InvestorQ : Since gold can be held in gold bars, can you throw some light on how gold bars can be invested and how it weights as a form of investing in gold?
Riya Dwivedi made post

Since gold can be held in gold bars, can you throw some light on how gold bars can be invested and how it weights as a form of investing in gold?

rhea Babu answered.
3 years ago

What exactly are gold bars? These Gold bars are rectangular pieces of gold, sometimes also referred to as gold biscuits, and are mainly purchased as a savings tool. Normally, gold bars are purchased for auspicious reasons; to celebrate festivals, for gifting purposes or on special occasions like anniversaries and for weddings. The demand varies with season, and auspicious days such as Dhanteras, Diwali and Akshaya Tritiya see a spike in the sale of gold bars. Here is what y you need to know about investing in gold bars as an investment avenue.

Gold bars entail lower making charges and premium involved in gold bar investments. It, therefore, makes sense to invest in a gold bar because bars come with a lower premium attached to them. The premium you pay usually includes making charges and sometimes also includes transportation and refining costs. Since gold bars are much larger in size, economies of scale come into play, ensuring that you get your money’s worth. Let us now look at the commonly available options for investing in gold bars.

They normally come in certain standard formats. For example, Gold bars come in weights starting from as little as 0.5g and go up to 1 kg, with 5g, 8g and 10g bars being popular choices with most people. It is essential to weigh factors such as your budget, investment and liquidity goals before you make your decision. Bars of a higher weight are cheaper to purchase, but lighter ones are easier to liquidate on short notice. The most important thing you need to know about gold bars is the concept of purity of gold bars. Let us look at that.

Purity is of key importance if you are purchasing gold bars for investment purposes. Make sure that you buy bars that are hallmarked or LBMA certified. This ensures that you are getting your money’s worth, and places you in a better position when you are looking to sell your gold bar. Also, you must insist on a purity certificate at the time of purchase. But, how do you store gold bars? Here is how.

Since gold bars have a higher worth as compared to coins, and aren’t possible to liquidate immediately, they are difficult to store at home, making alternatives such as lockers a safer option. However, if you wish to store them in a locker at home or the bank and don’t have one already, factor in an additional cost for the same and locker charges in a bank can range from Rs.7000 to Rs.15,000 per annum. Again, the bank does not guarantee the valuables that you keep in a bank locker and they are kept at your own risk. Let us now shift to how you should go about buying the gold bars in the market?

Just like with gold coins, it is worth your time and money to visit a few reliable retailers before you make your purchase to ensure that you’re paying the least amount of premium possible. This is all the more important with gold bars because the amount you invest is significantly higher and even a difference of 1–2% can translate into substantial savings for you. Do you know why gold bars are a popular and attractive investment? Gold bars are a lucrative idea for those who have money to invest and are looking to invest in a form that not only offers long term benefits but is also easy to liquidate. Gold bars bring some unique advantages to the fore and here are a few such key advantages.

Firstly, these gold bars entail very negligible making charges. You can invest in gold bars for your financial security, with the intention of eventually converting bars into jewellery or liquidating them when an emergency arises. If you are looking for a long term investment and want to put it in physical gold then gold bars are a suitable tool. Secondly, these bars are easy to liquidate and straightforward to sell which makes gold bars very accessible to all kinds of investors. Normally, lower ticket sizes may be easier to sell while a larger ticket size assures minimum wastage – depending on your investment goal, you can make a decision. Thirdly, you can also redeem your avalled gold bars. How to go about redeeming it? Gold bars can be sold to any jewellery retailer, who will check the grading and accept it.