaper premium compared to spot price

Larger bars carry smaller premiums over the spot price. For example, purchasing a 1kg bar versus ten 100g bars can save approximately 1%. However, this trade-off reduces flexibility when selling.

Flexibility considerations

• 100g and 1oz bars: Optimal balance for most UK investors
• 50g and 20g bars: Convenient with low premiums
• 1kg bars: Most cost-effective for large investors

Disadvantage of Gold Bars

Large bars limit flexibility when rebalancing your portfolio. Selling an entire bar when you only need partial funds may reduce profitability. Additionally, concentrating your investment in a single large bar means your whole investment depends on that one asset.

Alternative approach: Consider purchasing several smaller bars or bullion coins for greater flexibility.

Why buy Gold Coins?

Gold coins are produced by government mints specifically for investment purposes. Popular coins include:

• British Britannia
• South African Krugerrand
• Canadian Maple Leaf
• American Eagle
• Vienna Philharmonic

Coins are typically 22-carat or 24-carat gold, with the standard size being 1 troy ounce (31.1035g).

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Wide range of varieties available

Gold coins come in various sizes: 1oz, 1/2oz, 1/4oz, and 1/10oz, plus full and half gold sovereigns (7.32g). The Krugerrand typically carries the lowest premiums, making it excellent for beginners.

More flexibility

Coins allow you to split your investment into manageable portions. You can buy and sell incrementally, reducing market risk through gradual transactions. Gold Sovereigns are especially well-suited for this approach.

Highly liquid

Gold coins enjoy universal recognition, making them easy to resell globally. 1oz coins are the most actively traded, ensuring you can always find a buyer.

Capital Gains Tax benefits

UK legal tender coins such as Britannia and Sovereign coins are exempt from Capital Gains Tax (CGT). This means you can make unlimited gains without CGT liability - a significant advantage for UK investors.

Collectible items

Some coins carry higher premiums due to their collectible nature. Historical connections and commemorative designs add value. For example, the 2012 Sovereign was issued to commemorate the Diamond Jubilee.

Disadvantage of Gold Coins

Coins typically carry higher premiums than bars due to design and minting costs. However, buying in bulk can reduce these premiums. It's important to distinguish between bullion coins (for investment) and collectible coins (numismatic value).

Summary

The choice between gold bars and coins depends on your circumstances, preferences, and financial goals. Consider these factors:

• Premiums: Bars generally have lower premiums; coins cost slightly more
• Flexibility: Coins offer more options for partial selling
• CGT implications: UK legal tender coins are CGT-free
• First-time investors: Coins offer an excellent introduction to gold investing
• Diversification: Consider holding both bars and coins

There is no definitive right or wrong choice - both bars and coins serve valuable roles in a precious metals portfolio.

For personalised advice, contact our team on 0207 242 7521.