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What informs the pricing of a gold bar

Investing in gold has been at an all-time high in the last two years. You might have asked yourself, how much money you needed to buy some gold for yourself. The cost depends on the kind of gold you want to buy. You have two options – regular gold coins or gold bullion bars.

Do your homework now but don’t take too long. The price of gold is still favourable for people who are investing in the yellow metal for the first time. You cannot afford to sit on the sidelines and wait for gold to hit some magical number. Experienced gold investors understand the importance of timing. They understand the importance of spotting the perfect buying price. They also understand that gold is best thought of as a long-term investment. In recent times, more people have been learning about how useful gold is for hedging against inflation and weathering the effects of political and economical turmoil and have been turning to Melbourne gold buyers for information.

When you embark on buying gold bars to build yourself a nest egg, you will come across the term ”melt value”. This is the value of the gold that is extracted when your gold has been melted. This term is used a lot by gold buyers throughout the world.

You would worry about the melt value of gold if you are trying to sell gold that isn’t .999 fine. Gold bullion bars are priced much closer to the spot price of pure gold because they are made with the finest quality gold. The melt value is determined by the amount of pure gold within a gold item. To determine the melt value of gold is calculated as such:

mass of precious metal x spot price = melt value

If you had an ounce of gold bullion and the spot price of gold is $1,750 chances are, you can sell it for a price that is very close to the spot price. If you have an 18K piece that weighs 1 oz, you would need to keep in mind that only 75% of the item is gold which means you have 0.75 oz of gold, multiply that by the spot price ($1,750) = $1,312.50.

Why would you ever need to worry about the melt value of an ounce of bullion bar when it is supposed to be virtually the same as the spot price of gold?

Well, the condition of the gold plays an important part. When buying or selling gold the condition it is in affects the final price. If the bullion is not in the good condition, its price depreciates. That is why Melbourne gold buyers always advise customers to keep their gold stored safely in protective packaging.

Gold bullion bars are regarded as the purer form of gold. They are an ideal choice for investors who are interested in gold for the sake of gold, not just its artisanal value. Here are other characteristics that make gold bars more desirable:

  • They are purer
  • They come in different weights and sizes which allows investors to explore a myriad of options
  • They are more affordable compared to bullion coins because there are no premiums linked to the intricacy of the design

The bottom line is that gold bullion bars are the best chance for anyone who wants to get into the investment world to prosper.