Gold coins or bars? Which form of gold should you choose and why?

For centuries, investing in gold has been a safe haven for savings and a way to diversify your investment portfolio. However, this does not mean that you should not consider several factors before deciding to buy gold! First of all, it is worth considering the choice of the right form of gold. The two most popular options are gold bullion coins and investment bars. What are their characteristics and who are they recommended for?

What are gold bullion coins?

Gold bullion coins are coins minted by reputable mints, mainly for investors and, to a lesser extent, collectors. They are therefore a popular investment product, regardless of the country of distribution! It is worth knowing that bullion coins are characterized by a high content of pure precious metal (usually from 90% to 99.99%, i.e., 999.9 fineness) and, interestingly, usually have a relatively low numismatic value.

The most famous gold bullion coins are the Krugerrand, the American Eagle, the Canadian Maple Leaf, and the Vienna Philharmonic. These coins often have legal tender status in the country of issue, although their actual value far exceeds their face value.

What are gold investment bars?

Gold investment bars are a form of physical gold intended for individual investors and companies, which can purchase them through retail sales, including online stores! These bars are cast by certified refineries and are produced in various weights, from 1 gram to even several kilograms (heavier bars are intended for banks and state financial reserves). However, the most popular bars weigh 1 troy ounce (approx. 31.1 grams). Weight is not the only determinant of the value of such investment products made of the royal metal.

The purity of gold bars is of enormous importance to their value. It is usually 99.99% (so-called 9999 or 24K gold). Each bar also has a unique serial number, indicated weight, and manufacturer's mark, i.e., identification elements confirming its authenticity.

Who should buy gold bullion coins, and who should buy gold investment bars?

The choice between coins and bars depends on individual preferences and investment goals. Gold bullion coins – especially those with lower purity and weight – are recommended primarily for people who are just starting their adventure with investing in precious metals. Thanks to their diversity, bullion coins allow you to gradually build your investment portfolio. In addition, coins are often perceived as more visually appealing and easier to store. Collectors and investors who want to surround themselves with "prestigious" items of considerable value are also keen to purchase more expensive coins.

Investment bars, on the other hand , are a good choice for more experienced investors planning to purchase larger quantities of gold in a short period of time. Bars usually offer a slightly better price-to-weight ratio, which can be significant for larger investments. This is due, among other things, to the easier production process compared to bullion coins.

What are the differences between bullion coins and gold bars?

Gold bullion coins and gold bars are two popular forms of physical investment in precious metals. Although both products have much in common, there are also some differences between them that are worth considering before making a purchase decision. The main differences between gold bullion coins and investment bars are:

1. Producers. Coins are minted by mints managed by governments and other state institutions, while bars can also be cast by private refineries. Of course, they are subject to restrictive regulations, and the best of them are members of the prestigious LBMA organization. It oversees the quality of production processes and the method of confirming the authenticity of gold coins and bars.
2. Collectible value. Coins may have a small collectible value, while bars are purely investment products. It is also worth mentioning aesthetics – coins have an interesting design, which is lacking in plain bars.
3. Purity of the metal. Bars usually have a higher gold purity (99.99%) than coins (90-99.99%). It is also worth noting the tax exemptions that apply when purchasing gold.
4. Production costs. Due to the complex minting process, coins can be more expensive per gram of gold than bars.
5. Liquidity. Both coins and bars enjoy high liquidity on the market, although recognizable coins may be slightly easier to sell (they are difficult to counterfeit).

Invest in gold, regardless of its form!

Regardless of the form of gold you choose, investing in the royal metal is an effective way toprotect your capital against inflation and uncertainty in the financial markets. The key is to choose products from reputable manufacturers (members of the prestigious LBMA organization) and to diversify your investment portfolio wisely. It is also worth remembering to store physical gold safely, preferably in a bank safe or deposit box. In addition, before making an investment decision, always seek the advice of an independent financial advisor who will help you tailor your strategy to your individual needs and short- or long-term goals.