Can gold bars lose their value?

Gold prices have been on an impressive uphill climb over the last year, and have seen major gains over the past few months, in particular, fueled by a mix of persistent inflation, central bank accumulation and a widespread appetite for safe-haven assets. As a result, the price of gold is now approaching $5,300 an ounce, a level that would have seemed absurd even to seasoned commodities traders just a few years ago. 

And, physical gold bars, which were once a niche holding, have now become a mainstream play for investors at nearly every level. In today’s economic environment, gold bars can feel like a rare source of stability. Not only are these gold assets tangible, but they are easy to access and can be used to diversify an investment portfolio and protect against market volatility.

But no investment is fully immune to risk. Even an asset as historically resilient as gold has its vulnerabilities to consider before you buy in. Can gold bars actually lose their value, though? That’s what we’ll examine below.

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Can gold bars lose their value?

The short answer is yes, gold bars can lose their value, though not in the way most people expect. Gold bars don’t rust, corrode or expire. The metal itself retains its physical properties indefinitely. But gold value isn’t the same thing as physical integrity — and that distinction matters when you’re deciding whether to buy.

Gold is priced in U.S. dollars on the global spot market, which means that its value is inherently tied to currency dynamics. When the dollar strengthens significantly, gold typically falls in price — not because gold changed, but because the denominator did. So, anyone who bought gold bars near a price peak but sells during a dollar rally will almost certainly take a loss on paper.

Then there’s the premium problem. When you buy a gold bar from a precious metal dealer, you’re paying above the spot price for the dealer’s premiums, which can vary depending on the bar’s size and the mint (as well as other factors). That means gold’s spot price needs to climb just for you to break even, let alone profit, on your gold bar purchases. And, if you bought during a period of high premiums and the market cools, you’re underwater before the price even moves against you.

Storage and insurance costs compound the issue over time. Unlike gold stocks or gold ETFs, physical gold requires somewhere safe to live, whether that’s a home safe, a bank vault or a third-party depository. Those ongoing costs quietly erode returns in ways that don’t show up in a simple price chart.

And liquidity matters more than people realize, too. In a genuine financial crisis, which is the exact scenario many gold buyers are often preparing for, selling physical bars quickly and at a fair price can be harder than anticipated. Dealers widen their spreads, buyers get cautious and the theoretical value of what you’re holding doesn’t always translate into cash in hand.

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How to invest in gold bars strategically

If you’re considering gold bars — especially with prices elevated — and want to ensure that you’re making strategic moves with your money, be sure to consider the following:

Choose the right size

There are numerous gold bar weights and sizes to choose from, but 1-ounce gold bars tend to strike a balance between lower premiums and reasonable liquidity. Very large bars may offer cost efficiency per ounce, but can also reduce flexibility if you need to sell only part of your holdings.

Compare dealer pricing carefully

Gold bar premiums can vary meaningfully between dealers. When using gold investing platforms or marketplaces, compare:

• Buy price versus spot
• Buyback policy
• Storage fees (if applicable)
• Insurance coverage

Even small differences in premiums can significantly affect the returns on your gold bars, especially in a high-price environment.

Consider storage and security

Physical gold requires secure storage. Some investors use home safes, while others prefer third-party depositories that offer insured storage. Gold storage costs slightly reduce your effective return, so factor those into your decision.

Align gold with your purpose

Are you buying gold bars for long-term wealth preservation? Inflation hedging? Retirement diversification? A short-term trade? Your answer should guide how much you buy and how long you plan to hold it.

The bottom line

Gold prices are high right now, but that doesn’t mean gold bars are immune to price swings. These physical gold assets can still lose value in the short term, especially when economic conditions shift or investor sentiment changes. So, buying at a market high and selling during a downturn can lead to losses.

However, gold’s underlying characteristics — including the scarcity, durability and global demand — have historically helped it retain purchasing power over long periods. So, rather than focus on whether gold bars can fluctuate in value, it could benefit you to weigh whether they fit your financial strategy, risk tolerance and time horizon, which will help ensure that you’re making the best decision for your portfolio.