Should I Buy Gold and Silver Coins or Bars in 2023?

Here’s all you need to know about choosing between gold and silver coins or bars…

Following the huge demand for gold and silver in March 2020 when COVID-19 first appeared, the supply of gold and silver coins was virtually completely exhausted worldwide. In 2021 and 2022 the demand remained high, particularly for silver coins. So there were very limited options and/or long wait times, especially for well known coins.

However in recent months we have seen the supply of silver coins and bars return to normal levels. In fact the premium above spot price on many silver coins is now the lowest they have been for some years. We are now starting to see some silver coins become available again, albeit there are still wait times for delivery. So it’s worth now looking at the question…

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 buying silver coins versus buying silver bars.  Confusion often reigns for the novice gold and silver investor.

Should I Buy Locally Produced NZ Gold and Silver Or Overseas Manufactured Coins or Bars?

Just to complicate things even further there’s the question of buying locally New Zealand produced gold and silver coins and bars versus those from overseas.

Some common overseas coins include South African Krugerrands, American Silver Eagles, Canadian Silver Maples, Canadian Gold Maples and Austrian Philharmonics.  Closer to home we have the Perth Mint Silver Kangaroo, Gold Kangaroo, Perth Mint Silver Koala and Silver Kookaburra coins.  

A Large Choice in Gold Bullion Options Can Make for a Large Headache!

Coin Purity

There is also the consideration that gold coins that are not 99.5% pure will not be GST exempt in New Zealand.  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. So generally it’s safer to avoid these less than 99.5% pure gold coins.

Local NZ gold bars (or sometimes referred to as gold ingots) are usually 99.99% pure so GST is not an issue with these.

Read more: GST on Gold and Silver in New Zealand >>

Bullion Coins vs Collectible Coins

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. Go here for more on collectible or numismatic coins vs bullion coins >>.

But 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 to Sell, Where Are You Likely to Be?

Locally produced NZ gold bars and NZ gold coins may not be nearly as well recognised as a Krugerrand, American Eagle or a Canadian Gold Maple.  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. Also because the overseas mints may sell them for a higher price at the wholesale level.

Read more: PAMP Suisse Gold / Silver vs Local NZ Gold / Silver: Which should I buy?

or

Read more: Why is a 1oz PAMP Gold Lady Fortuna Minted Bar Worth Less Than a Canadian Gold Maple Coin?

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 no more than they would for their own products.

If you’re not likely to sell your precious metals offshore then NZ gold bars, and NZ silver bars may be just as good a bet. You’ll likely pay a bit less for them, plus still have a large pool of ready buyers for them when you want to sell.

But You Also Need to Decide Between NZ Gold and Silver Coins or NZ Gold and Silver Bars!

Sheesh – no wonder you’ve put off buying gold for so long – it can seem complicated!

But in reality it’s not. You just need to consider the 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 coins and bars which also comes down to the production cost for each. So 1 kilogram’s worth 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?

Given that coins usually have a higher premium over the spot price, if you choose these you may be better off getting an overseas brand coin. Because as stated above they will be more widely accepted worldwide. You may want to look at Canadian gold maples or Canadian silver maples.

Why Has Demand For Lower Denomination Silver Increased in Recent Years?

Interestingly during 2021 we saw a definite increase in demand for silver coins. There have been many more people choosing to buy some coins along with bars. We also saw more people buying smaller denomination silver bars such as 5 oz silver bars and 10 oz silver bars. Particularly when silver coins became harder to come by. During these higher demand periods there were also longer wait times for smaller silver bars to be refined. But these have now returned to normal.

We don’t ask why, but some people have told us they are buying lower denomination silver to have on hand as an alternative currency. Covid and the measures put in place have shown people the current system is very fragile. People also have concerns about the end of cash. So many are preparing for these “just in case” scenarios. A 1 oz silver coin is worth around $50. A 5 oz silver bar is around $230 and a 10 oz silver bar is about $450. Therefore these are potentially more useful in a trading situation compared to an ounce of gold that is worth around $3550.

For more thoughts on this see: COVID-19 Makes Us Wonder: What Use Will Silver Coins be in New Zealand in a Currency Collapse?

In Summary

The above potential worst case scenarios might also affect whether you decide to buy at least some coins over bars. Or maybe some smaller bars as well as larger better value bars. If you go for nothing but coins you are paying higher premiums. Or put another way you are getting less silver for you money. Whereas if you only buy large denomination bars, you likely don’t have so much trade-ability. To us it makes sense to have a bit of a mixture. But at the end of the day it comes down to personal preference and only you can decide what best suits you.

Another option is to just advise us how much you want to spend on gold and/or silver and we can put a demo quote together for you to show you a potential range of products. 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: Buy gold or silver.

What other question on coins vs bars do you have?  Leave a comment below and we’ll do our best to answer them…

Read more: What Type of Silver Bar Should I Buy? – The Ultimate Guide to Silver Bars >>

and What Type of Gold Bar Should I Buy? >>

Editors Note: This article was originally written 26 January 2011. Last Updated 31 October 2023 to include latest silver demand information.

FAQs on Buying Gold and Silver Coins vs Bars