Welcome to the Deep Dive. Today we're tackling
a really common question if you're thinking about
gold, coins, or bars. Which way should you lean?
Yeah, it can seem a bit confusing at first. Exactly.
So we want to try and cut through that confusion
a bit, give you some clear pointers without getting
totally lost in the weeds. And we're drawing
from a great piece by Doug Young called Investing
in Gold, Should I Buy Coins or Bars? He's got,
what, 20 plus years in finance and precious metals?
That's right, a really solid source, someone
who... definitely knows his stuff. For sure.
So our mission today, really, is just to pull
out the key differences, the pros and cons, the
things you need to weigh up to figure out if
coins or bars make more sense for your own situation.
Sounds good. Where should we start? Maybe just
the physical basics. Yeah, good idea. What are
we actually looking at? What is a gold bar versus
a gold coin? OK, so gold bars, Doug points out,
they're usually the larger ones. often rectangular,
and the size can vary quite a bit. You know,
from maybe one ounce up to a kilogram, sometimes
even bigger. Whoa, a kilogram bar? That's substantial.
It is. And that size obviously impacts how you'd
store it and move it around. Think like handling
a brick versus something smaller. Yeah, good
visual. So coins then? Coins are generally smaller,
round, usually. often an ounce or even less,
like fractional ounces sometimes. So much more
portable, you'd imagine. Definitely more portable.
Storing a few coins is, well, a different challenge
than figuring out where to put a big bar. Right.
OK, so that physical difference must play into
things like value in selling them, right? Liquidity.
Absolutely. That's the next big point Doug makes.
Both are considered liquid. You can sell them
pretty easily. There are established markets.
OK. But the smaller size of coins gives them
an edge in flexibility. Big time. How so? What
does that mean, practically? Well, imagine you
need some cash, but you don't want to sell all
your gold. Okay. Doug uses this example. It's
much easier to sell, say, two or three one -ounce
coins than it is to, like, saw off a piece of
a kilogram bar. Uh -huh. Yeah, I can see that.
You can't really sell part of a bar easily. Exactly.
So coins let you liquidate just a portion of
your investment much more easily. That makes
a lot of sense. Okay, so flexibility is a big
plus for coins there. What about the price you
pay? The premiums. Ah, premiums. Good point.
So the premium is just that extra bit you pay
over the actual spot price of the gold itself.
Right, the manufacturing, distribution, dealer
costs, all that. Yeah. And generally speaking,
gold bars tend to have lower premiums. Oh, why
is that? It's kind of like buying in bulk. It's
often cheaper per unit. or per ounce, in this
case, to make and sell one large bar than lots
of small coins. OK, economy of scale. Exactly.
Yeah. Doug even says, and I'm quoting here, if
you prioritize gold purity in your investment,
then bars may be a better option. The lower premium
means more of your money goes directly into the
gold itself. Gotcha. So bars are more cost effective
if you're buying a decent amount and just want
the gold content. Pretty much, yeah. But coins
often have higher premiums, you said. They often
do, yes. And that's usually because there's more
to them than just the gold weight. Like what?
Well, think about famous coins like the American
Eagle or the Canadian Maple Leaf. They have designed
sometimes historical significance. Ah, the collectible
aspect. Exactly. There's often numismatic value,
value based on rarity, condition, design, history
layered on top of the gold value. So you're paying
not just for the gold but for the coin itself
as an object. Right. Which leads nicely into
the advantages of coins that Dud talks about.
That historical significance is a big one for
some people. Holding a piece of history almost.
Yeah. Some coins have been around for ages passed
down. It has a different kind of appeal beyond
just the investment side. And the collectible
value you mentioned. Can that actually be significant.
Oh definitely. Doug points out that rare or limited
edition coins can sell for way more than their
actual gold belt value. So it becomes like a
dual investment gold and a collectible. Precisely.
Yeah. And for some, it even turns into a hobby.
You know, go to coin shows, auctions. Interesting.
Oh, and we already touched on the flexibility
advantage for coins, too. Yeah, worth repeating,
though. Being able to buy or sell in smaller
amounts is a huge plus. If you need cash quickly
or want to invest gradually, coins make that
much easier. Makes sense. OK, let's flip it then.
What about the advantages of going for gold bars?
Well, we mentioned purity. Bars are typically
like 99 .99 % pure gold. Four nines, they call
it. That's incredibly pure. It is. And as we
said, they come in those larger weights, which
is just more practical if you're looking to put
a significant sum into gold. Buying 51 -ounce
coins versus one 50 -ounce bar, for instance.
Right. Simpler transaction, maybe? And crucially,
those lower premiums we talked about. If your
main goal is just maximizing the amount of pure
gold you get for your money, bars are generally
more cost effective, especially for larger purchases.
So less markup per ounce. Exactly. And what about
storing them? You said bars are bigger, which
sounds like a disadvantage for storage. Well,
yes and no. Doug actually points out their uniform
shape, usually rectangular, can make them easier
to store efficiently. Uh, like stacking bricks.
Kind of, yeah. You can stack them neatly, potentially
taking up less total space than the same value
in, say, tubes of coins, especially if you have
a lot. OK, I see. So for large quantities, bars
might actually be more space efficient. Could
be, yeah. So Doug gives this neat little summary.
Bars usually have lower premiums, higher purity,
larger sizes, but less collectible value. Generally
higher premiums, purity can vary, but many bling
coins are also very pure, smaller sizes, and
potentially high collectible value. Okay, that's
a clear breakdown. So how does someone listening
decide? What factors should they weigh up? Doug
Lee's had a few key things. First and foremost,
what are your investment goals? Okay. Like long
-term versus short -term. Yeah, exactly. Are
you buying gold as a long -term safety net, a
hedge against inflation, or are you maybe interested
in shorter -term trading or hoping for that collectible
value to grow? And how does that map onto bars
versus coins? Doug suggests bars often make more
sense for long -term holding. Buy it, store it.
benefit from the lower premium. Coins, with their
flexibility and potential collectible upside,
might appeal more to shorter -term thinkers or
collectors. Right. You've got to ask yourself
why you're buying the gold in the first place.
Absolutely. Then there are market trends. Always
tricky to predict, though. True. We're not giving
advice here, but Doug notes that gold often tends
to do well when the economy looks shaky or there's
geopolitical uncertainty. It's seen as a safe
haven. Something to be aware of in the background.
What else? Your budget, obviously. Bars, even
small ones, need a bigger upfront investment,
usually because of the size. Coins let you start
smaller, buy fractionals even. So accessibility
for smaller investors might favor coins. Generally,
yes. And then storage again. We mentioned bars
might be space efficient for large amounts, but
maybe you only have a small home safe. Right.
Storing a few coins might be easier in that case
than finding space for even a single large bar.
A safe deposit box might become necessary sooner
with bars. Could be. And finally, liquidity needs.
How quickly might you need to sell some of it?
And we covered that coins are easier to sell
off in smaller chunks if you hit an emergency
or just need partial funds. Exactly. That flexibility
can be really valuable. Okay. Before we summarize,
maybe just a quick step back. Why is gold so
popular anyway? People have valued it for millennia.
Doug touches on this too. It's been a symbol
of wealth. a reliable store of value forever,
basically. Because it's rare, durable. Yep. It
doesn't corrode. It has intrinsic value. And
in modern finance, it's often seen as that safe
haven. Right. Something to hold when other things,
like stocks or currencies, seem volatile. A hedge.
Exactly. A hedge against inflation, currency
losing value. And it's tangible. You can hold
it. That gives a lot of people a sense of security,
especially in uncertain times. Definitely a psychological
element there, too. OK, so let's try and tie
this all together based on Doug Young's insights.
Sounds good. It seems like both coins and bars
definitely have their place. It's not like one
is universally better. No, absolutely not. It
really boils down to your goals, your budget,
how much you're investing. So if someone's thinking,
I want to put a larger amount away, focus on
pure gold content, get the best price per ounce
and store it efficiently long term. Then gold
bars probably tick those boxes best, according
to Doug's analysis. OK. But if someone else is
thinking, I want flexibility to buy and sell
smaller amounts. I like the history or the look
of coins. Maybe hope for some collectible value
and need easier options for partial selling.
Then gold coins seem like the better fit for
that person. The key takeaway really seems to
be understand these differences before you buy.
Don't just jump in. Absolutely. Know what you're
prioritizing. Is it cost per ounce? Is it flexibility?
Is it collectability that helps guide the choice?
Right. So just to recap Doug Young's main points
one last time. Bars generally mean lower premiums,
higher purity, larger units, easier bulk storage,
but less flexibility and little collectible value
in coins. Generally higher premiums, potentially
collectible or historical value, smaller units
offering flexibility in buying and selling. but
maybe less cost -effective for pure bulk buying.
OK. And ultimately, the decision rests on your
personal investment plan, how much cash you have
available, and your storage situation. Couldn't
say better. And of course, Doug reminds us, and
it's always good advice, diversify your investments,
do your homework, and always, always buy from
reputable dealers. Don't get caught out. Crucial
advice. Absolutely crucial. So after exploring
all this with Doug Young's help, maybe a final
thought for everyone listening to Mullover. Yeah.
Considering gold's history as a stable asset,
but also its potential to appreciate, how might
putting even a small slice of your portfolio
into physical gold, whether it's coins or bars,
fit into your overall financial picture and maybe
add to your long -term security? That's a good
question to ponder. It really brings it back
to the individual strategy, doesn't it? Definitely
food for thought.