How Much Is a Gold Bar Worth?

What is a gold bar?

A gold bar, sometimes called ‘gold bullion’, is a block of gold of 99.5% purity that comes in a variety of weights and sizes. Investors looking to own tangible, physical stores of wealth may buy gold metal instead of purchasing something less tangible like gold exchange-traded funds (ETFs). They’re also often invested in as wealth storage in preparation for the unlikely event of a total economic collapse, providing financial security. Gold bars and bullion are issued by sovereign mints and private refineries. Sovereign mints, sometimes referred to as government mints or national mints, often issue gold with official stamps and markings that ‘back’ its purity and value. Private mints on the other hand, are private companies that issue gold bullion and bars for a cheaper price than public entities, but without the safety they guarantee.

Gold bars are measured in ounces, though not the usual 28.35g ‘kitchen ounce’ that most are familiar with. When measuring precious metals like gold, the ‘troy ounce’ is used, which is equal to 31.1034768 grams. When looking at the price of gold, it will be displayed in ‘X’ currency per troy ounce, for example $1,813 USD for 31.103 grams of gold.

Gold bars can be bought in a range of different weights and sizes. Depending on the issuer, gold bars are typically offered in the following sizes or weights:

• 1 ounce (oz)

• 100g

• 250g

• 10 oz

• 500g

• 1 kilo

• 100 oz

• 400 oz (London Good Delivery Bars)

London Good Delivery Bars are the most common form of gold bullion bars and are stockpiled by or traded by banks, investors, and governments.

How much is a gold bar worth now?

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If you are looking to invest in gold bullion, you must first be aware of the price of gold on the gold exchange. When observing its price, it will be displayed as the price per troy ounce. For example, at the time of this article’s writing, the spot price of gold (represented by XAU/USD on most online brokerages) is $1,924.19 USD, or £1,578.97 GBP. You can see current prices here. Also find out how much gold will cost in 2024 in the TU article.

However, the price of gold is continuously fluctuating, as is the case with most assets. There are several factors that influence the price of gold:

• Supply and Demand: This basic economic principle will largely decide the current cost of gold. Changes in demand, particularly from industries, investors, and central banks, can impact its price. For example, in 2023, the Russian Central Bank is buying the largest volume of gold, according to the World Gold Council. In 2022 it bought ten times more than the previous year. This sudden increase in gold purchases led to higher demand in the global market and higher prices.

• Geopolitical Events: Political instability, conflicts, and geopolitical tensions can lead to increased demand for gold, as it’s a safe-haven asset. Investors often turn to gold in times of uncertainty.

• Interest Rates: The opportunity cost of holding gold is influenced by interest rates. When interest rates are low, the cost of holding gold, which doesn't generate interest or dividends, becomes relatively lower, making it more appealing for investment.

• Jewelry and Industrial Demand: Gold is commonly used in jewelry and various industries. Changes in consumer demand for gold jewelry and shifts in industrial demand can influence prices.

• Currency Movements: The value of gold often inversely correlates to the strength of major currencies, particularly the U.S. dollar. A weaker dollartends to make gold more attractive to investors, and vice versa.

When calculating the cost of an individual gold bar, several factors should be taken into consideration:

• 1

  Size of the Bar: The number of ounces in the gold bar will determine the overall price of the whole bar.

• 2

  The Premium Charged: When buying a bar smaller than 400 oz, expect to pay a premium. The smaller the bar, the more expensive it is relative to the actual value of the amount of gold being bought. Premiums may also reflect varying levels of supply and demand.

• 3

  Gold Spot Price: This is the wholesale price that 400 oz bars are traded at within international markets. In online markets, the price displayed will usually be for one troy ounce of gold. Buying smaller denominations than 400 oz bars from gold issuers increases the price per ounce, as premiums are charged.

How to buy a gold bar

There are numerous ways to buy gold. You can go to an online dealer, a local dealer or collector, or even a bank to buy bullions, coins, or jewelry. Be sure to check the spot price of gold to make sure that you’re getting a fair deal when using any gold dealer.

You can visit a private mint or sovereign mint (in person or online) and inquire about buying gold bars. If you’re in the UK, the Royal Mint is the most popular place to buy gold. In the U.S.A. it’s the United States Mint, in Canada, The Royal Canadian Mint, and so on. Do the research before choosing a place to buy physical gold, as premiums and cost per ounce will vary from place to place.

Be aware of laws and regulations surrounding the purchase and holding of gold in your country. Although the purchase of gold is legal in all countries, some have laws in place that dictate how much gold you may possess.

There are also alternative options for investing in cashless gold, or indirectly buying gold. For example:

• Gold Exchange-Traded Funds (ETFs): ETFs are funds made up of different assets. Gold ETFs provide exposure to gold prices without owning physical gold and are easily tradable on stock exchanges at a lower cost than buying and storing physical gold. However, they don’t provide ownership of physical gold and value may be affected by factors other than gold prices such as market sentiment.

• Contracts for Differences (CFDs): Buying CFDs allows trading on the price movements of gold without owning the underlying asset. Leverage can amplify returns, but also the risk. Due to the high risk, losses can exceed the invested amount. This option is also not suitable for long-term investors.

• Gold Backed Crypto: These cryptocurrencies have a certain amount of gold stored away to give the coin stability. This gives the coin stability and lowers volatility compared to other cryptocurrencies, leading to higher profit potential. However, the cryptocurrency market is quite unregulated and poses more security risks than investing in traditional gold.

• Gold Futures: Gold futures are financial contracts that obligate a buyer to buy or a seller to sell a specified amount of gold at a predetermined price and date. These contracts are traded on futures exchanges and allow you to speculate on future price movements and profit from them, without ever purchasing the actual gold. This is advantageous for those looking to make short-term trades involving gold, though the availability of leverage can make trading gold futures a more risky endeavor.

For more detailed expert information on the best way to invest in gold for beginners, check out Traders Union’s guide.

Top 3 Platforms To Invest In Gold

Admiral

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eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest.

Admiral Markets platform is designed especially for commodities trading and offers the most favorable conditions for trading precious metals, including gold. It provides a wide range of instruments and tools to meet the demands of traders from different areas of activity and expertise.

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eToro provides access to CFD (contracts for difference) instruments on shares and ETFs. It allows users to trade commodities and stocks across multiple markets. The site offers free social trading and allows people to copy other investors' portfolios and strategies.

Interactive Brokers

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Interactive Brokers is a great broker for investing in gold due to its low cost and high liquidity. Some popular gold ETFs include GLD, IAU, GLL, and UGL. Interactive Brokers is a great option for investors looking for an entry-level, low-cost way to trade precious metals.