April 14, 2021

Gold is one of the most reliable vehicles for preserving your wealth. While it’s sometimes criticized because it doesn’t generate interest or rent, it has a proven history as a long-term inflation hedge. In many markets, including today’s low-interest world, it performs better as a safe haven for your money than bonds, which can wind up losing money if inflation is higher than the returns. Some bonds even produce a negative yield before inflation is factored in.

By comparison, under the right circumstances, gold can be a compelling alternative. It’s often overlooked, but gold is a good investment that prepares your portfolio for difficult times. Not only is its value proven against inflation, but as stock market volatility scares away investors, they often turn to precious metals instead.

It’s a great investment to have and belongs in just about every portfolio. It’s also very easy to buy in physical bullion, and selling gold in Canada is quick and easy, as there’s always a market. But it comes in many different forms, sizes, and weights.

Bullion Terminology

Before you can decide what kind of product you want to own, it will help if you’re familiar with the terminology.

Gold Coin: The distinguishing feature of a gold coin is that it has a face value, and it is considered legal tender in the country where it is made. They can only be made a sovereign mint. The face value is just a nominal amount and usually much lower than the fluctuating value of the metal the coin is made from.

Older, unique coins might also have numismatic value. You learn about the value of old Canadian coins by bringing them into Muzeum in Yorkville for a free evaluation.

Gold Bar: A gold bar is bullion made by either a mint or a private refiner with its weight, purity, and manufacturer stamped on it. It is not legal tender but is valuable for its precious metal content. There are two types: cast and minted. Cast bars are made by pouring the molten metal into a mold. The result is an uneven surface with minor imperfections, and each piece is unique. Minted bars are made from blank cuts and have a smooth, perfect surface, and it costs the manufacturer more to produce.

Gold Brick: An informal term often used for a gold bar of significant weight. It can be used to refer to the 400 oz gold brick used by central banks. Central banks buy huge amounts of bullion. In 2019 alone, they added 650 tons to global reserves. It’s an economical way to store such large amounts of wealth for banks, but as of March 19, 2021, the spot price of a 400 oz brick would be $870,220 CAD. A gold brick is mostly a product for banks and other institutions.

Gold Wafer: On the other end of the spectrum is the wafer, which refers to smaller, thinner bars, such as 1 gram gold bars.

Ingot: An ingot can refer to any piece of metal, whether it’s precious or not, that has been poured into a mold.

For more information about the different types of bullion products, purity, and karats, check out this guide to gold measurements.

Gold Coins vs Gold Bars

Credit: ravitaliy via Freepik 

Should You Buy Gold Coins vs. Gold Bars?

Your primary options come down to coins and bars. The biggest difference between these two forms of bullion is the premium. Every reputable bullion dealer charges a percentage above spot to cover their own costs of doing business. The mint or refiner also charges over spot to cover the costs of making the product. Since bars are cheaper to manufacture, you can buy gold at a lower price per ounce by buying bars. If your chief concern is buying as much bullion as you can at the lowest price, bars are the best product for you.

Coins may come with higher premiums, but they offer other qualities that make them worth considering. Some coins have a limited mintage, meaning they’re harder to come by and may gain collectible value. Numismatic value allows a coin to appreciate more than its metal. The Royal Canadian Mint explains how mintages work and how you can look up mintages of a coin through the serial number or on their website.

Coins are an excellent option for collectors. Not all coins will gain numismatic value over time, and you may have to wait a considerable amount of time to find out. Nevertheless, collectors who appreciate the designs on coins and want to own something both beautiful and special will find that gold coins provide both enduring value and a passionate pursuit.

How to Sell Gold Bars in Canada

When gold prices in 2020 reached recent highs of $2,000 USD per ounce, a lot of people who already owned the metal started looking for places to sell gold.

In August 2020, gold hit an all-time high price due to several factors. COVID-19 had a lot to do with the escalation of bullion prices. Seeing the huge stimulus packages in the United States and other countries, many investors became concerned about the long-term stability of the US dollar and other currencies. Since gold was widely accepted as currency across the world for much of human history, investors still place considerable faith in its enduring value, especially during a time of crisis.

Gold prices remain bullish as many of those concerns linger despite the looming COVID-19 recovery. Investors are still looking to buy the dip, which will inevitably push prices back up. Gold is in a fairly strong position right now, and if you have gold coins or bars that you’re looking to sell, now can be a good time to capitalize on your gains.

If you’re wondering where to sell gold in Toronto, look no further than Muzeum. We can appraise your old jewellery and coins, just schedule an appointment and find out what you can get for your precious metal belongings.

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