New buyers are attracted to gold everyday,
not only for its beauty, but because gold is the uniquely private, personal, and portable way
to hold some real wealth. With the incredible amounts of dollars flowing around the world, it's
no wonder that gold consumption increases every year. As always, a certain amount of that wealth
is placed in gold. Gold has always been the private, permanent, and secure way to hold a percentage
of your assets.
At Onlygold.com we provide comprehensive information
about gold, its properties, it’s history, its cost, and the many forms of bullion gold available. We hope to help you
make an informed decision about what type(s) of gold suit you best.
Gold Coins vs Gold Bullion
buyers often tell us: "I want just to buy some gold bullion. I'm not interested in coins, yet what I see offered everywhere is gold coins. What's that all about?" For
years, we have heard this comment from
many of our clients.
this is a misunderstanding of what bullion
is. The common perception is that rectangular
bits of gold ("bars") are the most cost effective, and perhaps the only available, form of gold bullion. The same thinking has it that round bits of gold ("coins")
are limited in supply, expensive, and
perhaps, to some extent, collectors'
When you go to buy gold for gold's sake, what you are looking for is bullion. Bullion is a recognized weight and fineness of gold that you can purchase for the current price of gold, plus the small percentage costs incurred in refining, fabricating, and shipping that bullion to you.
word 'bullion' has a very simple definition:
it is simply a refined and stamped weight
of precious metal. Our traditional view
of gold bullion is the large gold 'bricks'
that we imagine are stored in Fort Knox.
You might remember seeing them in the
old James Bond movie "Goldfinger."
sure enough, much of the world's bullion
gold is in the form of refined gold in
large bars, held in central bank storage.
These are the "London good delivery" bars
of approximately 400 troy ounce size,
refined and cast by the various private
refiners worldwide, and accepted for
'delivery' into London and other major
These large bars are an efficient way to trade physical gold, but they're best left in the care of a registered storage facility. However, if you have an actual use for the gold, they can be the most cost-effective way to buy it. They're useful, for instance, if you're going to make something that requires about 28 pounds of gold as a raw material.
But if you don't actually make use of them, these bars can be costly to liquidate once removed from storage. You may encounter assay, refining, or just handling fees in trying to liquidate that size bar. It's much more difficult and time-consuming to liquidate a chunk of gold that is worth over $100,000 than it is to sell the same amount of gold in more convenient and tradable sizes.
bars of gold in sizes from the tiny 1-gram
jewelry trinkets up to 32.15 ounce kilogram
bars have also been poured by various
refiners around the world.
These are very popular in the retail gold bullion market worldwide, particularly in parts of Europe, the Middle East, and Asia. Buying gold in bar form gives people around the world a way to build wealth without depending on the changing value and acceptance of the local currency. For people everywhere in the world, a gold hoard is a private and permanent hedge against many possible contingencies.
Today, in North America and other parts of the world, gold bullion 'coins' backed and guaranteed by their issuing government are the most popular form of traded gold. How did that come to be?
course, gold coins have been used in
trade for thousands of years. The concept
of a government-guaranteed measure of
gold was what originally gave 'money'
its power and legitimacy. But with the
end of circulating gold coins in the
world during the 1930's, gold lost its
link with everyday currency, and people
began to think of gold coins as collectible
artifacts from our monetary past. "Gold coins," no
longer produced as money, came to be
considered something scarce and obsolete.
that changed in 1967 with the introduction
of the gold Krugerrand. That year, South
Africa introduced a radical idea in bullion:
Government-issued gold bullion in convenient
one ounce form, "gold coins for the people," struck
in unlimited quantities, and distributed
at the current spot price of gold plus
a small percentage. By assigning these
coins a nominal face value, their legal
tender status avoided the restrictions,
duties, and taxes that many countries
levy on raw gold bullion.
Now, these gold coins have come to dominate the U.S. gold market, mostly in the form of bullion coins containing exactly one troy ounce (31.15 grams) of pure gold. South Africa pioneered the 'round bullion' concept, but they were followed by Canadian Maples, Chinese Pandas, and, in 1986, the U.S gold Eagles. Since then, countries such as Australia, Austria, Great Britain, and Singapore have also issued such coins, with varying degrees of success. But each coin has the advantage of guaranteed purity, exact weight, and total liquidity worldwide.
If you want possession of bullion gold, your best bet is the guaranteed bullion coins issued by the various world mints. In the U.S., American gold Eagles are probably your best choice, although Canadian Maple Leafs, South African Krugerrands, Chinese Pandas, and Australia's bullion coins each have much to recommend them.
Although we have access to the larger bars if our customer just feels like having enormous blocks of gold, we strongly recommend that our clients purchase the modern bullion coins, even if purchasing hundreds or thousands of ounces of pure gold.
Gold bullion coins in the last twenty years have become the most liquid, divisible, and accepted form of gold bullion worldwide, and they enjoy a much more favorable 'spread' than bullion bars. In the U.S., they are simply the smartest way to buy gold if you are going to take physical possession of the bullion yourself.