Are 1-ounce gold bars worth investing in as prices rise?

Gold has been a sought-after investment for many decades but there has been an uptick in interest in investing in this precious metal over the past few years, which was largely driven by the economic challenges that were looming. With inflation remaining high throughout much of 2022 and 2023, investors scrambled to find safe havens for their money, with many turning to gold for its inflation-hedging properties. That, coupled with concerns over the high-rate environment and the ongoing geopolitical tensions, led to a surge in the demand for gold.

And while there are various forms of gold investments to consider, including gold exchange-traded funds (ETFs), gold coins and gold mining stocks, one that has gained considerable traction over the last year is 1-ounce gold bars. One major reason for this is accessibility. Major retailers like Costco started offering 1-ounce gold bars for sale, making it easier for everyday consumers to invest in physical gold. And with a low price point relative to larger gold bars, 1-ounce gold bars offer an affordable way for people to directly own tangible gold. 

But the price of gold has also been climbing, hitting numerous milestones so far this year. That has led the price of physical gold bars to increase in tandem. That, in turn, raises the question of whether 1-ounce gold bars are still worth investing in as prices climb.

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Are 1-ounce gold bars worth investing in with gold prices climbing?

In general, yes, 1-ounce gold bars can still be a worthwhile investment even as gold prices climb — and there are a few specific attributes of these bars that make them particularly appealing in a high-price environment.

One is that as gold prices increase, larger gold bars become increasingly expensive and out of reach for many investors. By opting for 1-ounce bars instead, investors get an accessible entry point into the gold market, allowing them to participate without committing to a substantial upfront investment. This is especially attractive when gold prices are high, as the lower price point enables investors to start small and gradually build their position.

The compact nature of 1-ounce bars allows investors to have precise control over the amount of gold in their portfolios. With these smaller bars, investors can fine-tune their gold allocation more easily than they could with larger bars, which is crucial in a high-price environment where every ounce represents a significant value.

When gold prices are elevated, 1-ounce bars also offer superior liquidity compared to larger bars. They're easier to sell in smaller quantities, allowing investors to capitalize on price spikes or address cash needs without liquidating a large portion of their gold holdings.

With 1-ounce bars, investors also have the option to spread their gold investments across multiple pieces. This diversification can be advantageous if there's a need to sell gradually over time, especially in a rising price environment where timing can significantly impact returns.

And while smaller gold pieces typically carry a higher premium over the spot price compared to larger bars, 1-ounce bars strike a balance. These bars usually have a lower premium than coins or fractional-ounce bars, yet are more affordable than larger bars, making them cost-effective in a high-price market.

There are other benefits to consider, too. For example, in a rising market, smaller denominations like 1-ounce bars can sometimes appreciate faster in percentage terms than larger bars. This is because the market for smaller bars can be more dynamic, potentially offering better short-term opportunities in a bullish gold environment.

Storing and handling large amounts of physical gold can also be challenging and costly — but investing in 1-ounce gold removes some of those hurdles. These bars are easier to store securely at home or in a safe deposit box, reducing storage costs, which can be a significant factor when gold prices are elevated.

That said, there are downsides, and potential investors should be aware of the risks of buying at higher price points. While gold is traditionally seen as a long-term investment, buying 1-ounce bars at their peak may reduce the immediate returns one can expect. So, investors should time their entry carefully, keeping in mind that gold prices can be volatile and driven by global events that may not always be predictable. 

Ultimately, if you're looking to hold onto gold for a long-term hedge against inflation or economic downturns, then 1-ounce bars remain a solid option. For those looking for quick gains, however, the rising price could pose a challenge.

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The bottom line

When it comes to gold investing, 1-ounce gold bars are a valuable investment option to consider despite rising prices, especially for those seeking direct ownership of gold without a hefty upfront cost. The liquidity, accessibility and tangible nature of these bars make them a choice worth considering amid climbing gold prices. That said, potential investors may also want to consider the other gold assets available to them, which could offer unique advantages depending on investment goals and market conditions. After all, as with any investment, understanding your options is often the key to making the right decision for your portfolio.