Ingots, bars and plates
Published on May 25, 2011
What’s the difference between Ingots, Bars and Plates and why should you know?
Is it just “bullion jargon” or is there a way that you can use the difference for your profitable advantage?
The answer lies in the manufacturing process and yes it can make your gold, silver and PGM purchases more efficient.
As you know only Gold, Silver and Copper can be found in their raw metallic state – but they all need a measure of refining. So when say, gold, has been refined to a recognised purity it is poured into moulds and formed into Ingots. This is by the far the cheapest way of buying gold – if you can afford a whole bar. Technically, a bar and an ingot are the same thing but to be pedantic, a bar has a more ‘finished’ element to it and an ingot is more in the raw state.
The 1Kg bar is the most common sized bar that we handle. Forget the bullion bars from “The Italian Job” because they weigh 400 troy ounces – about 12.5 kilo’s – and I doubt if you’ll ever see one. I’ve been in this business for years and i’ve heard stories about them but that’s about it!
Small jewellery operations love the 1KG because they can easily snip a bit off the end. It is also a manageable size and weight with an incredible value. Buying this way means more profit for them.
A plate is the next stage of processing and as it is an additional process it incurs an additional cost. Think back to when your mum used to roll out pastry and then use a cutter – it’s pretty much the same thing with gold. The gold is rolled out and the plates are then cut out. Voila – gold plates. The American slang for these is 'biscuits' which is accurate to me an an Englishman but the Americans don't use the word 'biscuit'in this context.
The next stage is to ensure their quality and that is by an assay process.
Jewellery takes the manufacturing process even further, turning our beloved gold into rings, chains and other fancy goods. And just like before, every process incurs an extra cost. Obviously, if it’s a piece from a good manufacturer which is rather special then you will probably retain the premium but this is quite often not the case.
This process is true for all precious metals – Silver, Gold, Platinum, Palladium et al - its just the way it’s made.
So, the way to get the most gold for your money is to buy it as an ingot. Then it’s plates and then jewellery.
Happy investing!
David Peers
Partner
