Gold Coins vs Bars
Gold Coins
Gold coins are either “bullion” coins or “collector’s” coins (also called numismatic coins). The value of bullion coins closely reflects the underlying value of their gold content. Supply and demand drives the value of collector’s coins. This website only deals with bullion coins. Many national mints issue gold bullion coins which come with different gold contents. The UK mint issues gold bullion coins known as Sovereigns and Britannias, which are not subject to capital gains tax for UK citizens.
The market for gold bullion coins is very liquid so sellers and buyers can be found easily. Gold dealers will buy gold bullion coins more easily than gold bars, which may need assaying (verifying for gold content) or refining first. Fake gold coins are less common than fake gold bars and easier to identify. Gold coins have the added endorsement of a government mint, which provides a level of guarantee.
The fineness of gold bullion coins varies between about 916.7 and 999.9. The gold content of bullion coins varies between 0.1 toz and 1 toz. The price of gold bullion coins varies between about £300 and £3,000.
Gold Bars
Most gold bars are 999.9 Fine, also expressed as .9999, 9999 or “four nines”. Gold bars are either small bars or big bars. Small bars come in weights ranging from 1g to 1000g. The cost of small bars ranges from about £100 to £100,000. The market for small gold bars is liquid so sellers can be found easily. Small gold bars are available in many different weights. Usually only dealers can spot fake bars which are harder to spot than fake coins. This is because gold bars can be drilled out and filled with an alternative such as lead. As a result assaying (verifying for gold content) or refining may be necessary before a dealer will buy gold bars, unless they supplied the gold bars in the first place.
Small gold bars are manufactured by casting or minting. Casting involves pouring molten gold into moulds. Minting involves precision cutting and stamping. Cast gold bars have a rougher look and offer a lower premium over the spot gold price. Minted gold bars feature a polished uniform finish and carry a higher premium due to the intricate craftsmanship.
Small gold bars can be more convenient for larger value purchases, but you should also consider what denominations you might want to sell the gold in, taking in to account any tax implications as gold bars are subject to capital gains tax.
Big bars (also called good delivery bars) have a standard gold content of 400 troy ounces and weigh about 12kg. Accredited refiners manufacture big bars, accredited vaults store big bars and accredited couriers transport big bars. Due to big bars costing over £1M each, they are not usually suitable for private buyers. However it is possible to buy partial ownership in a big bar.
Gold bars usually have the following information engraved on them – the refiner’s name, serial number, weight and fineness.
Whether you choose gold coins or gold bars, buying gold bullion requires a clear strategy. Avoid buyer pitfalls and buy gold securely with confidence using our master guide on how to buy gold.