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Are Gold Bars a Good Investment in 2022? An Analysis

July 14, 2022

Few metals claim such a long and lauded pedigree as gold. Its use as a decorative adornment dates back to at least 4000 BC, and over the millennia it’s served as a luxury item, a status symbol, and has even taken on religious significance at points. But its lasting legacy is as one of the first standardized mediums of exchange for international trade and finance.

And that legacy carries to the modern day, with gold bars and coinage being popular investment avenues. But are they a wise venture in 2022? To answer that, let’s take a look at gold’s value as a commodity, and why you should invest in gold bars, specifically.

Reasons to Own Gold

The main reason you would want to buy gold is for it to serve as a safe haven for your wealth in uncertain times. Economic recessions, hyperinflation, or geopolitical conflicts like the current war in Ukraine all tend to spark bearishness across the financial sector. In times like these, investors seek out venues to safeguard their holdings.

Gold has long been a favorite because it’s a physical commodity, as opposed to confidence-based assets like stocks and bonds. It’s a finite resource that’s been valued since the dawn of recorded history. Not only that, but its practical applications in technology and heavy industry mean that it will always be in demand.

That’s not to say its value can’t ebb and flow like any other asset. But its intrinsic qualities make it a safer store of value than financial assets.

Why You Should Buy Gold Bars

So why should buy gold bars in particular? Well, depending on your investment strategy, it could have certain advantages over other forms of gold.

First, you should understand the difference between gold bullion and coins.

Gold coins indeed offer unique investment opportunities. In addition to being minted with a designated weight and purity, they also often have a face value as state-issued gold coins technically count as legal tender. However, no one would ever actually use a $5 Gold Eagle to buy a hot dog or the like.

But their function as legal tender does add to their value to collectors. Each coin may also be marked with a date of production, country of origin, and an engraved design, further making them unique.

Gold bars, by contrast, are not minted with the collector’s market in mind. Though they may occasionally have designs engraved upon them, they don’t carry a face value and aren’t legal tender. Their value comes purely from the weight and purity of the gold their made from.

Their purpose is for the investor who wants to accumulate gold in bulk. This makes them the better option for securing large amounts of wealth in gold form.

Maximizing Your Gold Bar Investment

Owning physical gold is a great bulwark against economic instability. And buying gold bars is often the most efficient way to stockpile gold in quantity.

That said, the savvy investor would do well to understand all of their options. To get a better view of the complete picture, check out our guide on all the ways you can invest in gold.

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