Physical gold bullion can come in a variety of forms including bars, coins and jewellery. Each of these have their respective advantages in terms of investment value, versatility and security.
Gold bars, occasionally referred to as ingots, are the most common way of investing in physical supplies of the precious metal (as opposed to investing in exchange-traded products) and is held in reserve by central banks across the globe. They come in several sizes ranging from a few grams to the word-record size of 250kg, however the accepted standard across investment markets is the ‘Good Delivery’ bar which weighs exactly 400 troy ounces which corresponds to around 12.4 kilograms. To be considered as a Good Delivery bar it must have a minimum purity of 99.5%, have to be held in a secure recognised vault and have a certificate of authenticity which traces it back to the original refiner. These measures are necessary as gold bars are relatively easy to be fraudulently forged, hence buying bars from a London bullion market (LBMA) affiliated dealer is recommended.
One thing to consider when purchasing gold coins is that they generally have a higher premium than other physical forms of gold such as bars, which means they often cost more than the value of their weight. For example if only 25 coins are minted to commemorate a specific event then each of these will cost more than a coin of equivalent weight in a set of 500. The type of coin, the cost of its production and its weight will also affect how much this premium will amount to.
Another form of gold which carries a high premium in comparison to its weight is jewellery which can include chains, rings, bracelets and pendants. As jewellery tends to be used for decorative displays rather than stored in a vault it is often alloyed with another metal to harden it, thus making it more durable. This alloy can affect the price of the jewellery piece, for instance “white gold” made with palladium is more expensive compared with nickel due to the fact that nickel can cause an allergic reaction.