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Why buy gold bars?
Buying gold bars is almost always cheaper than buying the same weight in gold coins – and the bigger each bar, the lower the cost by weight.
Depending on your local tax regime, you can reduce or completely avoid paying sales tax (VAT) by buying gold bars instead of coins, too. Your savings will also depend on the quality (or “fineness”) of the gold bars you buy.
Trading Good Delivery gold bars – guaranteed to be of 99.5% fine or above – can then cut your tax bill again in many countries, because these 100- and 400-ounce gold bars are defined as investment gold and eligible for personal retirement plans. Good Delivery gold bars reduce your costs further still by retaining main market deliverable status. Depending on your point of view the elimination of private possession and insurance arrangements is also a plus.
Smaller gold bars such as 100g of gold bars bought and stored at home, on the other hand – or even kept in a bank safety deposit box – present three big drawbacks.
- Price: If you’re buying small gold bars, your purchase price will be 2% or even 4% above the value of the gold content you get. Expect to lose nearly as much again when you sell small gold bars back to your dealer, too.
- Delivery: Most gold bar retailers will cover the cost of insurance when sending gold out to new buyers, but they’ll expect you to cover this cost when you send back your gold bars to sell them.
- Security: Insuring gold bars kept at your home will push your premiums sharply higher, even if you invest in a good safe. Using your bank’s vault won’t be cheap, either – and keeping gold in your possession without insurance is not a serious option.
Melt Grade Gold Nuggets:
The lowest grade. So ugly and filled with host rock and mineralization that you just have to say “Off to the smelter for you!” Typically priced at some percentage below spot gold price. Prices are closely tied to current spot gold prices. We do not sell this low grade of gold nugget.
Common Grade Gold Nuggets:
Has some easily noticable host rock and/or mineralization. Generally not real ugly, , maybe only a little ugly, but also nothing special. Usually priced close to spot gold price, up to 10% above spot gold price. Prices are closely tied to current spot gold prices. We do not sell this low grade of gold nugget. If it has considerable attractive white or rose colored quartz then it could be classed as a “Gold in Quartz Specimen”, which is a category of it’s own.
Collectible Grade Gold Nuggets:
Has a little bit of attractive host rock or mineralization, but looks real nice, and has mostly nice clean gold showing. An overall pretty nice looking gold nugget. Typically priced at about 50 % to 80% over spot gold price, the variation affected by how beautiful, or how rare, or how large, or how unique the nugget is. Prices are loosely tied to spot gold prices and collectible grade nuggets hold their value much better than common grade nuggets in periods of declining gold prices, while still participating in rising gold prices.
Jewelry/Investment Grade Gold Nuggets:
The highest grade of natural gold nugget. No significant host rock or mineralization. Very high purity, clean and shiny gold nuggets with a consistent gorgeous overall appearance, and with a super nice surface texture and color. For true jewelry/investment grade natural gold nuggets, prices will usually start at 100% over spot gold price, and they can go significantly higher than that, based on the beauty, rarity, and size of the nugget.
Since hand selected jewelry/investment grade gold nuggets are the rarest and the hardest to find for sale, prices are very loosely tied to current spot gold prices, and this highest quality of natural gold nugget can be expected to be the best way for gold investors to be protected against periods of falling gold prices, while participating in rising gold prices, and experiencing dramatic price rises when there is strong public demand in the gold market.
Historically, prices for jewelry/investment grade nuggets have gone as high as 300% to 400% over spot gold prices during periods of very strong public demand. The last period of very strong public demand for gold was in 1979/1980. It almost repeated in 2011, but was cut off by the market manipulators before the gold price could rally over $2000 per oz. Many people are expecting the public to enter the gold market in a big way before this current bull market (2016) in gold is over. Should that happen, with the current low availability of jewelry/investment grade gold nuggets, and less of these highest grade nuggets coming on the market for various reasons, (one reason being that most of the easier accessed nuggets have already been found by gold prospectors), premiums should skyrocket as they did in the 1979/1980 gold bull market.