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1-gram vs. 1-ounce gold bars: Which investment is better in 2024?

Realistic Gold Bars on Finance Graph Background, Depth Of Field
Before you invest in gold bars, it's important to understand whether 1-gram or 1-ounce gold bars make the most sense for your portfolio this year. Getty Images

No matter what the economic landscape looks like, most savvy investors will explore diverse avenues to safeguard their wealth. What that typically means is reducing the risk from more volatile investment assets, like stocks or real estate, by adding more stable investments to the mix. 

And, one of the safer alternative investment assets that has grown in popularity recently is gold. In fact, gold investing hit an 11-year high in 2023, due in large part to gold being a reliable investment that offers unique benefits — like long-term price stability and inflation hedging — when used to diversify portfolios.  

That said, there are lots of different gold assets to consider, from gold bullion to gold stocks, gold ETFs and gold IRAs. But one of the more popular options is gold bars, which are available in different sizes, including 1-gram and 1-ounce gold bars. If you're considering a gold bar purchase this year, though, do 1-ounce or 1-gram gold bars make more sense right now?

Explore the top options you have for gold investing here.

1-gram vs. 1-ounce gold bars: Which investment is better in 2024?

The right choice between 1-gram or 1-ounce gold bars depends on unique factors, like your investment goals, budget, portfolio diversification needs and more. However, it can help to weigh the potential benefits and downsides of each option to help determine which makes the most sense for you.

The pros of investing in 1-gram gold bars

When it comes to investing in 1-gram gold bars, there are some potential upsides to consider, including: 

Accessibility and affordability

One of the most significant advantages of 1-gram gold bars is the accessibility and affordability these smaller bars offer. By buying this weight of gold bars, investors with limited capital can enter the gold market without committing to a substantial upfront cost. For example, it's easy to find 1-gram gold bars for $75 to $100 right now, though the prices can vary significantly by gold dealer.

Still, with the spot price of gold hovering above $2,000 per ounce, the lower price of a 1-gram gold bar offers a less expensive way to add gold to your portfolio. This can make 1-gram bars an attractive option for those who are just starting their investment journey or wish to diversify their portfolio without a significant financial commitment.

Learn more about how you can get started with gold investing today.

Liquidity and flexibility

Smaller denominations of gold bars also offer increased liquidity and flexibility and 1-gram gold bars are no exception. One of the big advantages to this type of bar is that they can be easily traded, sold or used for transactions when needed, which isn't always the case with larger bars — which have a higher price point and therefore can limit the buyer pool. 

This liquidity can be particularly advantageous during times of market volatility, allowing investors to respond swiftly to changing economic conditions.

Portfolio diversification

For investors looking to diversify their portfolios without allocating a large portion of their assets to gold, 1-gram bars provide an ideal solution. These smaller increments allow for a more nuanced and diversified investment strategy, reducing exposure to risks associated with larger, more concentrated holdings.

The cons of investing in 1-gram gold bars

There are also a few downsides to consider when investing in 1-gram gold bars, including: 

Premiums and transaction costs

While 1-gram gold bars have lower upfront costs, investors should be mindful of the premiums and transaction costs associated with these smaller denominations. In some cases, the percentage markup on 1-gram bars can be higher than that of larger bars — and buying smaller denominations could also mean losing out on potential bulk discounts offered by gold dealers. So, it's crucial to factor in these costs when assessing the overall return on investment to make sure it's the right move for you.

Storage challenges

Investors who accumulate a significant quantity of 1-gram bars may also face storage challenges. Storing a larger number of smaller bars can be cumbersome and may require additional security measures — and, in turn, increased storage or insurance costs. This consideration becomes more relevant for investors with long-term holding strategies, who may find the storage challenges to be a significant downside over time.

The pros of investing in 1-ounce gold bars

If you're wondering whether 1-ounce gold bars make more sense to invest in, here are a few potential upsides to consider: 

Store of value

Historically, 1-ounce gold bars have been considered a reliable store of value. Their larger size allows investors to hold a considerable amount of wealth in a single, tangible asset. During times of economic uncertainty, the perceived stability and intrinsic value of 1-ounce bars can be a reassuring factor for investors, adding to the allure for investors.

Lower premiums

While 1-ounce bars may have higher upfront costs due to the higher cost of buying in, they often come with lower premiums compared to smaller denominations. This means that, proportionally, investors pay less over the spot price for larger bars. For those with a long-term investment horizon, lower premiums can contribute to a more favorable return on investment.

Easier storage

Investors holding 1-ounce gold bars may also benefit from easier storage solutions. A smaller quantity of larger bars can be more conveniently stored, reducing the logistical challenges associated with safeguarding a sizable gold investment.

The cons of investing in 1-ounce gold bars

There are also a few downsides to consider before investing in 1-ounce gold bars. These include:

Entry barriers

The higher initial investment cost required for 1-ounce bars may pose a barrier for some investors, especially those with limited capital. This can limit accessibility and may not be suitable for those seeking a more modest entry into the gold market.

Less flexibility

Larger denominations also offer less flexibility in terms of liquidity. For example, selling a portion of a 1-ounce gold bar may involve more significant transactional complexities compared to smaller increments — and the higher buy-in point for a full 1-ounce gold bar may further limit the pool of buyers. This reduced flexibility may be a consideration for investors who value quick and agile responses to market conditions.

The bottom line

The choice between 1-gram and 1-ounce gold bars this year ultimately depends on individual investor preferences, financial goals and risk tolerance. Both options have their merits, and understanding the specific advantages and considerations associated with each is crucial for making informed investment decisions. Ultimately, investors should align their choices with their broader financial objectives for a well-rounded and resilient portfolio.

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