Gold has been woven into the tapestry of civilization since it began. The ancient Mesopotamians used gold as early as 5000 BC, though it wasn’t until 650 BC that gold started appearing in coins. By 550 BC, the first pure gold coins appeared, and they have been present in one form or another ever since.
This precious metal holds its value over time because it has a long list of useful properties. Gold conducts heat and electricity effectively, and it can be stretched or flattened into fine wires and sheets without breaking. It also reflects light and heat, which adds to its overall beauty.
Perhaps the biggest contributing factor to gold’s value is its scarcity. Estimates indicate that only about 200,000 tons of gold have been mined – ever. If all of the world’s mined gold was combined in a single cube, each side of that cube would measure just 21 meters. For perspective, an Olympic-sized swimming pool is 50 meters long.
Given its ability to hold value over time, regardless of economic ups and downs, gold has always been a popular investment. Some investors collect fine jewelry, while others prefer gold coins. However, in many cases, the most practical way to invest physical gold is through gold bars.
How Much Is A Gold Bar Worth?
The answer isn’t as straightforward as naming a price. The price of gold at the time of purchase influences the value of gold bars. This figure fluctuates based on several factors, including the balance between supply and demand, the current value of the US dollar, and the gold contained in central bank reserves.
In January 2000, gold was priced at just over $280 per ounce. By January 2010, it was above $1,120. In January 2020, gold exceeded $1,560 per ounce, and at the end of third quarter 2021, it was over $1,770.
Gold bars often sell for a bit more than the value of the underlying gold to cover the cost of production, storage, insurance, and retail markup.
How Much Is A Gram of 10k Gold Worth?
Pure gold – that is, gold that has not been mixed with other metals – is 24 karats. Investment quality bars of gold are nearly 24 karats. They might contain a small amount of silver or copper (less than 0.5 percent) for ease of smelting.
When gold is listed at 18 karat purity, it is 75 percent gold and 25 percent silver, copper, or other metal. The very lowest purity used in the manufacture of gold jewelry is 10 karat gold. At this level, the metal is 41.7 percent gold and 58.3 percent other metals.
For comparison purposes, when gold is valued at $1,785 per ounce, this is how much a gram of 10k gold is worth against other levels of purity:
- 24 karat – $57 per gram
- 18 karat – $43 per gram
- 14 karat – $33 per gram
- 10 karat – $24 per gram
In other words, 10 karat gold is valued at less than half the price of 24 karat gold.
How Much Does A Gold Bar Weigh?
Gold bars are available in a variety of sizes. The most popular include:
- 1 ounce (1 oz) gold bar
- 10 ounce (10 oz) gold bar
- 100 gram (100 g) gold bar
- 1,000 grams/1 kilogram (1,000 g/1 kg) gold bar
However, investors who want to start smaller when buying gold bars can find options that are less than a single gram.
Is Buying Gold Bars A Good Investment?
Gold bars are widely regarded as a good investment because they hold their value over time. Though gold prices fluctuate, just as any asset does, they tend to move in the opposite direction of the larger market. When the economy is booming, gold prices often come down, and they move back up during gloomier economic times.
Another important advantage of investing in gold bars is that they are perceived to act as a hedge against inflation. When the cost of living goes up, the value of gold typically increases as well. Some argue that gold spikes more when confidence in governments falls more so than when inflation rises.
Of course, no investment is perfect, and buying gold bars isn’t without challenges. The biggest downside to buying gold bars for investment purposes is storage. As your stockpile of gold bars grows, more space is required – and that storage space must be secure due to the value of gold bars.
It’s also necessary to consider your investment horizon before buying gold bars. If you plan to sell in the short or medium term, you may find that gold prices have come down. If your need to sell is urgent, you may not see any gains – and it is possible that you will lose some of your initial investment.
Where Can I Buy Gold Bars?
Any number of websites and dealers sell gold bars, but this isn’t the sort of transaction where you can enter your payment information and hope for the best. Buying from a reputable business is critical to ensure you get what you paid for. Examples of gold dealers with a strong reputation include APMEX (American Precious Metals Exchange), JM Bullion, Money Metals Exchange, and SD Bullion.
When choosing gold bars, ensure they are no less than 99.5 percent pure gold. Each bar must have the manufacturer’s name, the weight of the bar, and the level of purity stamped on its face.
For ease of selling in the future, you may wish to avoid larger bars, such as five-ounce bars. Instead, purchase five one-ounce bars so you can find a buyer more easily. This also gives you the option of selling gold assets in smaller quantities, if necessary.
Where Can I Sell My Gold Bars?
Once you have determined that it is the right time to sell your gold bars, the next step is to find a reputable buyer.
Coin shops and pawn shops might be the fastest option, but they are rarely the right choice if you want the best price. Their goal is to get your gold at the lowest price possible, so they can increase their own profits when they sell it.
If your primary objective is to get the best price for your gold, consider one of the established online companies that have a long history of buying and selling gold. The same companies that sell gold bars often buy them, including APMEX, JM Bullion, Money Metals Exchange, and SD Bullion.
Generally, the process for selling gold online works something like this:
- Create an account
- List the items you wish to sell
- Obtain price quote
- Accept the quote if satisfactory
- Print shipping labels
- Package and ship your gold bars
From there, the company will authenticate your gold bars, then pay the agreed-upon price.
Buying Gold Bars: The Bottom Line
The bottom line is that buying gold bars can be a smart choice, particularly in an otherwise diversified portfolio. Gold tends to increase in value when stocks are turbulent, thereby mitigating overall volatility risk.
More importantly, gold has a long history of holding its value over time. As long as you can store it, your gold bars offer a hedge against inflation, which is a critical component of your overall wealth-building strategy.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.