Buying a Gold Bullion Bar

A bullion bar is a solid investment vehicle for those who want to diversify their portfolio beyond coins or rounds minted by the Royal Canadian Mint. 1-ounce gold bars are a popular choice for both new and experienced precious metal investors because of their divisibility and liquidity. However, they are only one part of a sound investment strategy and it is essential to complete your due diligence and consider how this asset will fit into your overall financial picture before making any purchase.

While a bullion bar may have advantages, it is important to understand that it will not offer the same level of security or privacy as a coin or round. For example, a bullion bar is often marked with its weight and purity and may be scratched or stamped to indicate the manufacturer. These markings are visible to the naked eye and may be used to trace a product's history if it is stolen or lost. This is why it is imperative to store your bullion bars in a secure location.

The Royal Canadian Mint is the leading producer of Gold bullion in Canada and its bullion bars are highly coveted by both investors and collectors for their quality and purity. The RCM produces the classic 1 kilogram Gold bullion bar and also offers a number of smaller sizes, ranging from 10 grams to 1 ounce. Each bullion bar is sealed in a protective assay package, which includes certification of its weight and purity from John Forrest, Chief Assayer at the Royal Canadian Mint.

Whether you invest in a Good Delivery bar or a smaller kilobar, each is bound by the strict rules of the London Bullion Market Association (LBMA). These rules ensure that the bar has a high percentage of Precious Metal content and is of a sufficient size to trade. The bar is also stamped with its fineness and a serial number, which can be useful when trading the bar or identifying it in the future.

When it comes to purchasing a bullion bar, the premium over the melt value of the precious metal will be the primary factor in determining its price. The premium is the markup over the raw price that a dealer pays to purchase the metal from a producer and then sells it on to the consumer. Privately minted bullion bars typically offer the lowest premium per troy ounce over the gold spot price, while government-minted bullion bars carry a higher markup for their branding and perceived reliability.

The premium for investing in a bullion bar can be reduced if you buy a Good Delivery bar, which is guaranteed to be of 99.5% pure or greater and is stored in a secure vault in the heart of the London bullion market. The bar will also benefit from lower or no sales tax in most countries, depending on your local laws.

Gold and silver bullion bars are a cost-effective alternative to buying the same amount of gold or silver in coins, as they are often cheaper by weight. Additionally, the lower production costs for gold and silver bars can save you money on shipping charges if you are selling the bullion abroad.