WHY BUY BARS RATHER THAN COINS?

Expat Living (Singapore) - - Life & Family -

Pre­mium

Gold prod­ucts fol­low this rule: the smaller the prod­uct, the higher the pre­mium. The pre­mium is the mar­gin added by the seller on top of the stan­dard gold price. A com­pet­i­tive pre­mium for gold is around 1 per­cent. For coins, the pre­mium can reach 20 per­cent! If the price of gold on the in­ter­na­tional mar­ket is US$100 per 2.5 grams, you will pay US$101 for this amount of gold in bars, and US$120 by buy­ing coins.

Liq­uid­ity

So, from an in­vest­ment stand­point, bars are more ap­peal­ing. Above all, their liq­uid­ity – that is, the ease for cus­tomers to sell them back – is high. Bars pre­vi­ously had low liq­uid­ity since their stan­dard weight was a very heavy 12.4kg (around US$500,000 value); this is why coins be­came pop­u­lar. But now with the avail­abil­ity of small bars – 100 grams, for ex­am­ple – it’s easy to find buy­ers for your prod­uct. The best bul­lion deal­ers can pro­pose a 1 per­cent pre­mium for 100g bars.

Fun­gi­bil­ity

Coins have spe­cific char­ac­ter­is­tics (for ex­am­ple, a type of an­i­mal stamped onto the coin) that make them pop­u­lar among col­lec­tors. How­ever, the de­mand for a spe­cific prod­uct can dif­fer be­tween coun­tries. So, the coins you paid a high price for in the UK be­cause of cer­tain char­ac­ter­is­tics may have less value in Asia. For bars and es­pe­cially LBMA bars, the price is stan­dard­ised around the world.

For more in­for­ma­tion, call 6933 1391 or email con­[email protected] bunker-group.com

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