The value of a gold bar is constantly changing, as the price of gold fluctuates daily. Gold has a strong reputation as a store of value and tends to perform well in challenging economic conditions.
Let’s explore the worth of a gold bar and the essential factors to consider.
How much are gold bars worth?
The value of a gold bar is determined by its size and the current spot price of gold. As of July 24, the spot price stands at $2,397.50 per troy ounce. A troy ounce is equivalent to 1.097 standard ounces and is the standard unit of measurement for gold weight. Even a small amount of gold holds significant value due to its density.
The worth of a gold bar depends on its size:
- The standard 400-troy ounce bar: This large bar, commonly seen in movies, weighs 27.4 pounds and is valued at $959,000 at the current spot price.
- The kilobar: Weighing a kilogram, or 32.15 troy ounces, this bar is priced at around $77,080 based on the current spot price.
- The 100-troy-ounce bar: This gold bar is valued at approximately $239,750 at recent prices.
Unlike other metals like silver and copper, gold retains a high value in small quantities, making it an attractive option for investors.
Retailer Costco recently made headlines by offering small gold bars for sale online, slightly above spot prices, highlighting the considerations of owning bullion.
What is the best way to invest in gold?
While owning a massive 400-ounce gold bar may seem appealing, the high costs associated with trading such bars can be prohibitive. The spreads on physical gold are substantial, leading to significant price discrepancies.
Buying gold bullion may not be the most efficient way to invest in gold due to the wide spreads. Investors could incur losses both when purchasing and selling gold bars, with potential costs for securing physical gold also to be considered.
For those seeking to invest in physical gold with minimized costs, owning an exchange-traded fund (ETF) that holds gold is a more practical option. The fund manages the storage and security of the metal, offering fair market value without commissions.
Alternatively, investing in gold miners can provide additional opportunities for returns, as their stock can appreciate not only with rising gold prices but also through increased production.
There are various other avenues for investing in gold that may offer greater potential for growth than purchasing physical gold.
Bottom line
The value of a gold bar is influenced by its size and the ever-changing price of gold. With its ability to retain value in small quantities, gold is an attractive option for investors and traders in the precious metals market.