Buy Gold Bullion Bars
Gold Bullion Bars
Gold has played a part in many cultures, traceable back to the ancient Mesopotamians for ornamentation in the form of jewellery and also as a trading currency.
Gold bullion has for many years been an investment commodity and is available as coins or in bars. Bullion is gold that is valued purely by its weight and gold content, rather than by any physical or decorative value.
It has been claimed that the first gold bars were minted by the Egyptians around 4000 BC, but in slightly more modern times, the first 'official' gold bullion bars were commissioned by Henry VII in 1489. Today, the most common format is the 12.44kg 'London Good Delivery' bar held in store by most major banks.
What is a Gold Bullion Bar?
All forms of gold are weighed in troy ounces and have their purity measured in karats (sometimes spelt, carats). Bars come in many shapes, weights and sizes but the definition of a gold bullion bar is:
'A bar of gold made by a recognized bar manufacturer regardless of shape and size and upon which is reported the exact weight and purity of the gold as well as a registration number'.
Large gold bars are made by a casting process and are commonly known as ingots, whereas smaller bars are made in a similar way to coins, by pressing and stamping.
Common Bar Sizes
400 Ounce
The most common gold bullion bar of all is the London Good Delivery bar, weighing 12.44kg (400oz), with a minimum purity of 99.5%. Around 150,000 are minted each year by 55 registered manufacturers.
Kilogold
As the name suggests, this is a small bar weighing 1,000 grams. It is sometimes sold as a flat bar for ease of shipping but is also available in the more traditional 'brick' shape. It is usually traded at a low premium making it popular with fabricators as well as investors.
Some More Unusual Gold Bars
Gold Business Cards
Pioneered by Mitsubishi during the 1980s to impress important clients, these bars weigh just 1 gram. They have become collectors' items in Japan, retailing at prices well over their 'weight in gold' value.
Rainbow Gold Bars
Another product manufactured by Mitsubishi is 'rainbow' bars. They are produced by combining various colours of pure gold to give each bar a unique patterned appearance. Small weight rainbow bars are sought to wear as pendants.
Hologram Bars
First seen in the 1990s and dominated by Swiss and German manufacturers, these gold bars are decorated with holograms. They are extremely popular in the Middle East but enjoy a worldwide export market.
Investment - Large or Small Bars?
On the plus side, small gold bars are easier to transport and store, which also makes them easier to buy and sell. The negative is that the costs of manufacturing them are higher and these costs are passed on to the buyer as a premium over and above the value of the gold itself.
The advantage of trading in larger size bars, or even ingots, is that the premium charged is only a small amount over the 'weight in gold' price. However, disadvantages come in the form of difficulties with security during shipping and storage. More often than not, large bars are only traded 'on paper' and are rarely physically moved.
The security measures for the storage of substantial collections of gold are incredible and most are 'hidden' locations, to maximize security. Technologies as well as physical methods are combined to keep the gold as safe as possible. Most of the main vaults have walls that are bomb proofed with several alarms. In addition, anyone working in the vicinity of the gold is subject to an exhaustive vetting procedure to ensure that they are trustworthy.
Investment - Choice of Brokerage
An essential first step before even thinking about investing in gold bullion is to do plenty of research into current market trends and prices, as well as compiling a short list of well-known and recommended dealers. If you are seeking physical gold, bear in mind that 'future' brokers do not deal in anything but high-risk investment into commodities.
The type of dealer to look for is one who solely trades in gold, rather than in general commodities. Commodity dealers do not hold stocks of 'physical' gold of any type. The dealer chosen should deal specifically in bullion. Avoid those who deal in antiques or numismatics, as they will have much higher mark-ups.
Conclusion
Gold bullion bars, both historically and currently, represent a sound commodity investment. Provided that sufficient research is undertaken to understand the market, price trends and the variety of products available, gold is an excellent investment opportunity, which is highly unlikely to suffer from a loss in value any time soon. Unless you are an expert, the most important thing is to assign a reputable dealer to oversee the investment process on your behalf.