Investing in gold: bars or coins?

Physical gold is an asset that does not depend on a bank, a company or a government keeping its promises. Many private investors hold part of their wealth in gold to spread risk alongside shares, bonds and property.

Gold pays no interest or dividends, and its price can fall as well as rise, sometimes for years. It suits money you plan to keep for the long term rather than savings you may need next month.

Every bar and coin costs a little more than the value of its gold, and that difference is called the premium over spot. It covers refining, minting and distribution, and it is the main difference between bars and coins.

Larger bars carry the lowest premium per gram, which is why a 1 kg bar is the most efficient way to buy a large amount. Bullion coins such as the Krugerrand, the American Gold Eagle, the American Buffalo and the Vienna Philharmonic carry a higher premium, but they are recognised all over the world and can be sold one at a time.

• Bars: 1 oz, 50 g, 100 g, 250 g and 1 kg in 999.9 fine gold
• Coins: 1 oz each; Krugerrand and Gold Eagle in 916.7 gold, Buffalo and Philharmonic in 999.9
• Many investors combine both: a few larger bars plus coins for flexibility

Investment gold is exempt from VAT across the EU, so you pay 0% VAT on qualifying bars and coins. Bars must be at least 995 thousandths fine, and coins at least 900 thousandths fine, minted after 1800 and legal tender in their country of origin.

All the gold bars and coins listed above qualify. Silver and platinum do not fall under this rule and are taxed at the standard VAT rate, which is worth keeping in mind when you compare metals.

Gold takes up little space: a 1 kg bar is smaller than a smartphone. Most private investors keep it in a certified home safe or a bank safe deposit box, and many check whether their home insurance covers precious metals.

Keep bars in their original sealed packaging and coins in their capsules or tubes. Scratches and missing packaging do not change the gold content, but an untouched piece is quicker to sell.

Gold is one of the most liquid physical assets, and well-known coins and bars from recognised refiners are the easiest to sell anywhere. Holding several smaller units lets you sell part of your gold without breaking up a large bar.

When you sell to VIP MARKET, we buy investment bars and bullion coins at a price tied to the live spot price. You see the calculation before you agree, and the money is on your account by bank transfer the same day.