Posted 12th October 2023

An Investor’s Guide to Buying Gold Bars

gold bars a guide to buying gold

Gold, with its timeless appeal and intrinsic value, has always been a welcomed source of investment and currency.

The concept of owning a solid gold bar is undeniably attractive, but what needs to be considered when buying and owning gold bars? What are the intricacies of purchasing them, and how do you keep ahead in the evolving gold investment market?

How to Buy Gold Bars

When it comes to purchasing gold bars, the avenues are as diverse as the variety of bars themselves. It is essential to assess the landscape of the gold market. Investors should understand the options available and the additional costs that come with it. Before purchasing, buyers should:

  • Research the options in size, weight, form and purity of the gold
  • Make sure they find a licensed retailer, financial institution or reputable dealer
  • Consider any added costs like insurance, storage, shipping and sales markup fees
  • Be aware of market trends and the varying price of gold

Where to Buy Gold Bars

One method of purchasing gold bars is from a reputable bullion gold dealer or a financial institution. Investors will be responsible for organising storage, insurance and delivery and will often pay a premium, in addition to the spot gold price. Gold bars can vary from bullion bars containing 24-carat (or 9999) gold to investment cast bars, often available at a lower premium.

You can also purchase gold bullion from online platforms specialising in the trade of precious metals. Online sites will usually incur additional charges for delivery and insurance. Some online sites offer vault services at an added fee to help with storage solutions. Services like Kinesis Bullion offer premium physical coins and bars from their online store at some of the lowest prices in the precious metals industry.

The main consideration when purchasing gold is to verify the credibility of the seller and confirm the authenticity of the gold bars.

Pricing and Sizes

Gold bars are sold in 1, 10, 20, 50, 100 and 1,000 g weight denominations and 1, 10, 100, 400 troy ounces. The prices can vary significantly, with 1g costing around £50 to a 1kg bar at around £50,000.

Gold bars are stamped with their weight and purity level. You can view the live price of gold on Kinesis’ range of price chart pages.

Authenticity checks

In recent years, there has been a rise in counterfeit gold bars and an increasing challenge to identify them due to advanced counterfeiting techniques. Many counterfeiters present bars of inferior metal with an overlay of thin gold, making it hard to detect. However, there are some checks you can carry out:

  • Authentic stamp – Verify the marking of the producer or official mint
  • Measurements – check the dimensions match the specified production sizes
  • Check magnetic properties – gold should not be magnetic

What are your gold storage options?

Gold storage is a necessary consideration for investors who want to safeguard their wealth. The storage options can vary depending on the amount of gold you have, budget, accessibility and security concerns. It is also vital to ensure that gold is stored in a suitable environment away from corrosives. Here are some of the popular storage options:

  • Home safe 
  • Bank safe deposit box
  • Private vault or storage facility
  • Allocated storage 

You can secure gold at home in a secure vault or safe. It allows for easy access but risks theft or destruction from fire, flooding, etc., if not designed to withstand these. Most safes are given a ‘cash rating’ to decide the level of cover from the insurance, so ensure this is correctly set.

With third-party storage, you have several factors to consider.

  • Make sure security is high, and your gold has suitable protection.
  • Check accessibility: how easy will it be to access your gold?
  • Ensure your metal is protected from contamination.

To find out how you can access free storage on your gold and silver, click here.

Physical gold vs digital gold

With the rise of exchange-traded funds (ETFs) in the last decade, there is a lot for investors in gold to consider, like the benefits and disadvantages of physical gold vs. ETFs. Where many investors enjoy the feeling of being able to hold their investment physically, it does come with extra charges to store and insure the asset.

On the other hand, digital gold (backed by physical bullion) offers the ability to liquidate that gold instantly and cut out the selling process, physical gold bars provide a more tangible asset for those who like to keep their investments close to hand. With digital assets, like the Kinesis gold (KAU), investors don’t need to choose between the two; they can own the underlying physical gold and instantly trade or spend their physical holdings as money, with instant fiat conversion.

As gold is often viewed as an investment to protect against the collapse of the financial system, holding physical gold can additionally mitigate this long-term risk.

Gold as an investment strategy

Gold has long been revered as a haven asset to hedge against inflation. However, as with any investment, it comes with its own set of advantages and disadvantages. So, why invest in gold?

Investing in gold can offer diversity in an investment portfolio. It is seen to reduce overall portfolio risk when other assets are performing poorly. Gold bars are relatively easy to purchase and sell within a “solid market”, often making them attractive investments.

While gold does not typically pay dividends or a yield like stocks or bonds, investors often take advantage of the metal through its price appreciation. Unlike most other gold investment options, Kinesis offers a monthly yield on physical gold and silver holdings, which are safely stored in a global vaulting network.

It’s important to consider whether buying gold bars is right for you – whether it fits well into your investment portfolio, depends on many factors. That said, it is no surprise investors still see gold as an attractive investment option with its reputation as a commodity that’s endured over millennia.

To learn more about how Kinesis is changing gold investment, click here.

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.

Read our Editorial Guidelines here.