Gold has long been seen as a worthwhile opportunity for diversifying your investment portfolio, especially if you’re worried about inflation. This is because gold’s value tends to stay relatively stable, even during periods of market volatility.
But how much is a gold bar worth, and should gold be part of your investment strategy? Here’s how to evaluate the risks and potential advantages of investing in gold.
Prepare for market volatility by diversifying with gold
Stock market volatility can be financially harmful, especially if you’re approaching retirement. You could park your investments in a savings account, but have you compared interest rates with inflation lately? Another option to consider — diversify with precious metals like gold and silver.
Precious metals values are inversely correlated with the stock market and the dollar. When one goes down, the other usually goes up. If you want to protect your retirement funds, having diversified investments may be able to help you weather market swings.
Lear Capital is a reputable precious metals dealer that has specialized in precious metals IRAs for 25 years with over $3 billion in precious metals transactions since 1997. They have a AAA rating with the Business Consumer Alliance, and they make it simple to transfer funds from your current retirement account (like a 401(k) or IRA) into a precious metal IRA.
Lear Capital offers a free precious metals investor kit to help you learn more about why physical gold and silver could be a smart choice for diversifying your portfolio, and how the process works.
What is a gold bar?
A gold bar is gold that’s been formed into the shape of a bar. When speaking of gold bars, it’s commonly assumed that the bar in reference is associated with the international gold market.
This market tracks live gold prices for use by companies and individuals investing in gold and silver. The live gold price is typically shown as the price of 1 ounce of gold, which could be in the form of bars or coins.
These live prices are known as “spot prices,” or what you might pay for gold on the spot. These prices are often updated by the minute. Prices of 1-ounce gold bars climbed to just over $2,000 in 2020 and 2022.
There are varying sizes of gold bars, but commonly traded bars tend to have very similar makeups. This means that each investor-quality gold bar often contains a high percentage of gold content with few impurities. It’s nearly impossible to achieve 100% gold purity, but many gold bars are considered fine gold, or gold that’s almost pure.
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Why are gold bars made?
Gold bars are made because there’s demand for them. Gold has been used as money for thousands of years, and its value continues to the present day. It’s expected that gold will continue to be valuable well into the future.
As for why gold bars in particular are made, there are varying opinions. It might be because they’re easier to stack than gold coins or because their larger size holds potentially more value.
Who makes gold bars?
Gold bars are made by bar producers. These are typically private or government institutions that are able to make minted and/or cast bars.
Popular gold bar producers include:
- Johnson Matthey
- PAMP Suisse
- Perth Mint
- Royal Canadian Mint
- Valcambi (Credit Suisse)
What’s the difference between gold bars and other forms of gold?
Gold can come in different shapes and sizes, but the actual composition of the metal is typically similar between high-quality pieces of gold. Whether you have nearly pure gold in the shape of a bar or coin, the cost is likely to be similar unless there are other factors at play. This could include coins having different degrees of rareness if only a certain number were made.
At first glance, it might be confusing to differentiate between different forms of gold. Here are a few terms to consider when discussing this precious metal:
- Bullion: A catch-all term for gold in a bar, coin, or round form
- Bar: Gold that’s been cast or minted in the shape of a bar
- Ingot: A type of gold bar that’s been made by pouring molten gold into a mold
- Coin: Gold that’s been minted into coins and given value by an issuing authority such as a government. Can be used as legal tender
- Round: Gold in the shape of a coin that has no value from an issuing authority but has value in the metal used for its production. Cannot be used as legal tender
Common sizes of gold bars
Gold bars are typically separated into two weight classifications: grams and ounces. This is because different units of measurement are used worldwide. However, the 1-ounce gold bar is the most popular size and what’s used for calculating live gold prices.
Note that an ounce of gold doesn’t typically equal the same weight as an ounce of most other things. For example, an ounce of gold likely wouldn’t weigh the same as an ounce of meat at the grocery store.
This is because precious metals such as gold, silver, platinum, and palladium use a different type of ounce called the troy ounce (oz t or troy oz). One regular ounce is equal to about 0.91 oz t.
How much is a gold bar worth?
Gold bars are available in many different sizes, often ranging from a 1 gram gold bar (0.032 troy oz t) to 1 kilo gold bars (32.5 oz t). Here’s a breakdown of some of the common gold bar sizes and their prices as of June 9, 2022:
|Gold bar size||Price*|
|1-gram (0.032 oz t)||$59.41|
|5-gram (0.161 oz t)||$297.05|
|10-gram (0.322 oz t)||$594.10|
|1-ounce (0.91 oz t)||$1,847.87|
|100-gram (3.22 oz t)||$5,941|
|1-kilogram (32.15 oz t)||$59,410|
|* Prices as of June 9, 2022, as reported by GoldPrice.Org.|
The size of gold bars matters for storage purposes and how much money you have available to invest in gold. If you’re just starting out, it could make sense to invest in smaller gold bars. But with more money comes bigger (literally) investment opportunities.
Keep in mind that the spot price of gold is typically lower than the actual cost of a gold bar. Most companies that sell gold bullion bars often add a premium to the current price. For example, a 1-ounce gold bar might have a spot price of more than $1,800, whereas the actual cost is over $1,900. This is similar to the way brokers charge trading fees for managing your investments.
It could be worth comparing multiple dealers or exchanges to find lower premiums on the gold you’re interested in.
What affects the price of gold?
It’s generally difficult to know what factors affect any sort of investment, including a precious metal such as gold. But looking at historical trends, gold prices typically haven’t followed the same course as certain stocks.
This is because stocks are volatile, which means their price can fluctuate dramatically depending on different factors. A stock that’s worth a lot one day could be worth close to nothing the next.
Gold is thought to be different because it’s been around for thousands of years and has value because the world says it has value. Its worth is expected to be more stable.
Here are other factors that could affect gold prices:
- Supply and demand: As a physical asset, gold prices might fluctuate depending on its availability. If gold bars become more scarce, their prices could go up. Conversely, if there’s a lot of gold but not much demand, gold prices could fall.
- Economic events: Gold is often seen as a safe haven or an investment that isn’t expected to lose much of its value during periods of economic volatility. During global events, such as the 2008 financial crisis, investors might flock to buy gold bars, driving their value (and price) up.
Reasons to buy gold
If you want to learn how to invest money, it’s important to understand why you might want to invest in something. Here are a few reasons you might consider buying gold:
- Safe haven: Gold is often thought of as a safe investment if you’re worried about turbulent economic conditions.
- Track record: Gold’s price has risen dramatically in the past few decades. From an average price of less than $300 per ounce in 1999 to hitting over $2,000 per ounce in 2022.
- Physical asset: Worried that digital currencies might just disappear one day? This won’t be a concern if you invest in and own gold bars.
- Inflation: As inflation increases, your purchasing power typically goes down as the U.S. dollar’s (USD) value decreases. Gold isn’t necessarily tied to the value of the dollar and is often considered a hedge against inflation.
- Diversification: It’s often recommended to diversify your portfolio by spreading out your investments. This could help reduce the overall risk of your investments by distributing the risk across multiple types of investments.
How to buy gold
There’s no one right way to invest in anything, including gold. But knowing how to buy gold and the different options available could help you make an informed decision. Here are a few options for buying gold.
Gold is available in many forms, including bars, coins, rounds, jewelry, and more. Bars and coins are the most common ways to invest in physical gold. It’s relatively easy to check gold prices each day and use online gold dealers such as JM Bullion and APMEX to browse available stock.
Futures are contracts for buying and selling assets at a set price on a future date. Gold futures are contracts for buying and selling gold at predetermined prices by a specified date.
An exchange-traded fund (ETF) is typically a grouping of assets that contains multiple stocks or bonds in one fund. Gold ETFs allow you to invest in a bundle of gold-related stocks or bonds. You won’t actually own any physical gold assets, however.
Similar to investing in gold ETFs, you also have the option to skip the bundling and go straight to individual stocks. The thought is that the stocks of companies involved in gold mining or production could follow the same price trend as gold itself. Consider these gold stocks you can invest in.
A gold IRA is similar to a regular IRA except it’s specifically designed for holding physical assets such as precious metals. Gold IRAs typically have the same contribution and distribution limits as other IRAs.
How much is a gold bar worth today?
A 1-ounce gold bar is worth more than $1,800 as of June 9, 2022. Keep in mind that gold prices typically fluctuate on a daily basis, though the average price has been going up for decades. The price of 1-ounce gold bars surpassed $2,000 in both 2020 and 2022.
How much is a 24k gold bar?
A 1-ounce 24-karat gold bar is worth more than $1,800 as of June 9, 2022. Many gold bars that are close to 100% purity carry the 24-karat description. Most investor-quality gold bars are within the range of nearly pure gold levels, so pricing typically doesn’t vary much between bars from different brands or mints.
Investing is often thought of as putting money into stocks or real estate, but precious metals such as gold and silver could have their place as well. Understanding the different sizes of gold bars and knowing how gold prices work will help you learn how to invest in gold.
Gold bars offer a unique opportunity to invest in an alternative asset that’s not as common as stocks but could still provide valuable financial security.
More from FinanceBuzz:
Lear Capital Benefits
- Get your free precious metals investor kit
- Discover why gold could be a hedge against inflation
- See where experts think gold and silver could be heading
- Learn how to diversify your portfolio with precious metals