For the first time, gold bars cost a million dollars, should you buy?

Gold bars are million-dollar assets because they usually weigh 400 troy ounces or more. This price increase has been driven by factors such as the massive purchases of gold by central banks and the expectation of laxer U.S. Federal Reserve policies.

The milestone was attained on Friday when the spot price of the precious metal exceeded the record high of $2,500 per troy ounce. As 400 ounces is the average weight of a gold bar, that would make each one valued at over $1 million.

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As per the London Bullion Market Association, bars of gold, which are traded globally, weigh approximately 400 troy ounces, but they can hold up to 350 to 430 ounces of pure gold. More reasonably priced, much smaller bars, like those offered by Costco, are also available for purchase.

Using data from consulting firm Metals Focus, Bloomberg calculated that central banks bought 483.3 tons of gold in net purchases during the first half of this year, or nearly 40,000 bars. It has helped fuel the precious metals' explosive rise so far this year, along with anticipations of more lenient US Federal Reserve monetary policy.

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FAQs

What is the average weight of a gold bar?
Although they can weigh anywhere from 350 to 430 ounces, a typical gold bar weighs approximately 400 troy ounces.

Why is gold now so much more expensive?
Large purchases of gold by central banks and anticipations of more lenient U.S. Federal Reserve monetary policy are the main causes of the price spike.