Gold Rounds

Gold rounds are the less common relative of gold bars. This type of bullion is a hybrid of coins and bars, sharing a few similarities with both. In a nutshell, a gold round is simply pure gold that is formed into the same shape and design of a coin. The difference between a coin and a round is that a round is simply produced by a private mint and is not an actual numismatic coin. For example, a piece of gold commemorating a sports team's championship would be considered a round, whereas an American Gold Eagle is a coin. The difference stems from who produces the coin and for what purpose. An easy way to decipher between a round and a coin is to consider whether or not a particular item could be used as real currency. If you could theoretically make a purchase with your item, then it is a coin. If you can't, it is most likely a round.

Rounds are most ideal for investors, as is the case with bars. This is due to the fact that they are pure bullion, meaning that they are made up of nothing more than their actual gold content. The majority of gold rounds have .999 purity. There is no inherent advantage of buying a round over a bar and it is most often nothing more than simple personal preference.

Types of Gold Rounds

Gold rounds come in a handful of different varieties. The most common gold rounds are produced by mints for mass production as standard bullion. The other type of gold round can be found as a commemorative release. In addition to this, many gold rounds are made to serve as replicas of actual coins. If you ever see a commercial on TV for a gold coin, but the price is very low, the odds are that a gold round is being sold.

There is no reason for the bulk of gold buyers to ever order a commemorative or replica gold round for any price over spot. The reason that these types of coins are made is for the mint to add a mark up to standard rounds and to sell them to the public for their novelty or collectible value. As a result, the only reason to pay over spot for commemorative coins is if you have an interest in collecting the item vs. investing in the gold itself.

Normal gold rounds are produced with the purpose of investing and investing alone. These particular rounds are easy identifiable by their markings, which will frequently mimic those of a bar. A gold bullion round will have the weight, brand, and purity engraved in the round. These are known as investment-grade quality rounds and are the most practical for the majority of buyers. These rounds come in many different sizes and generally follow the same scale as coins, ranging from 1 gram sizes up to 1 ounce. Though there are a few rounds that do weigh over one ounce, there are far and few between.

Buying Gold Rounds

As a speculator and investor in gold and precious metals, the most optimal type of round to buy is undoubtedly a standard piece of bullion. Not only will the actual gold content be more significant, but it will also come at a lower cost. The average price for most gold rounds is just a few dollars over spot. When you compare the total costs for a coin vs. a round, you will find that you are going to save a lot of money in the long run. With coins, much of their value is derived from the secondary collectible market in addition to the gold markets themselves. With rounds, spot price is the only real variable in play.

As mentioned earlier, commercial outlets are the worst place to buy gold rounds before. They will almost include a markup that will negate much of the value that any round has. If you pay $50 extra for a round, you might as well go ahead and buy a coin instead. The long term valuation difference between a round and a coin is that a round most often has short-term value to the immediate consumer, whereas a coin has value that can actually increase. Commemorative gold rounds are usually minted with the intent of selling to a very targeted audience and for a short period of time. When that demographic loses interest and/or the event or person commemorated on the round is no longer of public interest, the round will be reduced to the value of the gold alone. If you buy a gold round that illustrates a presidential induction, the coin will be popular for a few months after the induction, but in all likelihood it will be largely worthless in a year's time.

In the end, gold rounds are just another way to invest in gold, but there are more things to look out for. You will be hard pressed to find gold bars that have very big mark ups, where it is standard with gold rounds. So long as you are buying pure gold rounds for a price similar to what you would pay for a bar of equal weight, you can be assured that you are getting a reasonable deal. Whatever you do, though, don't fall into the trap of overpaying for a round simply because it has a special design or limited release. These qualities are short lived and will cost you a lot of money in the long run. By regular bullion rounds produced by reputable mints and you will have nothing to worry about.