Financial Planning

Gold has long been an important and valuable commodity on the market for both investors and collectors, which is why they often try to buy gold coins in large quantities. Many gold traders and purchasers feel that investing in gold coins can be a financially wiser choice than purchasing gold bullion. In order to determine why gold coins are considered better than gold bullion, it is best to have a solid understanding of the difference between the two, as well as the common misconceptions associated with them.

Gold Bullion

Gold bullion is a refined and recognized weight of gold that can be purchased at the ongoing rate of gold, in addition to a small percentage of refining, fabricating, and shipping the gold. Most commonly, we tend to think of gold bullion as large bricks or bars. These gold bullion bars comprise a large amount of the gold bullion owned by banks and governments.

Gold Coins

Gold coins are crafted either primarily or completely of gold. Almost since coins were first introduced into the monetary system, gold has been the metal of choice, mainly for of its natural value. Today, the majority of gold coins are crafted as either a collector’s item, or as bullion coins, designed primarily for the purpose of investing in gold.

A Common Misperception About Gold

There seems to be a wide misunderstanding in the marketing world concerning what gold bullion actually is. Many believe that bricks or bars of gold are the only available source of gold bullion, and that gold coins are not gold bullion. A large amount of the public have a common misperception that gold bullion in the form of bars are more desirable and cost effective than gold coins. These same people also believe, inaccurately, that gold coins are primarily only collector’s items with little intrinsic value or demand.
The value of a coin is determined by its grade, rarity, popularity, and quality, as well as its price in the investing world.

Gold Coins Versus Gold Bullion

As a working usage, such as in manufacturing or artistic design, large gold bullion bars can be an extremely cost efficient way to purchase gold. However, in the world of investing and trading, gold coins are actually much better than gold bullion bars. Many fees are involved with liquidating a large bullion bar, such as refining or handling fees that can be avoided with the purchase of gold coin. In addition, a large brick of gold can be much more difficult to sell and trade, or convert into money than the same quality and value of gold in the more convenient size of a gold coin.

Yet another factor that makes gold coins the more desirable method of investing in gold, is the mass production of the gold coin. Because gold coins are efficiently mass produced by the government, they are available at incredibly competitive prices, and are almost universally recognized, in comparison to a gold bullion bar produced by a refiner. Not only can gold coins be resold to gold buyers and traders, but to coin collectors as well, widening the available market for the investor.