Gold has been a hot commodity since the California Gold Rush of 1848. It is synonymous with wealth and luxury. Despite its influence on society and economy and its prevalence, very few people, including myself, have ever laid eyes on an actual bar of gold.
As a child, I always imagined a brick of gold would be as large as my head and weigh a whole ton. The truth isn’t quite as exaggerated.
The most common standard of weight for gold bars in banks across the world is 400 troy ounces or 27.3 pounds. There are exceptions to this standard like the 1-kilogram brick which is 32.15 troy ounces or 2.2 pounds. The most popular size among investors is 1 troy ounce.
In truth, my business with the gold bar really sets the standard for the size and weight of the bar I purchase. Bars come in small, medium or large sizes and vary in ounces within each of those categories.
It makes purchasing gold bars more accessible for varying price ranges.
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What is the Standard for Gold Bars?
The process of creating a cast bar has changed with time. The more modern approach allows for more precision and consistency when it comes to the weight of the bar.
Gathering together small strips or pieces and placing them inside a crucible or mold, they are weighed on a balance and then melted down in a furnace.
This method allows the manufacturer to make different shapes other than the standard bar if desired.
A gold bar should be .999 millesimal fine gold content or 99.9% pure gold. There are two ways in which a gold bar is produced, it is either cast or minted. While cast bars are more cost-effective and unique, minted bars are what we are more commonly used to seeing displayed.
Minted bars go through a similar process as the cast bars but they are also placed in a machine that compresses them to get uniformity in the dimensions of the bar and then finished off with a process called striking to make it more malleable, smooth and shiny, and free from any blemishes.
Both processes allow for the maker to place a branding of sorts on the bar. Whether that be the manufacturer’s logo, the weight of the bar and the purity.
However, minted bars allow for far more complex and detailed designs than the cast bars.
What Determines the Weight of the Gold Bar?
Gold itself has an atomic weight of 196.966569 u with a density of 19.3 grams per cubic centimeter. Therefore, each cubic centimeter of gold would weigh 0.62 troy ounces.
For a comparison, gold is almost twice the density of silver and seven times the density of aluminum.
The weight of the bar is dependent on the size of the bar being purchased. If I wanted to start investing in gold and test the waters of the bouillon market there are options suitable for my small investment. Once I become a more seasoned investor, there are other options that would accommodate bigger pockets.
The reason most investors prefer 1 troy ounce bars is because it is the most liquid option, or the easiest and quickest to turn into ready cash.
Either way, there is an option for anyone wanting to dip their toes.
|1/100th troy ounce||20 gm (0.64 troy ounces)||5 troy ounces|
|½ gm (0.016 troy ounces)||1 troy ounce||250 gm (8.04 troy ounces)|
|1 gm (0.032 troy ounces)||50 gm (1.6 troy ounces)||10 troy ounces|
|2 gm (0.064 troy ounces)||100 gm (3.22 troy ounces)||500 gm (16.08 troy ounces)|
|5 gm (0.16 troy ounces)||1 kg (32.15 troy ounces)|
|10 gm (0.32 troy ounces)|
The London Bullion Market Association does have larger options than the ones mentioned. I could purchase what is referred to as a “good delivery bar” which is 400 troy ounces or 27.3 lbs, with dimensions 3.72” X 10.7” X 2.03”.
With this option I have to be mindful of the purity, appearance, weight and brand of the gold bar. Making sure they meet the standards in each category.
What is the Cost and/or Value of a Gold Bar?
Common names you will see are LBMA, COMEX and NYMEX to name a few. It is important to note that it is common for the spot price to fluctuate throughout the business day.
The cost of a gold bar is dependent on the spot price which is the base value that is associated with 1 troy ounce of gold. This is the average price of products being sold at derivative and mercantile markets.
If I am dealing with a precious metals or gold bullion dealer I also have to keep in mind that in order for them to turn a profit they are going to add what is called a premium to the total price, which is referred to as the asking price.
The premium covers their business overhead expenses and their profit for the sale. Premiums will vary in price depending on the mint of the gold bar.
Private, more reputable mints are going to have a higher premium than more obscure mints. All things to consider if I want to resell the gold bar at some point.
Despite there being a standard in terms of weight and size of a gold bar, it’s clear there are quite a few options to sink my teeth into. I can start small, even smaller than the typical weight investors choose if I want and work my way up from there.
Keeping in mind that just as the weight and size of gold bars fluctuate, so does the price and value. Weighing out my options both figuratively and literally when it comes to purchasing gold bars.
I now know that weight matters and can affect a few factors when it comes to investing in gold bars.