Buying gold coins has many benefits. The precious metal is considered as a top hedge against inflation. Gold coins can provide sufficient diversification to an investment portfolio. Last but not least, you can posses coins as collection items.
In this article we will discuss how to buy gold coins. Junior investors could find a lot of useful information. Considering the information will provide answers to a number of question.
- Check this out: Investing Crash Course in Commodities, An (Video): Understanding the Markets, the Exchanges, and the Mechanics of the Trade”
To begin with, an investor must know that some countries and private entities produce round-shaped gold bullion, that could be mistaken for gold coin, though it is not. This bullion doesn’t have monetary value and its not a coin. Part of it is real coins, but the price calculation is based on the gold quantity. The purpose of these coins is not for common economic circulation. Such gold “coins” can be found in many shops in Dubai’s gold souq. Their price varies on daily basis in correspondence to the price of gold.
The gold coins come in different sizes. The smallest are 1/25 troy ounce, then 1/10 troy ounce and one quarter troy ounce. There are also bigger in size variations – half a troy ounce, one troy ounce and up to five troy ounce.
One of the best option for physical gold investment is to purchase numismatic valuable coins. For small investors, coins issued by a big country or known private entity would be the perfect start. Good suggestions are U.S. Gold Buffaloes, U.S. Gold Eagles, South African Krugerrands, Canadian Gold Maple Leafs and Austrian Philharmonic gold bullion coins.
In addition, investors can get a reasonable premium over the spot gold price by buying different sized gold coins.
Common US Gold Coins
You can put your money into US gold coins that were minted in 1933 or earlier. Till 1933 gold coins were common used in the US economy. But then President Franklin D. Roosevelt took back all the precious bullion. Many people kept their coins, which have some numismatic value now. Collectors can go for these coins. They are not very expensive considering the content of gold put in.
Modern US Commemorative Gold Coins
The US Mint continued its commemorative coin program back in 1982. Gold coin commemorating the XXIII Olympic Games in Los Angeles was minted. This is first coin being minted in US since 1933. These are not meant for circulation and have a high numismatic premium. Therefore, they have higher value than the common US gold coins.
So you will pay a high premium over the spot price of gold that is contained within the coin. The US Mint still makes commemorative gold coins and you can buy directly from the entity.
Rare US Gold Coins
If you are a complete novice in bullion investing don’t jump ahead of yourself and search for rare gold coins. There are a small number of US coins with very low mintages and high collector’s demand. That’s why this bullion has very high numismatic premiums above the intrinsic value of gold contained within the coin.
Foreign Gold Coins
It is very important that you know what you are purchasing. Gold coins can also turn up some unexpected values. Precious metal coins have been used in worldwide economies for many years. Prices of foreign bullion can vary significantly. Everything depends of the gold content of the coin, available supply and collector’s demand. Good choices are Switzerland 20 Francs, Mexico 2 Pesos, Mexico 50 Pesos, Austria 100 Corona and Britain 5 Pound. A good advice is to find some foreign coins data to learn the current market values and gold content.
When you are ready to make your gold coin investment you should carefully choose the dealer to buy from. To find a good and honest dealer there are five things to look for. These are reputation, experience, size, ethics and guaranty. A good advice is to ask about any restrictions like minimum amounts and accepted forms of payment. Also you should learn when you will take possession of your gold coins.
Nowadays one of the ways to buy gold coins is online. All the good dealers have web sites that are designed to help the investor make a choice. Dealers don’t make money from the one-off sale. They earn from the repeat business coin collector’s trust. Online dealers will do everything possible to support you as their client. That way you have lots of provided information and an easy interface to work with.
Resources for gold investors: