Advantages of saving in gold:
Gold stands out from other metals due to its unique characteristics. Some of these features include:
Stability and durability: Gold is hard to oxidize and is highly resistant to corrosion and wear. In other words, gold is a stable metal that retains its shape and color over time and does not degrade.
Rarity: Gold is a rare metal that requires significant cost and time to extract. This rarity, combined with high demand, makes gold even more valuable over time.
Convertibility: Gold is easily convertible into coins, jewelry, and other items. In other words, gold is a versatile metal that can be used for various purposes.
Global value: Gold is recognized as a currency unit and a reference of value worldwide. This means that gold can be bought and sold in any country, and its value is not influenced by exchange rates or financial policies.
Protection against currency depreciation: Gold resists inflation and economic fluctuations. In other words, gold serves as a safe investment, preventing the loss of money’s value over time and maintaining purchasing power.
Long-term investment: Gold increases its value over time. In other words, gold is a growing asset that can help increase your wealth over time and achieve substantial profits.
Methods of Saving Gold:
As mentioned, whether to buy gold or coins: Gold has a wide and diverse market. Therefore, to reach the best savings in gold, we must first be familiar with different investment and savings methods. There are many ways to buy and invest in gold; for example, you can invest in gold by buying shares of gold mining companies, but this method is not very well-known or popular! Therefore, we will focus on the common methods of buying gold for the purpose of saving. In general, the methods of saving gold include:
- Karizma Card Gold-backed Account
- Gold Investment Funds
- Buying Refined Gold
- Buying Gold Coins
- Buying Secondhand Gold
- Buying Gold Bars
- Buying Gold Jewelry
- Gold Deposit Certificates
What is Refined Gold?
Buying Secondhand Gold for Savings:
Should we buy gold or coins: Secondhand gold is another suitable option for gold savings. This type of gold has a lower price compared to new gold, which reduces investment costs. However, you should ensure that you purchase secondhand gold from reliable sellers to confirm its authenticity and quality.
Advantages and Disadvantages of Saving Gold: According to the World Gold Council, the domestic demand for gold jewelry and coins in Iran in 2022 was around 50 tons. This statistic includes purchases by the public for investment and also industrial uses. This data indicates that gold is an important source of investment for Iranians. Let’s review the advantages and disadvantages of saving gold:
Advantages of Gold for Saving:
- Preservation of Asset Value: Gold, as a stable asset, is resistant to economic fluctuations and inflation and can preserve the value of your assets.
- High Liquidity: Gold is easily bought and sold, and you can quickly convert it into cash when needed.
- Diversification in Investment Methods: You can use various methods such as buying coins, gold bars, refined gold, gold investment funds, and gold deposit certificates.
- High Security: By using gold savings accounts and certificates of deposit, the risks of holding physical gold are reduced.
Tips for Saving Gold with Low Income:
If you intend to allocate your savings to gold with a small capital and on a monthly basis, there are several important points to consider to make the best use of your investment and minimize risks. We will explore these tips next.
How to Buy Refined Gold:
Which Gold is Good for Savings?
Refined gold is the best option for savings in Iran because it does not have manufacturing fees or value-added tax, and over time, its price increases, providing a good profit. Additionally, you can save refined gold with a very small initial budget and gradually increase the amount of your savings.
For Investment, Is It Better to Buy Coins or Refined Gold?
If your question is whether to buy gold or coins, we would say that the choice between coins and refined gold for investment depends on various factors such as investment goals, risk tolerance, liquidity, and your budget.
By looking at the table below, you can finalize your decision between buying coins and refined gold. In the table, we have compared the most important investment features of both types of gold to answer the question of whether refined gold is better than coins.
The Impact of the Domestic Market on Coins is Greater:
If you are looking for gold for investment, and you want it to be influenced by the domestic market in Iran, you can choose coins for investment, which have a focused market. However, if you’re looking for gold with a global and decentralized market, you can choose refined gold.
Also, because refined gold is global, domestic factors do not affect its price.
There Are Restrictions on Buying Coins Compared to Refined Gold:
Since the beginning of January 2022, the Commodity Exchange has announced that each individual can purchase a maximum of 100 coins (equivalent to 10,000 shares of securities) in this market. This restriction on purchases may be important for some investors and could steer the decision of whether to buy refined gold or coins towards refined gold.
For buying refined gold, there are virtually no restrictions, and you can purchase amounts as small as a few grams (for example, ten “sot” of gold) or as large as several kilograms without dealing with legal limitations.
Coins Offer Greater Investment Variety:
One of the most important differences between buying gold or coins lies in their form of offering. Different types of coins in Iran are produced and introduced to the market in various sizes and dimensions, but refined gold always has one form.
This diversity in the coin investment market allows you to buy half coins, quarter coins, or even Parsian coins; however, it is essential to first familiarize yourself with the market for each and understand the investment details of each.
Parsian Coin or Broken Gold:
Investment Tips for Coins:
If your choice for investment is coins, don’t forget these points:
- Be aware that the price volatility of a full coin is greater compared to other coins.
- The minting year of the coin affects its price, and coins with lower minting years are cheaper.
- To ensure the coin is not counterfeit, pay attention to the engraving on the coin and its packaging.
- As you know, the coin premium depends on the supply and demand. Among the coins, the quarter coin and the one-gram coin have the highest gold premium.
- Also, consider the pros and cons of buying coins for investment.
What are the main differences between gold and coins?
Choosing between buying gold or coins depends on several factors, which we will explore in this section:
Liquidity of Gold and Coins:
Quick liquidity is one of the key advantages of investing in gold and coins, but the liquidity of each can vary depending on its type and market conditions. For example, second-hand gold is usually liquidated faster due to higher demand. Coins, due to the absence of additional costs like manufacturing fees and taxes, are often liquidated faster in the market and are considered a good investment option.
However, the most liquid form of investment in gold is using a gold-backed account like the Karizma Card. By transferring funds to this account, your money will be invested in gold bullion. Investing in a gold-backed account and withdrawing funds from it has no time limitations. Therefore, you can invest in gold or liquidate your investment at any time, even on holidays, 24 hours a day.
How much is the manufacturing cost of a gold bar?
Gold and Coin Storage:
Physically storing gold and coins can be challenging due to their high value and potential risks. Security-related costs, such as purchasing a safe or paying for storage in a vault, may be higher. However, with advancements in technology, digital options like gold-backed certificates, digital currencies backed by gold, and gold investment funds (ETFs) have reduced the issues related to physical storage. Investors can continue their investments without worrying about physical security.
Growth Potential of Gold and Coins:
The growth potential of gold and coins is influenced by various factors, such as government policies, interest rates, and the overall economic situation. Historically, coins might have more growth potential than gold in the long run. However, predicting price trends can be complex due to government interventions and economic conditions.
Price Bubble:
Sometimes, the coin market experiences a price bubble due to high demand, while gold, due to its direct connection with global markets and international prices, tends to have less of a price bubble.
What should I pay attention to when buying coins?
Although buying coins generally carries less risk due to their high intrinsic value and government backing, there are still some important points to consider when purchasing coins.
Be sure to buy vacuum-sealed coins sold by banks. Another reliable option is purchasing from reputable stores. Coins are divided into two categories: bank coins and non-bank coins. Non-bank coins are counterfeit, and their engravings are asymmetrical in appearance. The purity of gold coins is 900. Keep this number in mind when determining the purity. Check the fluctuations in the price of coins before purchasing. In some cases, buying second-hand gold might be a better option for you during that period.
Ultimately, should I buy gold or coins for investment?
There are various ways to invest in gold, and sometimes choosing between them can be difficult. People often ask whether they should invest in gold or coins. It is generally advised that when making a decision between investing in gold or coins, one should carefully consider the advantages and disadvantages of each option. Both gold and coins, as safe and high-return assets, have their unique features, and the right choice depends on individual financial goals and conditions.
Gold, especially in the form of bars or melted gold, can be a suitable option for long-term investment due to lower additional costs (such as manufacturing fees and taxes). Gold bars with high purity and established standards, as well as melted gold due to the absence of manufacturing fees and taxes, are attractive options for those looking to reduce costs and increase the purity of their gold. However, the physical storage of this type of gold can be challenging and may require more expertise and caution.
Coins, including the Bahar Azadi coin, are popular due to their high demand and quick liquidity, particularly for short-term investment. Coins experience greater price fluctuations compared to gold and may face price bubbles, which requires careful monitoring and market awareness.
Additionally, alternative investments such as gold funds and commodity certificates for gold coins can be suitable options for those looking to reduce the risks associated with physical storage. These methods allow for investment in gold and coins without the need for physical storage, providing greater security.
Ultimately, the decision between gold and coins should be based on a thorough analysis of personal needs, investment time horizons, and the economic market situation to achieve the best result in preserving and increasing the value of your investment.
Second-hand gold or coins:
Final words:
In this article on the Zarrin Gold website, we discussed the differences between buying gold or coins, but the choice between these options depends on your investment goals and the amount of capital you have. Many people consider buying melted gold a better investment option because it has no manufacturing fee, and the seller receives less profit from the buyer.
Additionally, selling melted gold is easier than selling coins, and investors can buy and sell melted gold in smaller quantities. Ultimately, a key point that investors must consider is that the possibility of fraud and scams in this investment method is quite high. Therefore, it is important to pay attention and exercise caution when buying gold.
Which is better, melted gold or coins? – Is it better to buy gold bars or melted gold? – Should we buy gold bars or coins? – For investment, is it better to buy gold or coins? – Is a quarter coin better than gold? – Which type of coin is better for investment? – Is a Parsian coin or broken gold better? – Should we buy gold without manufacturing fees or coins?
