Investment in either bullion coins or bars is a great step toward securing your wealth; however, there are certain pros and cons between the two.
Investment strategies and platforms are constantly changing, meaning potential investors must do additional research to stay informed. The markets for tradeable goods fluctuates by the minute, increasing the time required to manage accounts, assets, and resources.
One asset that has held strong throughout market fluctuations and economic instability is precious metals bullion. When compared to other assets, gold, silver, and platinum bullion provide remarkable security from inflation.
“Bullion” is the term used to refer to precious metals used as investment (rather than collectibles), and bullion is available as either bars or coins. So what is the advantage of bullion coins or bullion bars?
Below we will present a detailed look at both of these investment forms, discuss the benefits of each and describe their investment value.
Gold and silver bullion bars are mostly manufactured by private mints, bars minted by a sovereign governments are uncommon.
Bullion bars are generally less expensive (lowest premium over spot). By investing in bars, therefore, the savvy investor is able to maximize the metal purchased for each dollar.
Bullion bars also vary in size, ranging from 1 gram to 100 ounces. Commonly, larger bars carry lower premiums, so price per ounce is generally more beneficial for investors with larger bars.
It is important to keep in mind, however, that privately minted bullion is not backed by a sovereign government.
Sovereign coins are not to be confused with privately minted rounds. Coins are most commonly distributed by banks and other government agencies. Coins can also be used as currency within the issuing country, which is generally unwise because the value of the metal generally exceeds the face value of the coin. This security, however, increases the liquidity to precious metal coins with both the investment market and the consumer market.
Bullion coins often have higher premiums than privately minted rounds or bars.
Precious Metal Bullion Buying Factors
Where, or from whom, you choose to purchase precious metal bullion is important. Buying from private companies that are new or feature a low inventory number should draw a red flag. Unreputable companies create knock-off coins and bars, swearing by them with high praise and other promotional measures.
It is hard to track a private selling agency, but there are a few signs you can look for to leave your mind at ease. (Continue reading: How to Choose a Trusted Precious Metal Dealer)
The best practice with precious metal bullion is to shop around. Locate the trusted bullion dealers with good online reviews.
Sovereign Bullion Coins vs. Bars: No Wrong Choice
In the end, you have to set your own personal investment limit before choosing from these options. Buying bullion in bar form may involve a higher risk, but the potential reward is greater for the investor. If you are looking to go the bar route, do your market research beforehand.
If you are interested in making bullion bars or sovereign coins your next investment, Provident Metals has a variety of options and metals to fit your needs and budget. Browse our inventory, or check out our Bullion Investment Resources to learn more.