Gold ingots

For gold investors, gold ingots are a simple, straightforward investment vehicle.

Ingots are bars that, instead of being stamped with a design like gold coins, are instead cast from a mould. Manufacturers make ingots by freezing molten gold in a mould. The mould usually has some sort of design on it. Common designs include trademarks and notations of the purity of the gold.

Gold is a hot commodity right now because of persistent weakness in the world economy. For hundreds of years, gold has been the safe harbor investment when economic times are rough, thanks to its long association with wealth.

This economic downturn has been no exception. While other investments such as property and stocks have tanked, gold has increased in value. If the world economy, particularly the U.S. economy, continues to sputter, the value of gold is expected to continue to increase.

Ingots are a novel way to invest in gold. Ingots are usually thicker and rougher than bars that are stamped (otherwise known as biscuits). Ingots come in the standard gold bar sizes, from one gram to a 400 ounce bar called the “London Delivery Bar.” The “London Delivery Bar” is usually only traded by big banks or companies who want to secure their assets in this manner.

These ingots are held in bank depositories and usually aren’t transported physically when ownership changes. Usually when a “London Delivery Bar” is traded, a certificate of ownership changes hands.

Smaller bars exist for individual investors. Ingots come in a variety of sizes, however, the 1-10 gram ingots probably aren’t good for investors because they’re more costly to manufacture then they’re worth. Collectors may enjoy having them for novelty value, however.

For individual investors, one kilo and half kilo bars are probably the right fit. Premiums are reasonable and, at current prices, the half kilo bar costs about $10,000, while the full kilo bar will cost about $20,000.

Gold ingots value is determined by the value of the metal. Unlike gold coins, no numismatic or other subjective value comes into play. When buying gold ingots, the buyer pays for the value of the gold based on its weight and purity, plus a premium. Premiums are usually based on a sliding scale with lower premiums being reserved for large purchases of gold. That’s why most investors should try to buy gold ingots in bulk, rather than buying piecemeal.

The value of gold is impacted by a number of factors including the economy, geopolitical circumstances and supply and demand, among others. Because most of the gold ever mined is still accessible, under certain circumstances the gold market can be flooded if holders of long-standing gold reserves see an opportunity to sell.

As an investment, gold ingots are a fairly straightforward method of securing one’s assets in one of the safest commodities available.