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What is a Gold Bar?

Stack of gold bars.
Ingots are cast by pouring liquid metal into molds.
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  • Last Modified Date: 13 August 2014
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A gold bar is a gold ingot which can be bought, sold, or traded as an investment. Gold bars are also sometimes used to transport gold for manufacturing, since they are designed to be easy to handle. Gold's status as a commodity waxes and wanes with the market, but some people feel that gold is a very solid investment, since gold always has at least some value. Like other commodities, the value of gold shifts in response to supply and demand, with very wealthy investors controlling the supply of gold by purchasing enough to influence the market.

Ingots are chunks of metal of a precise weight and size which may be cast by pouring liquid metal into molds, or minted by cutting metal to size. The resulting gold bar are usually stamped with markings to indicate its weight, so that the value of the metal is clear, and many ingots also include ornamental and heraldic decorations which provide information about where the ingot was produced and when. A gold bar may be square, rectangular, round, or some other shape, although rectangular bars are most common.

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Historically, gold was used directly as currency, eventually being replaced by lesser metals and papers. Some nations chose to maintain a gold standard, in which their currency was backed by reserves of gold. However, the gold standard limited the overall amount of money a nation could mint or print, and many countries abandoned their gold standards in the mid-20th century. In several cases, this led to severe inflation and concerns about the stability of currency.

Solid gold bars are perceived as a good investment because the metal in each gold bar has inherent value. People who put all of their money into currency might wake up and find that the currency had devalued radically, thereby causing them to lose all of their funds, but gold is not nearly as susceptible to a radical fall in value. However, in order to make investing in gold a truly profitable and sound investment, people need to purchase a very large volume of gold bars, and this is beyond the means of many people.

Gold bars are also subject to manipulation by unscrupulous individuals who may shave down the bar so that it weighs less than its label states, or melt down the gold and alloy it with a cheaper metal to create a gold bar which is less valuable. For this reason, it is important to be careful when purchasing gold bars, to ensure that the bars are truly gold, and that their stated weights are accurate. Using the services of an assayer or metals expert is highly advised, especially when purchasing gold through third party sellers instead of the producers of the gold.

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pleonasm
Post 3

@KoiwiGal - Gold does actually have quite a few uses in industry, not least that it can coat other metals to stop them from tarnishing or rusting. So it's not surprising that it has held some value now, even though we are basically moving past a society where we need physical representation of money.

I don't think gold bar prices are going to sink any time soon though, so it's probably still a fairly safe investment.

KoiwiGal
Post 2

@bythewell - Well, the reason that gold was always considered so valuable wasn't just because it was rare. It was also impossible to decay. Gold doesn't rust or tarnish the way other metals do, so if you have a gold coin that is valued on its weight, it won't weight less twenty years from now.

Gold was also relatively easy to identify. It was softer than most other metals which is why people would bite on coins to check if they were real gold.

It still doesn't have much value besides what we ascribe to it, but it's not surprising that it is used as a currency. In a society with very little technology, gold is the closest thing we would have to a permanent, transportable substance.

Without a government, paper might still be considered cash, but it physically wouldn't last that long.

bythewell
Post 1

I have always been curious as to whether gold is truly going to hold its value in a time of crisis the way that people seem to think it will. I can remember my cousin telling me years ago that if there was a zombie apocalypse or something like that, she would stock up on gold bars and jewels rather than cash because cash was only paper and it would become worthless.

But you can't eat gold either. It really only has value because people say that it does. I know that it used to be valuable because it was rare, but that's basically just the same agreement we make about cash money today and it's not something that will hold up if we get hungry enough.

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