Which form of gold is best to invest in: coins, bars or jewellery?

Why invest in gold?

Gold is a valuable commodity. It retains its value even in times of inflation. Gold stocks are limited and grow only slowly. As a result, supply is limited and demand is often high. This makes it a stable and safe investment.

In addition, there is no counterparty risk when you invest in gold. When you invest in stocks or bonds, the party you invest in has to meet their obligations. If that party gets into financial trouble, you risk losing money. This is a risk you don't face when investing in gold. 

Depending on your goals, preferences and financial situation, you have several gold choices. The most common ones for individuals are coins, gold bars or jewellery. The common denominator between these three products is that they are all made of the same material: gold. 

However, gold prices are very volatile. Plus coins, bars and jewellery are processed products. This means you also have to add the production cost to the gold value. The larger the size of the gold coins or bars, the lower the production cost. On the other hand, smaller formats are often easier to sell. So which trade-off is best to make?

1.      Gold coins

A first important advantage of gold coins is that they are easy to sell. There are a number of globally recognised gold coins, such as: the American Eagle, the Canadian Maple Leaf and the South African Krugerrand. This makes them easy to sell. 

Popular gold coins also have standardized specifications. By this we mean a fixed weight, purity and design. So they fall easily verifiable which reduces the chances of counterfeiting. Plus, gold coins always retain their intrinsic value as it is based on the gold price. 

A final important advantage is that gold coins can be bought in smaller quantities than gold bars. This makes them an attractive option for novice investors. You can start with a modest budget to see if investing in gold coins is for you.

On the other hand, there is a wide range of coins. This is a disadvantage because not all coins are equally well-known. In addition, you also have the distinction between investment and collector coins. Whereas with the former kind it is easy to determine the value, with collector coins it is a different story. Some coins are sought-after and have a higher collector's value. However, this is often difficult to determine and strongly depends on when you sell. 

Another disadvantage of gold coins is that they are physical products. So you have to store and keep them somewhere. This can add extra insurance costs if you want to protect them extra. Coins are a lot smaller than gold bars, though, which makes it easier to keep them at home.

Curious which coins you can invest in at Value Shop?

2.      Gold bars

With gold bars, you get value for money. Unlike coins, lower premiums apply to gold bars on top of the gold price. This is because a gold bar has less collectible value. In a nutshell, you get more gold for your investment.

A very important point to note about gold bars, is that it is best to buy them from reputable producers. The purity of gold bars is assured with those producers. You get a certificate of authenticity with them. This makes it easy to put them back on the market afterwards. 

A final advantage is one of a practical nature. Gold bars are easily stackable. You store them in a safe more easily than coins. With coins, it's harder to form nice stacks. Plus they take up a lot more volume for the same weight. 

One disadvantage of gold bars is their weight. Rods of greater weight you cannot just divide up. You have to sell them as a whole. This, especially with a large weight, can make them harder to sell. Also, not all brands of gold bars have the same global recognition. That is why it is extra important to buy your gold from a reliable dealer. 

In addition, you also have storage and insurance costs with gold bars. Because gold bars are worth a lot, it is best not to store them in the house. For the same reason, it is best to have them insured. As a result, you do have to deduct these extra costs from the final value of your gold. 

Curious which gold bars you can invest in at Value Shop?

3.      Gold jewellery

Of the above options, gold jewellery is the least good investment. Although, of course, that depends a lot on why you are investing in gold. If you are doing it because you want to invest as well as because you like to own beautiful things, then jewellery is an excellent choice.

 But as cited earlier, the price is calculated based on the gold and production price. Jewellery often requires more labour from the designer, so the manufacturing cost is higher. That maker price is then very complex to determine when you want to resell jewellery. Therefore, jewellery is the least attractive option.

Conclusion

So the choice between gold coins, gold bars and gold jewellery depends heavily on a number of factors. What purpose do you want to achieve with the gold? If you have a smaller budget but want an easy investment asset, then gold coins are the best choice. If you prefer lower premiums and standardised pieces, then gold bars are the best alternative. If you also want to be able to use your gold personally, then it's best to choose jewellery. 

Purely financially, gold bars are the best investment. By the way, did you know that Value Shop has its own brand of gold bars? Our goldsmith, Value Trading, is the only one in Belgium with Responsible Jewellery Council (RJC) certification for Chain of Custody and Code of Practices. This means we value transparency in sourcing on the one hand. On the other hand, we respect ethical and environmental standards for fair, sustainable gold production. Each gold bar is also certified by an inspector recognised by the Royal Mint of Belgium. So you can invest in Value Gold with complete certainty, knowing that your investment is safe and secure. 

Be sure to check out our own range of gold bars as they are a wonderful deal value for money.