9 Things to Know Before You Buy Gold Bars
People from Uk have traditionally been huge investors in gold. The ways in which they own gold is variable and extends to include jewelry, gold coins, and gold bars. Sourcing gold is nowadays easier than it has ever been. Beyond the preferred jewelry vendor in the vicinity, gold can also be bought from e-commerce sites such as Amazon and Snapdeal.
As compared gold coins and jewelry, bars can be purchased at a lesser price. Let us take a look at the prime considerations one must keep in mind before buying gold bars:
1. Purity is an important metric associated with gold and it is measured in Karats. Higher karat value indicates a higher purity for gold and conventional values for karata are 24K, 22K and 18K. For investment purpose, 24K would be fine but for personal use, 22K may come across as a better choice.
2. It is then preferable to know the refinery from which the gold bar has been sourced, as popular refineries give assurance of the purity of gold. Bangalore refinery is among the best of refineries.
3. Tolerance levels refer to the variation in purity for a gold bar. A few bars have +/- tolerance levels, but the ones with NIL negative purity tolerance offer a higher value for money.
4. Finesse reflects the purity of gold in parts per thousand and not karats. It reflects the precious metal content in gold jewelry. Finesse levels of 999.99 parts per thousand are reflected as 999.99.
5. Lower denominations of gold bars, such as 5g keep the liquidity high when required. Contrary to that, higher denomination such as 100g or 1 kg calls for a smaller premium.
6. For gold purchased online, the certification is Hallmark. It assures a buyer that the jewelry item has been manufactured by a Hallmarked jeweler, as certified by London Bullion Market Approved (LMBA). LMBA website has a list of jewellers who sell BIS certified jewellery.
7. Packaging keeps the purity of a gold bar intact. Upon purchasing gold bars online, it is preferable to not open the packaging.
8. It is preferable to be aware of a gold items return policy before going ahead with a purchase. While the return policies exist in e-commerce and brick and mortar stores alike, they are likely to be stricter as compared to other items.
9. If purchased at times of economic uncertainty, gold renders higher security for buyers. Investors always try to find a safe refuge for their money. At times when investor confidence is low, gold prices rise. It can bring a positive turnaround to an investment.
A distinct advantage of going for gold in the form of bars, coins or jewellery is that a buyer can own the asset physically, unlike making an investment in stocks.
One of the key metrics to consider when investing in gold bars is whether it comes across as a top choice for bullion investments. Other options available a buyer’ disposals are gold coins and gold jewelry. Larger sized gold bars are the preferred choice for people who intend to spend a significant amount of money because the price per unit is reduced.
