Bars & Bullion
Buying & Owning Gold Bullion
The Gold trade is complicated and littered with pitfalls for the inexperienced and unwary. The Professional Gold Trade is a tight-knit group with many barriers to entry. Some of the facts about gold bars & bullion, buying, ownership, storage and resale may surprise you, but it is crucial you understand before purchase.
Gold Bars, Good Delivery, and the Professional Gold Market
- The gold prices you see published in the papers and on the internet are exclusively available to participants in the professional gold bullion market:- which is only gold dealers, refiners, government agencies, bullion banks and select few large investment organizations.
- The professional gold market only deals in “Good Delivery bars”. If you aren’t trading these bars you are excluded from both from the market and from the the competitive prices, which means you’ll pay more to buy gold and receive less when you sell it.
Fine gold is 100% pure gold
- Good Delivery bars are cast by a small group of accredited precious metal refiners from the professional bullion dealing communities in London, New York and Zurich. Good delivery bars are accurately assayed and are guaranteed always 99.5% pure gold or better.
- The Gold market trades pure gold content (gross bar weight x purity) which is known as fine gold, so no-one who trades the professional market bullion ever pays for impurities.
Retain high bullion integrity in a professional vault
- Good Delivery bars have the highest integrity because they have never been in private possession. From the day they’re first manufactured they are kept in bullion vaults which are recognized and monitored by the local gold dealing community. Bars are only ever moved by accredited bullion couriers and a careful record is maintained showing continuous storage through trusted hands. This guarantees gold bar integrity in a way that keeping your gold at home, or even in bank safety deposit boxes, simply cannot match.
- Because of this a professional buyer’s vault will accept deliveries of these bars direct from the seller’s vault without re-checking their purity. The seller gets paid quickly and efficiently, and the bullion trading costs are reduced for both buyer and seller. This is what Good Delivery bars are all about, and it’s why the high volume, high integrity, professional Gold bullion market is the only place where sale of gold gets the seller the widely published Gold bullion price.
- Good Delivery bars are big – usually 400 troy ounces each (12.4kg), priced at $1,000 an ounce equates to $400,000 a bar.
- However having the money to buy a whole bar or two only solves half the problem. You still need that key relationship with a formally recognized bullion vault to look after the gold while you own it. Otherwise your gold loses its guaranteed acceptance as ‘Good Delivery’, and cannot easily be sold at full price. But those vaults are ultra-cautious and typically don’t deal with the general public. Even if you did spend the considerable time, cost and effort of setting up a vaulting account the minimum monthly storage fee means you need about 15 big bars of gold to get an economic rate for bar storage.
These barriers keep private users out of the professional bullion market.
There are however ways to participate in the Professional Gold Bullion Market