Gold bars are physical objects made of gold and are of high purity and value. Many people think of gold bars as a store of value and a hedge against inflation and financial crises. Is it reliable for ordinary people to buy some gold bars and save them as an investment? Would you choose to do so?
First, the advantages of gold bars
Gold is a scarce precious metal with monetary properties that can be used as an international means of payment. The price of gold is affected by factors such as global supply and demand, geopolitical situation, market sentiment, etc., and is usually inversely proportional to the volatility of the US dollar and stock markets. In situations of high inflation, recession, political turmoil, etc., gold can serve as a safe-haven asset to maintain or increase its value.
Gold bars are physical objects that can be seen and touched, and they can make investors feel more at ease and safe than virtual gold assets. Once a virtual asset encounters extreme market or policy changes, it may be at risk of being destroyed or expropriated. Physical gold, on the other hand, can be carried around or stored in a safe place to avoid these risks.
Second, the disadvantages of gold bars
Gold bars are more expensive to buy than a regular gold investment. The price of ordinary investment gold bars is usually 2%~4% higher than that of spot gold, and if it is a collectible commemorative gold bar, then the purchase cost is higher. In addition, there are relevant taxes, handling fees and other fees associated with the purchase of gold bars. The high cost has weakened the investment function of gold bars.
Compared with ordinary gold investments, gold bars are more difficult to recycle, and different brands or institutions may have different standards and requirements for recycling. Generally speaking, only the original seller will recycle the gold bars they have sold, and a percentage of the buyback fee will be charged. If you recycle across brands or establishments, you may encounter issues such as inspections, identifications, discounts, etc. Low liquidity has affected the liquidity of gold bars.
3. Risks of gold bars
The gold market is a complex and volatile market, and its price is affected by factors such as global supply and demand, geopolitical situation, market sentiment, etc. Gold prices can fluctuate significantly or reverse trends, resulting in losses for investors.
The cost of investing in gold bars is high, and you have to pay not only the price of the gold bar, but also the associated taxes, handling fees, and other fees. These fees reduce the investor's net income and increase the cost pressure on the investor. If the price of gold does not rise or fall, then investors may be at risk of losing money.
Gold bars are a tangible object that can be seen and touched, and it is easy to attract the attention and greed of others. If accidentally lost or stolen, then investors may lose all or part of their principal. To prevent this from happening, investors need to spend extra money on measures such as buying insurance or renting a safe.
epilogue
If you are a long-term, conservative investor, you can choose to buy some gold bars as a way to store your value. If you are a short-term, risk-taking investor, it is advisable to opt for other forms of investing. But no matter which way you choose, you need to have a clear investment goal and strategy.