Tags: Money | gold | bars

4 Things You Need to Know About Gold Bars

By    |   Tuesday, 30 June 2015 06:49 PM

Many investors look to gold as an insurance policy against bad economic times. Investing in the precious metal can take many forms, ranging from owning gold bullion to participating in exchange-traded funds, each with a separate set of considerations.

Here are four things to know about gold bars.

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1. Size
A gold bar may look for all the world like a generously portioned chocolate bar sheathed in yellow foil. But please resist the urge to consume it. The standard gold bar of the kind stored at Fort Knox is an indigestible 400 ounces, or 27.5 pounds, sized 7 inches by 3 5/8 inches by 1 3/4 inches, according to the U.S. Mint.

2. Purity
Gold bars are not pure gold, because pure 24-carat gold would be too soft for convenient transport or storage. So each bar contains a tiny proportion — as little as 0.01 percent — of another metal such as silver or copper. The minimum allowable purity for investment-grade gold is 99.5 percent, as set by the London Bullion Market Association, which sets gold prices for its customers twice a day.

3. Differences
The Federal Reserve Bank of New York, which owns no gold but stores it for foreign governments, reports that while gold bars generally look alike there are telltale differences in shape and markings that identify age, casting site and purity. Bars cast in the United States before 1986 were rectangular bricks. "Currently, however, bars cast in the United States conform to the long-standing international standard for most bars cast overseas, which are trapezoidal in shape," according to the New York Fed.

4. Potential for Fraud
Unfortunately, gold bars can be faked. The government of Ethiopia found this out the hard way in 2008 when it inadvertently bought a consignment of fake gold, the BBC reported. Counterfeit gold bars — filled with tungsten surrounded by a thin layer of actual gold — were found circulating in New York and England in 2012, according to WNYW-TV. But industry professionals writing on Quora say that fraudulent gold is rare, and getting rarer, because internal controls and testing technologies have made fake bullion easier than ever to spot.

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Many investors look to gold as an insurance policy against bad economic times. Investing in the precious metal can take many forms, ranging from owning gold bullion to participating in exchange-traded funds, each with a separate set of considerations.
gold, bars
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2015-49-30
Tuesday, 30 June 2015 06:49 PM
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