How Much Is a Gold Bar Worth?
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Summary:
While you might picture a heavy brick, gold bars come in different sizes, from one-ounce bars worth between $1,000 to $2,000 up to the standard 400-troy-ounce gold bar, worth around $600,000. If you don’t want to keep gold bars under your bed, you can invest in related ETFs or futures instead.
Gold has been an important part of the human story dating back to some of the oldest civilizations on Earth. The first interaction between humans and gold started around 3,000 B.C. in ancient Egypt. People began using gold as an instrument to store value, barter, and display wealth that persists to this day. Gold is both visually attractive and rare, a combination that has led gold seekers to participate in some of the most important events in history, from gold rushes to wars. Today, humans continue to use gold to store value. We still invest in it through futures, ETFs, and physical manifestations of gold, such as jewelry and those shiny gold bars.
The current price of gold, or “spot price,” fluctuates constantly. The price can be influenced by traditional supply-and-demand factors as well as interest rates, inflation, and general uncertainty. The standard gold bar weighs 400 troy ounces (about 27 pounds), but gold bars can come in much smaller sizes, some as small as one ounce or even one gram. The price varies based on the spot price and stays relatively consistent no matter the size of the bar.
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What is gold, and why is it so rare?
Gold’s appeal is pretty easy to understand from a visual perspective. Anyone who has been to temples, mosques, or cathedrals covered in gold can attest to its beauty. However, what really drives gold as a valuable commodity is its rarity.
Gold is rare not only on Earth but in the entire universe. Its atomic structure makes gold an incredibly heavy atom, which makes it extremely hard to produce. This is true even in the depths of supernovas and dying stars, where many minerals and substances are created. Recent studies suggest that it might take more intense and rare events, such as a collision between neutron stars, to create it. Regardless, gold is one of the rarest precious metals, and thus it has become synonymous with wealth and power throughout history.
What is a gold bar, and how much is it worth?
A gold bar traditionally takes two forms — either gold ingot or gold bullion-minted gold bars. Although most people think of gold bars as the traditional 400-troy-ounce bars hidden in bank vaults in the movies, gold bars can take many forms.
A gold bar today must contain properly refined metallic gold made by a bar producer who follows regulations in manufacturing, labeling, and record keeping. These bar producers can produce many sizes of gold bars, from one gram to one ounce to one kilogram.
Pro Tip
A troy ounce is a measurement used to weigh precious metals and is equal to 31.103 grams. A regular ounce is equal to 28.349 grams. So when you see gold prices listed by ounces, they are usually by troy ounces.
Gold bar pricing
The price of gold bars is directly related to the spot price of gold, which is calculated in grams or ounces. Since 2010, the price has varied quite a bit between $1,000 to $2,000 per ounce. But to use the day of this writing as an example, the spot price per gram was $53.80, or $1,673 per troy ounce. Here are some more prices by gold bar weight:
| Weight | Price |
|---|---|
| 1 gram | $53.80 |
| 5 grams | $269.10 |
| 1 ounce | $1,673 |
| 1,000 (1 kg) | $53,800 |
| 400 troy ounces | $669,200 |
What is the spot rate and why does it change?
As you can see above, the price of gold is influenced by the spot rate. The global marketplace treats gold as a commodity, just like it would oil or wheat. The value of gold can then move up or down because of a variety of factors.
Supply and demand
In a free marketplace, supply-and-demand metrics are the most important factor when determining if an asset like gold or copper moves up or down in the value chain. There can be instances when supply supersedes demand and the price of gold drops or when demand might outstrip supply and the price of gold rises.
For instance, if there is civil unrest in countries that mine gold, then this could have an effect on the price. Any interruption in supply coming to market causes the price to shoot up.
Uncertainty in the market
Gold thrives on uncertainty in the market. As gold is historically the ultimate store of value, when markets begin to wobble or a crisis hits, people often invest in gold.
For example, the value of gold rose 50% in the six months prior to the first major collapse of the 2008 financial crisis (October to March 2008). There was a lot of uncertainty in the market, which caused people to take their money out of financial markets and put it in gold.
Inflation
As the ultimate store of value, gold historically does well in times of inflation. In the short term, when inflation bites, you will see the value of gold rise with it. This stands in contrast to bitcoin, which was also marketed as an inflation hedge, but is much more volatile. If inflation continues to progress, people will invest in gold to store value.
Interest rates
Interest rates that are instituted by central banks can have an effect on the price of gold one way or another. High interest rates offered by treasury bonds can be a direct competitor to gold. So the price of gold tends to go down with rising interest rates.
Looking to get into the gold market? Whether you’re concerned about inflation or you just want to show off to your friends, you might wonder if you are playing it safe with gold. Here are some advisors that can help you make sense of your investments.
How to invest in gold and gold bars
Investing in gold can be easy. If you would like exposure to the price of gold but don’t want to actually own gold, there are a host of financial products that you can invest in. If you would rather have physical gold, gold-minted bars or jewelry are options to consider.
Exposure to gold without the physical assets
Here are some ways to invest in gold without holding it in your hands, allowing you to capitalize on movement in the gold market without actually storing it anywhere.
- ETFs. ETFs are a great way to get exposure to an asset by offering pooled investment securities in a given market. SPDR Gold Shares and iShares Gold Trust are two gold ETFs that offer exposure to the gold market without you having to buy physical gold.
- Gold futures. If you think the price of gold is going to go up or down but you don’t want to buy the gold, you can invest in futures. Gold futures are popular, particularly for those with experience investing in other commodities, such as wheat and oil.
- Gold-mining company stocks. A good way to get exposure to gold is by going after the source. You can invest in mining companies that have significant operations related to the extraction of gold. Investing in individual mining companies can be done alongside other forms of technical analysis. This might help the investor feel like they have a better sense of what is happening in the gold market going forward.
Exposure to physical gold
What could be more fun than investing in bling? Fortunately, you have a lot of options to choose from, so don’t feel the need to purchase a large safe for your gold bars just yet.
- Gold jewelry. Many people have invested in gold without even realizing it by investing in gold jewelry. A 24-carat gold necklace has value, just like a bar of pure gold does. One can invest in gold while also enjoying the artistic approach that is common in gold jewelry. When you’re ready to sell, you can take it to a jeweler or have it appraised to learn the value.
- Gold coins. Gold coins are another way you can invest in gold. Similar to jewelry, it’s the amount of actual gold in the gold coins that counts (unless it is has a unique historical value). Some people combine various smaller gold bars with gold coins to create a collection.
- Gold bars. As mentioned earlier, gold bars are simply pure gold made into any shape and size that are produced with certain standards of purity and weight. You can purchase gold-cast bars and keep them at home, which makes sense for the smaller pieces. However, the large gold bars, like the one-kilogram or traditional 400-troy-ounce bars, can be risky to keep at home. Many banks offer the option for you to buy gold bars, but then keep the gold with the bank. This allows you to physically own the asset, but under the security of a bank, rather than just sitting at your house.
If you’re thinking about buying gold bars, be sure to purchase them from a reputable dealer. Here is a list of well-known gold bar producers that adhere to industry standards:
- Perth Mint
- Umicore
- Emirates
- Metalor
- PAMP Suisse
- Valcambi
- Englehard
- Johnson Matthey
- Credit Suisse
Pro Tip
If you want to buy gold jewelry for investment purposes, it’s important to ask questions related to the quality and production of the jewelry. You should have a good idea of the gold makeup (how many karats) and how the jewelry was cast. Pure gold is 24 karats, while 14-karat or 18-karat gold has been mixed with other metals.
FAQ
How much is a 27 lb. gold bar worth?
The spot price of gold changes all the time. But as of September 2022, the spot price is $53.80 per gram. Translated into grams, 27 pounds is 12,247 grams. Therefore, as of September 2022, a 27-pound gold bar is worth $658,889. If you’re talking about a 400-troy-ounce bar, which is just slightly over 27 pounds, that would be worth $669,200.
How much is a 1 kg gold bar worth?
Using the $53.80 price per gram figure, it would be worth $53,800.
How do I sell my gold bars?
Ideally, you would sell your gold to a professional gold dealer. You can find one at a coin shop or a coin show. You could also sell your gold to a website that buys gold or a pawn shop, but you will have to pay significant fees. If you want to sell to a dealer online, make sure they are reputable and will give you a fair price.
Can I sell gold bars to a bank?
Most banks do not accept gold bars directly from individuals due to evaluation issues. You would need to sell to an official broker, who then can perform the proper evaluation metrics. That broker will then pass the gold on to a bank.
Do gold bars lose value?
A pure gold bar should retain its luster over time. But the value depends on the spot price of gold, which can go up or down.
Is it better to buy gold coins or bars?
That depends on the investor and the reason they are buying. Pure gold bars are easier to liquidate as there is a consistent standard and verification of the quality. Gold coins, however, can differ in how much gold they contain and the quality.
That being said, coins can be interesting collector’s items and might have significance above and beyond the gold price. For instance, an ancient Roman gold coin is going to be worth more for its age and history than for the gold inside it.
Is it better to buy gold or silver?
As both are commodities, it really depends on the investment strategy. The prices of both can fluctuate due to different circumstances. The price of gold is generally higher than silver.
Key Takeaways
- Gold’s presentation and rarity have made it a way to store value and an expression of wealth throughout human history.
- Gold bars come in a variety of shapes and sizes, from one tiny gram to a 400-troy-ounce brick. They must be bullion or ingot gold bars and they need to be evaluated and certified by a professional gold dealer to be sure they meet industry standards for purity and weight.
- The price of gold bars is based on the spot price of gold, which can move up and down. Several factors contribute to the price fluctuations, including inflation, supply and demand, and market uncertainty.
- People can invest in physical gold items — such as coins, bars, and jewelry — or nonphysical securities, such as ETFs and futures.
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