All that glitters is not gold but when it is, how much does it weigh? In particular, how much does a bar of gold weigh? That’s something to think about if you’re stocking up on it at home. There might come a day when you have to grab it up and take it with you.
Once upon a time, real money meant gold. If you’ve watched any old westerns, you might recall scenes where a man would pan a few decent nuggets and then head to town. He could walk into a saloon and get a bottle of good whiskey for a pea size of the ore. That’s because gold was money back then.
Gold continued to be money until the Great Depression shook the entire world’s economies. Back then, paper money was based on a gold standard. When people hoarded gold to have some savings, the government ordered all of it to be turned in for an equal amount of printed bills. Since our paper money was on a gold standard, all that hoarding of the gold put our currency situation off balance. Bringing the gold back into the banks put value back into the nation’s economy so it could continue to limp along.
People didn’t like it, of course, and there are still memories of it today. Often, when people trying to sell gold for an investment, they steer people to a usually more costly form saying it is the best kind to have to keep the government from ever confiscating it again. There is no need for the government to ever do that, of course, because our currency was taken off the gold standard in 1971.
Building a Hedge
Investors buy gold for protection of their assets, as a hedge against inflation. The theory is that when the stock market goes down and real estate slides, gold will always rebound. In the wake of the 2008 financial crisis, gold moved from about $875 in September 2008 to breach $1,800 by tAugust 2011.
There is a long standing analogy about gold and the price of a quality men’s suit. It goes something like this: “An ounce of gold will buy a good suit; always has, always will.”
Believe it or not, that’s absolutely true, or at least it has been throughout history up to now. In 1967, a quality men’s suit cost $35. In 1967, the price of gold was around $35 per ounce.
Let’s say that in 1967, funds were lacking but you decided to save up $4 a year so you could buy that $35 suit in 1975. When you bring out your $36 in 1975, those very same dollars will not buy you a fine suit.
In 1975, a quality men’s suit cost $100. An ounce of gold in 1975 was valued at around $100, too. So now you see that gold has held its buying power, its true value, over those 9 years while the dollar has lost most of its value in the same period of time. That’s the first principle – gold holds its value while fiat currency does not.
Now we will look at gold’s performance vs. the good men’s suit to the present day:
- In 2009, the suit cost $950; gold was around $950 per ounce.
- In 2011, there was a discrepancy, but it came in gold’s favor. A Brooks Brothers 1818 suit cost $1,098 in 2011 while an ounce of gold soared to over $1,800 by the end of August of that year. That imbalance was due to a temporary surge in the gold price following an economic panic.
- Today, the very date of this article, gold is hanging around $1,350 and the top of the line Brooks Brothers 1818 men’s suit is listed at $1,298.
And that is the gold:suit ratio. An ounce of gold will always, at the very least, buy a good man’s suit, making it a relatively safe hedge against inflation. Stocks go up and down. Real estate rises and falls. Fiat currency can be manipulated. Gold is gold, always.
How to Get Gold
When it comes to investing in gold, there are generally two ways to do it. You can invest in a mining company, buy it to be stored elsewhere, and buy it taking physical possession.
The mining company investment will pay you the dividends any stockholder receives from any company in which they hold stocks when a profit is made. You are investing in the mining of gold but not owning any at all.
Another way of owning gold is to buy it and have someone else store it. You might be told that this is better because no one can steal it from you. It might be done that way because the government requires it, too.
As you know, the money in our Independent Retirement Accounts (IRA) is meant to be used after we turn 65 years old. So that we are encouraged to save for retirement, the Internal Revenue Service (IRS) allows us to defer taxes on those funds until they are drawn out in our golden years, when our tax rate is likely to be lower. If we take it out earlier, we have to pay a significant tax penalty if we fail to return the funds to an IRA account within a given period of time. This bit of time is permitted so that people can move their IRA from one service to another without being fined.
When someone invests in a “Gold IRA,” the money is invested in physical gold that is stored under your name in an IRS approved depository. That is the government’s way of making sure we cannot sneak some out, sell it, use it for a grand vacation, and then put it back later than allowed without incurring that tax penalty. You will never touch the gold in your Gold IRA. When it is time to receive funds in retirement, the custodian of the gold will sell it and send you a check or wire transfer.
The way most of us think of owning gold is to have it in our hands, stored in a safe, buried in the back yard, or sewn into the box springs of our mattress. This is when we might get a little concerned about how much it is going to weigh.
Gold for physical holding comes in many forms. The most common form is coins, which range in weight (value) from one-tenth to a full ounce. The smallest ones allow people to buy gold on a periodic basis rather than forcing them to save up for a full ounce.
The same is true of gold bars. The smallest is one gram of gold. A gram of gold will fill less than a quarter teaspoon measure. The photo below shows a 5 gram bar to the right, so you can imagine how small a 1 gram bar is.
As you can see in the picture, various sizes of bars are available for purchase. This allows just about anyone to own a little gold, whether you start by collecting 1 gram ingots of .9999 or go for a 1,000 gram mini bar. For reference, the 5 gram ingot in the photo would be worth $250 at today’s spot price. The 1,000 gram mini bar would value out at around $45,000, the 500 gram at half that, and the 250 gram at about $12,000.
When asking what a bar of gold weighs, it sounds pretty easy. A 1,000 gram bar weighs 1,000 bars. It’s not that easy, though. Different bars have different weights, of course, and other metals might be added to make it possible to handle the gold without marring it.
Gold is an extremely soft metal. When we buy a ring for an adult, we will go for 24K gold if we can afford it. We trust an adult to know the value of things and give it care. When buying a ring for a child, however, we might go with 10K or 12K. Those have been mixed with other metals like silver, copper, or nickel, to make the jewelry able to withstand some bumping around without being dented.
The same is true of gold coins. The 1 ounce American Eagle weighs 1.0909 ounces because it contains a full ounce of gold with some copper and silver to harden it. Coins are made this way because they are made like other coins – strong enough for use in the marketplace as legal tender.
This is not true of most investment-grade bars of gold. With rare exceptions, the gold poured into a bar will be .9999 pure. That means your 1,000 gram bar of gold weighs 1,000 pounds.
That is not emphasized as the answer to our question, though, because most people thinking of a bar of gold are probably thinking of the bars held at Fort Knox. Those bars of gold weigh 400 ounces, or 27 pounds, each.
That means that, at today’s spot price, one bar of Fort Knox gold is worth half a million dollars. Only, it’s not. By law, the book value of the government’s gold holdings is set at $42.2222 per ounce. A single gold bar, then, is worth only $16,888.88. That’s quite a deal if you can buy one, but you can’t. It’s not for sale. You can’t even touch it. No one can see it. No tours, ever, are given to Fort Knox for security reasons. No exceptions, ever, except for one unusual excursion in 1974 to answer the question of whether or not the gold is really there. The government allowed 100 journalists and 9 congressmen to tour the facility, and it was caught on tape.
A bar of gold is an investment you can hold in your hands. How much it weighs depends on how much you have to invest. For the most part, I suggest going lightly so that if you ever have to move it, the whole world doesn’t have to know about it. Those Fort Knox bars could be a bit unwieldy. Thanks for reading!