Why gold bars are a good investment
Gold is a precious metal that captures the imagination. It is an ancient means of payment. Literally: gold was already being used as a medium of exchange in ancient Mesopotamia - 3,000 BC. Other ancient civilisations followed their example. As a result, gold slowly became established as standard means of payment.
Today, gold is no longer a direct means of payment, but it remains a good investment. The most common investment are gold bars, as they are comparatively the cheapest in terms of value for money. Why is this?
Standardization on weight and purity of gold
First and foremost, the value of your gold is determined by its purity and weight. These rules are fixed:
- Weight: This is measured in troy ounces. One troy ounce equals 31.1035 grams.
- Purity: This is measured in carats or decimals, with 24 carats representing pure gold.
To calculate the value, multiply the weight by the purity grade and the current market price. The purer gold is, the higher the price will be.
Gold bars versus gold coins
The first difference between investing in gold bars or gold coins is in the cost of production. The larger the size of the gold bar or coin, the lower the production cost. Gold bars tend to be a lot bigger than coins, pushing down their price.
Next, some gold coins have a certain collectible value. Those coins are usually produced in a limited edition. When a coin is scarcer, its price rises. You don't have this with gold bars: there, purity and weight alone determine the value of your bar.
Gold bars versus silver bars
If we then go on to look at the difference between gold bars and silver bars, gold also emerges as the winner. This is because in Belgium, gold is not taxed. In contrast, 21% VAT applies to silver. For individuals, it is therefore less interesting to invest in silver bars.
Gold bars versus gold jewellery
Next, when we compare gold bars with gold jewelry, the production cost of a bar is much lower. With jewelry, you also pay a maker's cost for the designer's labor. This is included in the price of the jewelry.
By the way, did you know that, according to Belgian legislation, you can only talk about gold in jewelry if it is at least 18 carats? This means that gold jewelry must consist of at least 75% gold. Otherwise jewelers are not allowed to call it gold. For investment gold, this rule does not apply. There, purity is merely a measure of price.
Gold bars at steep discounts: best not to trust them
Are you tempted to invest in gold bars? Then be sure to do so from an authorized producer. They will give you a certificate of authenticity so you can easily sell them again afterward.
It is also best not to trust forward gold sales. These are gold bars at a steep discount because the gold still has to be mined. The problem is that you cannot be sure whether they are fraudulent. After buying the gold, you will receive your certificate, but there is no certainty that the gold will actually be delivered months later.
Look no further for your reliable gold partner
When it comes to a precious investment like gold, it is best to do so with an established and reliable partner. At Value Shop, we are here for you. We guarantee you fair prices based on current market values.
Wondering what types of gold bars we offer?