Coins versus Rounds versus Bars
One has many different choices to make when buying precious metals. There are thousands of coin and bullion products to choose from, and these different products come in various forms such as coins, bullion bars and rounds. Here we will discuss each type, and discuss any pros or cons of each.
Bullion coins are an extremely popular way to acquire precious metals. Bullion coins are made of several different precious metals including gold, silver, platinum and palladium. Bullion coins are often the first type of precious metals products purchased, and they have some advantages. Some of the advantages of bullion coins include:
- Product selection
- Different sizes available i.e. 1/10 oz, ¼ oz, ½ oz and one ounce
- Bullion coins are generally very liquid
- Bullion coins are considered good, legal tender
- Coins are easy to store at home or in safe deposit boxes
- Bullion coins have reasonable premiums
Bullion coins can be easily compared among online precious metals dealers. For example, a one ounce Canadian gold maple leaf coin year 2014 is the exact same coin whether you buy from dealer A or dealer B. This allows the coin to be easily compared from the standpoint of price, shipping and insurance, bulk discounts and more.
Some of the most liquid and popular bullion coins include:
- Canadian gold maple leafs
- Canadian silver maple leafs
- American gold eagles
- American silver eagles
- Chinese gold pandas
- Chinese silver pandas
- South African gold krugerrands
- Austrian gold Philharmonics
Many bullion coins may be purchased in weights smaller than one ounce, otherwise known as fractional. This makes it easy for those on a limited budget to begin acquiring precious metals. These bullion coins are produced by sovereign mints, and are known for their quality and backing.
Rounds are also a great choice for those simply looking to build their precious metals holdings. Rounds are available in gold, silver, platinum and palladium with silver rounds being the most popular. Rounds are typically produced by private mints, and are known for low premiums and unique designs. Their advantages include:
- Some of the lowest premiums among bullion products
- Huge selection
- Various sizes such as one ounce, five ounce and fractional
- Unique designs and features
- Great liquidity
With their low premiums, rounds may allow one to buy more gold, silver or other metal for their dollar. Premiums on silver rounds, for example, may be anywhere from under a dollar to $2.00 over the spot silver price. Rounds carry no face value, and therefore their value lies solely in their precious metal content.
Precious metal rounds, like coins, are easy to store at home, in a safe deposit box, or a depository.
Bullion bars are available made from gold, silver, platinum or palladium. Bars are produced by both government mints as well as private mints. Bullion bar designs can be plain and simple or detailed and elegant. Perhaps the biggest advantage of bullion bars is that one may acquire much larger amounts of precious metals. Bullion bars may be seen in many sizes such as:
- One gram
- Two gram
- Five gram
- 10 gram
- 20 gram
- 25 gram
- 50 gram
- 100 gram
- One ounce
- 10 ounce
- 100 ounce
- 400 ounce
- One kilo
Certain gold and silver bullion bars are considered “Good delivery” by various metals exchanges, and are used for larger transactions of gold and silver. Governments and central banks are the biggest buyers and holders of bullion bars, and deal in the larger size 400 ounce bars of gold and 1000 ounce silver bars.
As far as premiums go, bars may be lower than coins, and generally speaking, the bigger the bar the lower the premium. This is why larger investors may choose to buy bigger bars, since they are getting more actual metal bullion for the dollar.
Bullion bars may also be produced by different methods. These may include cast as well as poured bars. The different production methods will give the bullion bar a different look and finish.
The biggest advantages to bullion bars are:
- Ability to buy in bulk with higher weight sizes
- Lower premiums for larger bars
- Various sizes available for all types of buyers
- Smaller bars may be stored at home, while larger bars may be stored in safe deposit boxes or in a depository
Many buyers of precious metals will diversify their holdings with various metals in various forms including coin, bar and round. Each has its own advantages, and only you can decide what product will best fit your needs.