Gold bars as an investment

Gold bars

Gold bars are normally not only used as a functional tool of investment. From time to time they serve as a present as well. In the United States there are separate tax structures for separate states. Tax free gold bars can be bought over the internet via bullion exchanges and storage providers. They can also be physically bought. Gold bars are available in many different weights, reaching from 1 gram to 25 kilo. Gold bars are produced by different mints, e.g.: Umicore S.A., Degussa GmbH, Credit Suisse, Perth Mint and many more. Smaller bars are being punched, they can be determined due to their angular shape. Gold bars of 250g however are being poured. That's why bigger bars have rounder corners, the surface is not very well-proportioned and the mesurement is slightly different. While punched bars rather shine, the poured ones shine rather dull. The weight is always punched in as well as the origin of the bar and with big bars even a serial number.

Gold bars: Fineness

Pure gold has a fineness of 24 carat. Since the reorganization to the metric system, fineness is mostly showed in mill: thus 24 carat equals a fineness of 999 mill.

Buy Gold bars or coins?

The purchase of a larger amount of gold is accompanied with higher surcharge. The reason for that: A smaller unitization requires higher production expenditures. That's why it is normally better and more favorable to buy bigger gold bars, provided you have enough money. In early 2009 one gram of gold coins cost approx. 32 Euro, while the same amount in gold bars cost just 20 Euro.

Buy gold bars: What do I have to consider?

Storage costs:

If you want to store your gold at home one must reckon that the insurance compay will rise the contribution. Alternatively one can borrow a vault in a bank, but this will be charged as well.

Resell gold bars:

Most people use gold bars a long term investment. This doesn't mean that you don't want to change them back in money one day. But one have to pay attention to the difference between purchase and sale, at least if you want to turn a profit. Thus you should always watch the current gold price on the charts. Here you can buy gold bars.

Gold bars as a long term investment:

It's obvious that you can't make such a profit as with shares or funds. Gold is always a medium of a secure long term investment to get your money quickly into safety (see financial crisis).

How to buy gold bars tax free?

Tax free gold bars can be bought. US tax laws are very complex as in some states you are liable for capital gains tax if you sell gold at a higher price than the one you paid for when you bought. No taxes are slapped on purchase. Nothing is tax free but there are ways to circumvent the tax process without illegally trying to evade the payment of taxes.

To buy American eagles form a gold dealer registered with GST will make the buyer liable for GST or sales tax, but not when it is bought online or from a private seller. The best bet lies in a prospective gold bar buyer checking out with his tax adviser first before going for the purchase.

Like any investment, for gold bars too expert advice from the finance person should be sought. And in the US there are separate tax structures for separate states. Tax free gold bars can be bought over the internet via bullion exchanges and storage providers. They can also be physically bought.

Gold Eagles being legal tender in the US like Maple Leafs in Canada, sale tax is exempt on purchase and sale. Great Britain does not tax gold coins as they are legal tender but some gold bars are liable for value added tax.

Banks in Europe, mainly Switzerland, Austria, Liechtenstein and Switzerland are known to have exclusive gold bars counters where gold bars can be bought and sold without paying a single dollar worth of tax.

Super wealthy people from banana republics to semi-developed nations park their unaccounted money in banks all over Switzerland and Liechtenstein or register their companies in the Isle of Man or the Cayman islands. So it is equally possible for gold bars buyers not to pay tax on their purchases.

In 2004 the demand for gold bars as an investment alternative far exceeded demand for jewelry products as more gold investment products had been launched. It is financially wiser at times to hold gold than stocks or real estate which might crash. Bubbles burst easily in financial markets but not in gold markets unless gold looses its luster.

As gold bars are becoming part of the investment portfolio, more investors are opting for gold coins and bars which can hedge losses in other risky financial instruments. People buy more gold bars than ever or park their money on gold when the economy slumps and other avenues disappear.

Just before the US elections, Republican Ron Paul tabled a bill for abolition of taxes on certain gold bars and bullion. But now things have changed and with a new US administration assuming office shortly, tax breaks on gold bars are dependent on new laws. Willful investors must keep their nose on the ground and take every opportunity where taxes are not levied.

Gold is the oldest form of investment, purest form of money and more durable and an ultimate asset which can survive volatilities in economy and the financial markets. No one how powerful can mess this up.

Gold bars: Table

For the purposes of this definition bars and wafers are commonly traded in the following weights:

Unit Weights Available Kilos Grams Troy Ounces
London Good Delivery Bar 12.5 Kilogram 12.5 12,500 400
Kilogram Bars 1 Kg 1 1000 32.15
Grams 500 gram 0.5 500 16.07
Grams 250 gram 0.25 250 8.04
Grams 100 gram 0.1 100 3.22
Grams 50 gram 0.05 50 1.61
Grams 20 gram 0.02 20 0.64
Grams 10 gram 0.01 10 0.32
Grams 5 gram 0.005 5 0.16
Grams 2.5 gram 0.0025 2.5 0.08
Grams 1 gram 0.001 1 0.03
Ounces 100 ounce 3.11 3110 100
Ounces 10 ounce 0.31 311 10
Ounces 5 ounce 0.16 155.6 5
Ounces 1 ounce 0.03 31.1035 1
Ounces ½ ounce   15.56 .5
Ounces ¼ ounce   7.78 .25
Taels 10 taels 0.37 371 11.913
Taels 5 taels 0.185 185 5.9565
Taels 1 tael 0.371 37.05 1.1913
Tolas 10 tola 0.117 116.6 3.75
Tolas 5 tola 0.0585 58.3 1.875

(1oz = 31.1035 grams)
(1 tael = 1.1913 oz)
(1 tola = 180 grains troy = 0.375 oz)

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