What is the purest gold bar in the world? A deep dive into 999.9 fine gold

The purest gold bar produced in commercial quantities is 999.9 fine, meaning its gold content purity is 99.99%. Using the millesimal fineness measurement, this six nines gold sets the definitive global standard for gold purity thanks to its introduction by the Perth Mint of Australia in 1957.

Prior to 1957, the record for gold fineness in a commercial bar belonged to the Royal Canadian Mint at 999.75 purity. But the Perth Mint shattered this by releasing a 10 ounce gold bar refined to 999.9 – achieving 99.99% pure gold content.

The pioneering of 999.9 gold purity

The production of the first 999.9 fine gold bar was an incredible achievement in metallurgy. Gold naturally forms in an alloy with silver and other metals. Attaining higher purity requires advanced refining techniques to separate out these other elements.

Prior to 1957, many doubted whether 99.99% pure gold was even practically possible to produce in commercial bar form. That‘s because as gold content increases, the metal becomes softer and more difficult to process.

But over 3 years, the Perth Mint‘s metallurgists developed new electrolytic techniques to successfully refine a 10 ounce test bar to 999.9 fineness. This set a new benchmark that shocked the gold industry worldwide.

Once it was proven possible, other major mints including the Royal Mint, the Rand Refinery, and Johnson Matthey adopted six nines gold as the new de facto standard of excellence. Major gold bar brands today like PAMP Suisse and Valcambi also use 999.9 fineness.

Why purity matters for gold bars

The reason 999.9 gold is so prized is it provides the maximum purity possible for large commercial bars. This gives investors confidence that six nines gold contains almost entirely pure gold content.

Lower purity bars have higher percentages of other metals like copper and silver alloyed with the gold. While this makes the bars more durable for handling, it also lowers the intrinsic gold value.

Four nines (99.99%) gold is generally set as the minimum purity standard for investment grade gold bars and coins. Anything less has too much base metal impurity to qualify as near-pure bullion.

So 999.9 fine represents the pinnacle of gold purity – the closest to 100% pure gold achievable at commercial production scales. This makes six nines gold bars highly trusted and liquid assets.

Leading gold refining hubs

Switzerland has the largest gold refining capacity in the world at around 70-80%. Major Swiss brands like PAMP, Valcambi, Argor-Heraeus, and Metalor together account for roughly 50% of worldwide production of gold bars and other bullion products.

Other key gold refining hubs include:

• United States – Home to major refiners like the US Mint, Asahi, and RMC. The US is the #4 gold producing nation.

• Germany – A major European refining hub with brands including Heraeus, Heimerle + Meule, and Aurubis.

• China – The top gold producing nation. SGE and other Chinese refineries are increasing their bullion output.

• Australia – The Perth Mint pioneered 999.9 gold. The Royal Australian Mint is another key player.

Current gold production and reserves

According to the US Geological Survey, around 3,200 metric tons of gold were mined globally in 2020. The countries with the largest gold production are:

In addition to mining output, the amount of gold held in central bank reserves is another important factor for the gold market. The World Gold Council estimates around 35,000 tonnes of gold are held globally as foreign reserves.

The central banks with the largest gold reserves are:

So while China produces the most new gold annually, the United States holds the world‘s largest strategic stockpile of gold as a reserve asset.

Premiums, spot price, and physical delivery

The price of physical gold bars is based on the live spot price plus a small premium. The spot price for gold is determined by ongoing futures contracts trading on exchanges like COMEX.

The spot price represents the current bid/ask midpoint if buying or selling gold in USD immediately. Because futures contracts require physical delivery, the spot and futures prices tend to converge at expiry.

When you purchase gold bars, dealers will charge a premium above the prevailing spot price to cover their costs and make a profit. This premium can range from 0.5% to 5% and also fluctuates based on market factors.

For retail investors, popular gold bar sizes like 1 oz may have premiums around 4-6%. But large wholesale orders can access premiums under 1% as their volume helps minimize the dealer‘s unit costs.

Pricing factors: inflation, money supply, and demand

In the long run, the price of gold tends to track the rate of inflation. So if inflation rises, gold will appreciate to retain its real purchasing power. But because gold can swing wildly, its price versus inflation disconnects in the short term.

Another key factor is expansion of the money supply via central bank stimulus. Devaluing fiat currencies can drive investors to buy more gold as an alternative money. So increased money printing often inflates demand for gold bars and coins.

In the short term, the biggest driver of gold price swings is changing demand among speculators and institutional investors. When economic uncertainty or financial turmoil hits, gold demand typically rises as investors seek safe havens.

Coins vs bars – deciding what‘s best for you

For retail investors, gold bars offer the lowest premiums at higher weights. But some prefer coins since they come in fixed weights, have legal tender status, and may carry collectible value.

The best selection depends on your budget and objectives. Those with smaller amounts to invest may prefer gold coins in fractions of ounces. Investors able to buy in kilos can access lower premiums through bars.

Coins do come with higher manufacturing costs due to their intricate designs compared to plain bars. This makes coins more expensive in percentage terms when buying small quantities. But since coins have fixed face values, they can provide more options for selling exact amounts.

For most individual investors though, gold bars will provide better value overall thanks to their substantially lower premiums per ounce on larger sizes.

Security features of gold bars

Reputable gold bars from producers like PAMP Suisse or the Royal Canadian Mint contain special security features that confirm authenticity:

• Assay markings – Stamp of refiner logo certifying exact gold purity and weight

• Serial number – Unique ID number laser engraved into the bar

• Sealed certificate – Refiner certificate listing bar information

• Micro-etching – Fine lines laser-etched onto the bar surface

Verification steps like micro-etching and marking individual serial numbers into each bar help guard against counterfeiting and fraud. This provides assurance to investors of the bar‘s authenticity and chain of integrity.

Insider advice on buying gold bars

When looking to invest in physical gold bars, I recommend keeping the following best practices in mind:

• Stick with well-known brands like PAMP, Royal Canadian Mint, Perth Mint, Credit Suisse to ensure authenticity and liquidity

• Only buy new bars sealed in assay packaging from accredited dealers, never used or loose bars

• Compare pricing across dealers and calculate the premium over spot

• Ask about shipping, storage and insurance costs – factor this into pricing

• For security, take delivery of bars rather than storing in a vault or depositing in an account

• Research outside verification programs like LBMA good delivery to confirm refiner quality

• Consider airport storage lockers for secure holding if your home storage exceeds insurance limits

By following these tips as an insider gold analyst, you can invest in gold bars with greater confidence and peace of mind. Please reach out if you need any guidance! I‘m always happy to share my expertise with fellow precious metals enthusiasts.