Gold bars – the traditional currency for hostage exchanges, pirate treasure and endless plotlines that revolve around breaking into Fort Knox.
The Home Of Gold
Calling it the home of gold might be stretching things a bit, but Fort Knox is reported to hold almost 9,000 metric tons of gold bullion locked up securely in in the vaulted and heavily fortified building in Kentucky. The estimated market value of this amount of gold is over $300 billion. Although there are still rumors and conspiracy theories that suggest the gold is no longer held in Fort Knox but at another secret location. The last time this idea was refuted was in 1974 when journalists were invited in to confirm the golds’ existence. No member of the public has entered the vault since (you can learn more about Fort Knox and its conspiracy here).
The Market for Gold Bars
Although much trading around the world is buying and selling theoretical objects (shares, bonds, currency etc.) rather than tangible objects that sit in an investors home, gold bars are one of the exceptions. This of course is the appeal – the security provided by knowing that if for whatever reason your currency is suddenly devalued overnight you still have a globally recognized currency hidden in a (hopefully very secure) vault.
Gold is a very old form of currency. Vikings used to wear gold jewelry (men as well as women) as a transportable form of currency they could use to buy, sell and trade with on their travels. In the early wild west days of gold mining America gold dust could buy you a meal, a gold nugget could buy you a stable of horses. It works well as a form of currency because it can be standardized and valued. Although how much you can buy gold in modern times will depend on the gold market, when you are trading in physical gold, either in coins, bars, or even jewelry, you are trading in a set value per weight.
Coins, Bars, Jewelry or Stock?
Whether you look to invest in gold coins, bars, jewelry or stock depends largely on your personal preference. However, if you are looking for gold bars for sale you are generally paying only for the current value of the gold per weight of the bar. Whereas with gold jewelry you are paying for the weight of gold at the time the item was made, plus the skill and time of the jeweler, plus the cost of any stones or enamel, plus any markup, brand name pricing, and general additional retail costs. With stock you might take a risk on investing in actual gold exploration companies, which can net you a bargain if you get in early enough – but might also be a complete loss if the company doesn’t actually find any gold. Or you could pay more and invest in a company that has discovered gold and is currently extracting and refining. Generally, you will be looking for a company that pays a dividend but bear in mind that the share price will also be influenced by the market price of gold as well as the expansion, and workings of the company itself.
What about coins? This will largely depend on if you are buying for their weight in gold, and that’s all you are paying for, or if you are buying as a collector’s item in the hope that they will increase in value due to rarity. One thing to be aware of with any item that you collect, no matter how rare or what you perceive the value to be, ultimately it is only worth what someone else is willing to pay.
There is some confusion about whether it is legal to own gold bullion in the US of A – in short, yes, it is, and it has been since 1975.
How Do I Buy Gold Bars?
As with all things, if it seems too good to be true, it probably is. For example, it is highly unlikely that you would get a genuine 1 oz Gold Bullion 999.9 Fine Credit Suisse bar for the $1.75 on certain discount trading sites. These might make a cute keyring or fridge magnet, but for the genuine article you are looking over $1,000 (and the very least). Do you homework and buy from a reputable seller.