What Are The Different Types of Gold Bars?

Thinking of investing in gold bullion?

Most gold investments are not based on factors such as age or origin. You have three other factors that determine its price:

1. Purity
2. Weight
3. Current market value

Gold, as a metal, doesn’t age or lose value over time. If gold bullion isn’t tampered with and doesn’t magically shed its gold, all that remains is the market rate that people are willing to pay for it.

Investing in gold bars is actually among the simplest ways to get started in gold investments. But you should know a few things about this type of precious metal bullion.

Gold bar definition

Gold bars (or bullion, or ingots) are quantities of refined, metallic gold. They’re built according to specified weights and levels of gold purity by trained and certified manufacturers.

One gold bar normally contains an “investment-quality” purity of about 99.5% (or 995 pure). The remainder is an alloy of silver or copper, which is added to make smelting possible. One “London Good Delivery Bar” contains an “investment-quality” purity of at least 99.5% (or 995 pure). The remainder is an alloy of silver or copper, which is not removed during the smelting process.

One standard gold bar weighs 400 troy ounces, or 12.4 kilograms. There are plenty of standardised gold bar weights, but the “investment-quality” purity must remain the same. 

One standard gold bar is the 400 troy ounce bar, (or 12.4 kilograms) known as a London Good Delivery gold bar. London Good Delivery gold bars do not weigh exactly 400 troy ounces rather they range from 350 troy ounces to 430 troy ounces. But a buyer only pays for the exact amount of troy ounces in the bar they purchase. These are not commonly purchased by retail gold buyers.

There are plenty of standardised gold bar weights, but the “investment-quality” purity must remain the same. 

Different types of gold bars

The types of gold bars are broken down by manufacturing, weight, and refinery levels.

Categorised by manufacturing: cast and minted gold bars

Cast gold bars are the simplest to produce and the fastest. The bar just needs to be the proper size and weight. However, cast gold bars are the least repeatable and are thus more rugged. No two will be exactly the same, so minor blemishes are more common. However, they’re worth their weight in pure gold so they’re more than acceptable to most investors.

All cast gold bars are measured in troy ounces, but can also be sold in grams. While 1 ounce is the most common size, they’re also available in 1 gram, 5, 10, 20, 50, and 100 grams.

Minted gold bars go through a more rigorous manufacturing process. The result is a much better uniformity of size and shape. They’re still cast, but in a long, single strip, which is then cut down in a more advanced process that creates that uniformity.

Minted gold bars are manufactured in the same weights.

Categorised by weight: Traditional Gold Bars vs. CombiBars

The “traditional” gold bar is just the standard, cast or minted gold bar. But while gold is an old industry, it’s one that’s still being innovated upon.

CombiBars are the newest in gold bar manufacturing. Produced by Valcambi, the Swiss manufacturer, they’re meant to fill the need for smaller gold investments. A CombiBar is about the size of a credit card, contains an exact amount of gold (5, 20, 50, 100 grams, and 1 ounce), and can be broken into even smaller, but uniform, pieces.

CombiBar gold costs more per unit of weight than traditional gold bars. This increased value is derived from:

• Guarantees of purity
• The convenience of being able to break the bar down into many smaller certifiable weights of gold

Categorised by refinery levels

The way that a gold bar is refined can have a significant impact on its value.

Some gold investment types demand a certain standard of refinery. For example, for investments in a precious metals IRA in the US, the refinery itself must be approved and the gold will have a purity of .9999. This should come with a serial number or certification, as well.

If you want to invest in physical gold bars to be stored in your house, you have essentially complete freedom of choice. But it’s your responsibility to ensure the refinery meets the standards you’re looking for. To that end, some refineries offer certificates for each bar and serialise each for authenticity. But this is not a necessity to have by any means, as all refiners assay every batch of gold they refine. They also buy and sell from each other so that also ensures purity.

New and second-hand gold bars

Second-hand gold provides, for the most part, the same benefits as new gold bars. The main difference is they’re sold closer to the spot price, or the price at the exact time of purchase. Remember, as an investment, gold is priced on purity and weight; so pure investors may actually prefer second-hand gold bars.

Anything made from or containing gold is worth the current market value of its weight in pure gold. That’s why many small businesses specialise in buying used jewellery and other items containing gold. The jewellery itself may have depreciated in value from wear, but the gold has not.

The advantages of buying gold bars

You have several advantages for buying gold bars, including:

• Benefits of gold. The weight and purity of the gold itself make it worth the current market value. Gold prices move differently than the prices of other assets so you retain the same value that any gold investment provides.
• Less maintenance. Unlike gold in jewellery or industrial applications, gold bars don’t really require any maintenance. You just need to store it safely.
• Easy to sell. Liquidity is always worth considering with any investment. This is especially true of safe haven investments like gold. Gold bars are standardised, easily recognisable, and are thus highly liquid. Learn How to Sell Gold and Silver Bullion here.

Collateral. It can be easier to take out a loan secured by gold bullion. [not easily done in New Zealand, although it is possible via our storage partner in Singapore SGPMX. So could say: “It is possible to take out a loan secured by gold bullion via our storage partner Singapore Precious Metals Exchange (SGPMX).

Still not sure what to invest? Check out this ultimate guide: What Type of Gold Bars Should I Buy?