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Are 1-gram gold bars a good investment? Experts weigh in

For certain investors, 1-gram gold bars may make sense for their portfolio. Bloomberg Creative Photos

Many consumers have grown interested in gold in recent months. 

Persistent inflation is one driver of this trend (gold has long been considered a good inflationary hedge) and geopolitical tensions play a role, too. Many also use it as a way to diversify their investment portfolios and reduce overall risk.

Whatever the reason, consumers have many choices when purchasing gold. You can open a gold IRA, buy gold stocks or buy physical gold — also called bullion.

Bullion comes in many forms, including coins, bars, jewelry and more. And beyond that, there are even different sizes you can buy. One-gram bars are the smallest option, and while they can offer a good way to test the gold-buying waters, they're not right for everyone. Below, we've gathered what some experts have to say about 1-gram gold bars and what to consider before buying them.

You can easily review your gold investing options online here now.

Are 1-gram gold bars a good investment?

To more effectively determine if 1-gram gold bars are a good investment experts recommend having the answers to the following questions:

What's the purpose of your gold purchase?

According to Giles Maber, sales director at gold dealer Sharps Pixley, one-gram bars aren't great from an investment perspective, so if you're looking for something to pad your portfolio or bring in big returns, they may not be the best option.

They do, however, serve other purposes. 

"They're better placed as gift items or novelty items," Giles says. They can also make smart learning tools "that can educate children or family members about the value of money, and reinforce that gold is money and everything else is credit."

Learn more about investing in gold here.

How experienced are you?

If you're an experienced investor and have bought or sold gold before, one-gram gold bars may not be the best fit. But if you're new to the gold game? They can offer a smart "starter investment," says Peter C. Earle, an economist at the American Institute for Economic Research.

"Smaller bar purchases allow a new investor or collector to get their feet wet with respect to the ins and outs of transacting with precious metals dealers," Earle says. 

It can also help you build a foundation for future gold investments, according to Alexander Deluce, founder of Gold Telegraph. 

"If you're new to investing in gold and don't have the money to purchase in large quantities, one gram is a nice way to start accumulating," Deluce says. 

Do you want the most for your money?

If you're looking for the most bang for your buck, one-gram bars aren't the solution, experts say. As Giles explains, "As a proportion of the underlying value of a one-gram gold bar, you tend to pay a very high premium, which includes the production costs of that bar."

Typically, you'll get better value for your money with larger quantities of gold — on five- and 10-gram bars, for instance.

How liquid do you want to be?

Liquidity is something else you should think about. If you want to be able to quickly sell your gold and turn it into cash in a pinch, then one-gram bars can definitely be a smart option, experts say.

"If you need grocery or gas money it's a lot easier to sell off small bars than the larger ones," Fulton says. "It's not always easy to unload a 100-ounce bar worth $200,000 when you need cash in a hurry."

You should also think about liquidity for your heirs and dependents, too.  

"In the case of estates, it's much easier for the family to split smaller amounts versus a large bar," Fulton says. "I've seen it first-hand when some family members want to sell and others don't."

Are you traveling with or shipping it?

A one-gram bar can make for an easy shipment, or you can even travel with it directly if you're looking to bring it on a trip or purchase gold while abroad.

As Deluce explains, "They're very transportable, and they conceal a lot of value for their size."

The bottom line

While one-gram bars may be a good option for beginners or those looking for easy liquidity, they may not be right if you want to maximize your value or if you're a more experienced investor. If you're not sure what size gold bars to invest in, consider speaking with a financial advisor. They can help you make the right decision for your portfolio and goals.

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