How much is a gold bar worth?

Libra with gold in Wiesbaden - online coin shop

There is hardly a better visual product for a “lot of money” than a gold bar.

Whether in the movie “The Great Train Robbery” or in “The Italian Job” – in Hollywood, the yellow metal bars are very popular to visually represent a certain wealth. Gold bars are immediately recognizable to everyone. Although most films play with their dimensions and values, there is a reason why they are so popular among collectors and lovers of gold.

Everyone, whether a connoisseur or a beginner, knows that a gold bar is worth a lot of money. But how much is “a lot”?

Spot price and markup

Gold bullion, just like many other commodities, is traded on the world’s financial markets. They have a price that can vary from second to second. Every minute, millions of dollars are turned over with investors making bets on which direction and how the price of gold or gold bullion will move.

The fundamental measure of the gold price is the so-called“spot price“. This is the immediate price for which gold in its purest form trades on the financial market without a premium. Strictly speaking, this is the value of the metal by weight.

The price of gold is set by the London Spot Fix, a daily price per ounce established by bidding among the five member banks of the London Gold Pool. The call takes place twice a day at 10:30 am and 3:00 pm. Here, each bank has the opportunity to bid the amount it would be willing to pay for an ounce of gold. This bidding continues until the prices diverge within a pre-determined threshold.

Since the markets fluctuate a lot, the price of gold will still change throughout the day. This means that the price of gold can never be completely fixed; it moves with the world markets, so to speak. The price of gold is also often used as a hedge against inflation or uncertainty.

The spot price is only a part of the price of the market. Whenever gold is sold, there is a markup on the cost. This consists of both the cost of production and the collector value that the gold may have. Unlike coins, bars do not have a collector’s premium, so it can be said that their value is much closer to that of the actual spot price.

Bar size

The size of a gold bar has some influence on the price it sells for. The rule is: the larger the gold bar, the lower the premium. Large bars (for example, weighing 1 kg) have a lower markup than smaller bars weighing one gram or one ounce. On the other hand, larger bars are both much more expensive and much less movable than a small bar.

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