Inexperienced buyers often have a hard time to understand the basic difference between gold bullion and coins, making their investment a risky business. Without understanding what the difference between gold bullion vs coins is, you may be putting your cash in a wrong type of gold.

Of course, gold is and will be a precious metal, however its different forms appreciate differently.
A common belief is that bars of gold are the most price efficient, and very likely the only obtainable type of “real” gold bullion, while round pieces of gold coins are not bullion. This is lead by a misconception that gold coins have limited supply, thus cost more, and their value is driven from the collectors’ perspective rather than from the gold value itself.

When thinking of gold bullion, most people, including investors and traders think of a gold brick stored in Fort Knox or other government secure facilities, seen in Hollywood blockbusters. However, it is not exactly true. The definition of bullion refers simply to a refined and stamped weight of valuable metal. The shape itself is not the determining factor of a gold bullion.

The definition of bullion refers simply to a refined and stamped weight of valuable metal. The shape itself is not the determining factor of a gold bullion.

This type of bullion are typically owned by governments and private banks. They are a great and the most cost effective way to buy gold, but only if you have a use for them, for example in manufacturing. These type of bullion do not make for the best investment because the liquidation process is rather costly, acquiring a lot of storage, handling, refining and other fees that other forms of bullion do not have. It is always easier to sell several smaller pieces of gold bullion, than one large brick.

Purchasing gold for gold’s sake, means that what you’re interested in is to buy a form of gold you can trade. This type of investment thinking is associated with gold bullion. You get a recognized weight and fineness of gold that you typically buy for the current market price of gold, plus additional expenses such as fabricating, refining, and shipping costs. However the value and liquidity of gold coins is better. You still enjoy the security of owning a piece of gold, but you can also profit from the collectible value of the coin, while at the same time selling your asset is much easier than selling a gold brick bullion.