Jan 26, 2011
Should I buy gold coins or should I buy gold bars?
It’s a very common question for new gold buyers. And one we hear a lot.
Same goes for silver coins versus silver bars. Confusion often reigns for the novice gold and silver investor.
Just to complicate things even further there’s the question of buying locally produced gold and silver coins and bars versus those from overseas. Some common overseas coins include South African Krugerrands, American Gold and Silver Eagles, Canadian Maples, Austrian Philharmonics. Closer to home we have the Australian Gold Nugget, Gold Kangaroo, and Silver Koala.
A large choice in gold bullion options can make for a large headache!
There is also the consideration that coins that are not 99.5% pure will not be GST exempt in NZ. This includes some common overseas coins such as the South African Krugerrand which is only 91.67% pure or 22 carat. And American Eagles are also only 22 carat so not 99.5% and not GST exempt.
Then as a newbie precious metals investor you hear about the plethora of collectible gold coins available. Personally we steer clear of these as it takes specialist knowledge and is not our area of expertise. They often sell for very large markups over the spot price of gold and silver and so unless you know what you are doing there can be great risk in buying collectible gold coins and silver coins.
Local NZ gold coins include the 1 ounce Gold Kiwi coin and silver coins like the one ounce Silver Fern. And there’s also locally produced gold bars (or sometimes referred to as gold ingots) to consider.
With all this choice and only so much money Mr or Mrs Prospective Gold Buyer faces a difficult task.
First consideration is when/if the time comes where are you likely to be when you want to sell them?
Locally produced NZ gold bars and NZ gold coins may not be nearly as well recognised as a Krugerrand or American Eagle. An overseas bullion dealer may wish to have them assayed to ensure their gold (or silver) content, or they may give you less for them in dollar terms than you’d receive at home. Whereas here in New Zealand if you buy from a reputable precious metals supplier you can pretty much guarantee they’ll buy their product back from you, as it gives them a ready supply. Because that’s how they make a profit – buy it back for less than what they sell it for.
Often you will pay a higher premium for overseas gold and silver coins due to the transport costs of getting them here.
If you do buy overseas coins and want to sell them back to a New Zealand supplier then you may also find they will give you less than they would for their own products.
If you’re not likely to sell your precious metals offshore then NZ gold coins and bars, and NZ silver coins and bars may be just as good a bet. You’ll likely pay a bit less for them and have a larger pool of ready buyers for them when you want to sell.
But you also need to decide between NZ gold coins or NZ gold bars!
Sheesh – no wonder you’ve put off buying gold for so long – it sure is complicated!
Again there are pros and cons. The lowest mark up over the gold spot price will likely be for gold bars/ingots. This is because bars are “poured” and so fabrication costs are less than “minted” gold coins which are pressed. Same goes for silver bars versus silver coins. You’ll also generally pay more for smaller denominations in both cons and bars which also comes down to the production cost for each. So 1 kilogram of one ounce silver coins will obviously cost significantly more than a 1 kilogram silver bar.
So there’s a number of factors to take into account. It might be that if you’re unsure you could consider a mixture of them?
What other question on gold coins do you have? Leave a comment below and we’ll do our best to answer them…
Note: We have access to large range of gold and silver products including gold bars and gold coins made in NZ as well as from offshore producers. We have access to 3 major NZ precious metals suppliers and often the prices we have negotiated for our readers are better than if you went directly to them as a new customer. So give us a call on 0800 888 GOLD (0800 888 465) if you’d like to get a quote or email orders@goldsurvivalguide.co.nz. Or for more information visit this page: Get a gold or silver quote
immigrating from the states to NZ. bringing my wealth converted to gold. should i buy it here first in the states and carry it with me or waite and but it from nz mint? if i buy here the american gold eagles can i sell them there later? thanks for your help.
Hi Curt, Sorry about the slow reply – seems we somehow missed your comment. Thats a tough one to answer as it could depend on how much you are trying to leave the states with as to how the US authorities might treat the coins. Could be safer to buy here unless you can get an answer from US immigration before leaving.