Gold bars are purchased for auspicious reasons; to celebrate festivals, for gifting purposes or on special occasions like anniversaries and for weddings. The demand varies with season, and auspicious days such as Dhanteras, Diwali and Akshaya Tritiya see a spike in the sale of gold bars.
It makes sense to invest in a gold bar because bars come with a lower premium attached to them. The premium you pay usually includes making charges and sometimes also includes transportation and refining costs. Since gold bars are much larger in size, economies of scale come into play, ensuring that you get your money’s worth.
Gold bars come in weights starting from as little as 0.5g and go up to 1 kg, with 5g, 8g and 10g bars being popular choices with most people. It is essential to weigh factors such as your budget, investment and liquidity goals before you make your decision. Bars of a higher weight are cheaper to purchase, but lighter ones are easier to liquidate on short notice.
Purity is of key importance if you are purchasing gold bars for investment purposes. Make sure that you buy bars that are hallmarked or LBMA certified. This ensures that you are getting your money’s worth, and places you in a better position when you are looking to sell your gold bar. Also, you must insist on a purity certificate at the time of purchase.
Since gold bars have a higher worth as compared to coins, and aren’t possible to liquidate immediately, they are difficult to store at home, making alternatives such as lockers a safer option. However, if you wish to store them in a locker at home or the bank and don’t have one already, factor in an additional cost for the same.
Just like with gold coins, it is worth your time and money to visit a few reliable retailers before you make your purchase to ensure that you’re paying the least amount of premium possible. This is all the more important with gold bars because the amount you invest is significantly higher and even a difference of 1–2% can translate into substantial savings for you.
Gold bars are a lucrative idea for those who have money to invest and are looking to invest in a form that not only offers long term benefits but is also easy to liquidate. The highlights of investing in a gold bar are:
Currently gold bars can be sold to any jewellery retailer.
Explore more gold investment options here
Capital gains refer to the gains that the investors in gold have made from the sale of gold. Capital gains on gold are taxed in India. Therefore, one must make sure to ask for a proper bill while purchasing gold.
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