You could buy smaller bullion bars, such as a 1 oz bullion bar, but they tend to be harder to sell back and the transaction costs are higher.įor institutional buyers or those looking to buy very large quantities of precious metals, large bullion bars are a more sensible option, due to the lower premiums. This is because sovereign coins are easily recognizable, easy to trade, and generally sell at higher premiums than bars. Bullion Coins-Which Are Better as an Investment?īullion coins, such as Gold American Eagles, are the best type of precious metals for most investors. Gold’s price is less volatile than silver’s price.īullion Bars vs.Gold is a better investment than silver for most investors.Therefore, it’s more accessible to small investors. The key advantage of silver is that it’s much cheaper than gold. As such, silver can be attractive during down cycles when the price of the metal is cheap. This is because silver has many industrial uses. Meanwhile, silver is more speculative and has a stronger relationship to economic activity. The price of gold is less volatile than that of silver, too. Gold has a much larger liquid market that is driven mostly by investment and jewelry demand. While both gold and silver have attractive features, gold is the better investment for the average precious metals investor. Should I Buy Gold Bullion or Silver Bullion? With a precious metals ETF, you don’t actually own the metal.Investors can get exposure to precious metals in two ways: physical gold (such as bars and coins) or financial products (such as ETFs).In this regard, buying the physical metal is a more sensible option. When investors buy gold ETFs, they are relying on financial institutions to deliver on their obligations. Furthermore, you own an asset that can be stored outside the financial system, which reduces counterparty risk.Ĭounterparty risk is the risk that the other party in an agreement will default or fail to live up to its obligations. In contrast, the key advantage of buying physical gold (such as bars and coins) is that you own the gold. This means that you cannot take delivery of the metal if the need arises. You have no claim on the gold within the fund. For example, if you invest in gold through an ETF, you don’t actually own the metal.

Buying silver coins