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Gold bars are a great way to participate in gold ownership but require more insight and due diligence than purchasing gold bullion coins. I am a huge proponent of gold bullion coins such as the gold American Eagle. The reason I like gold bullion coins so much is they are mass produced, highly liquid, and government backed. It's easy for me to go to any coin shop and sell my gold eagles for cash. The coin store is able to examine the coins to make sure they are in reasonable condition and knows that the gold purity and weight are backed by the US Government. Gold bars are exiting because you can often find them for a lower premium over the current spot price of gold but you need to be careful because it's more difficult to prove their weight and purity to a potential buyer.

Gold Bars Are Not Backed By The Government

Gold bars are different than popular bullion coins. Bars are not backed by the government for their weight and purity like gold American Eagles, South African Krugerrands, and Canadian Maple Leafs. Consequently, the gold bar investor needs to be seasoned and careful. For the new gold investor it's best to go with popular bullion coins or gold bars produced by Credit Suisse or another very well respected bank. Proving the gold content and purity of Credit Suisse bars is easy because they come with assay certificates and are from a respected institution.

Gold Bars To Avoid

I recommend avoiding gold bars like the ones in the picture on the left. These gold bars are not produced by a trustworthy bank. Moreover, they do not come with an assay certificate describing their weight and purity. When you sell these bars, the buyer has no way to build up confidence in their weight and purity and therefore will need to assay them. Assaying gold is the process of melting down bars to confirm their gold content. Assaying is not ideal for individual investors and is the main reason I recommend sticking with highly popular gold bullion coins which are accepted everywhere. If you do decide to purchase gold bars, make sure to stick with the big names and always get assay certificates. If you follow this simple rule, you may be able to pick up some great gold bargains for a lower premium over the current spot gold price.

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