How To Buy Gold Coins
| by Michael Locklear
Knowing how to diversify your investment portfolio by purchasing gold coins can be both an emotional and financially rewarding experience. Although the process can be complex and confusing, in the end it can be quite simple if you follow some basic proven guidelines. There is a wide variety of options available to you should you decide that gold coins are a desirable investment for you.
Generally when people think about gold they big picture stacks of huge gold bars stored in underground vaults. The fact is gold available to investors come in wide variety of forms including gold rounds commonly known as coins.
What Are Gold Bullion Coins?
The United States, Canada, Australia, and South Africa are among the major nations that mint investment grade Gold Bullion Coins. Coins are also produced by certain private entities. Although gold coins do have a face value they do not carry a fixed monetary value like other coins; their value is instead based on their weight and the current spot price for gold on the market on any given day.
There are a wide variety of sizes available for gold bullion coins. They range from sizes as small as 1/25 troy ounce through a range including 1/10 troy ounce, one quarter troy ounce, one half troy ounce, one troy ounce, and some as large as five troy ounces. There have even been gold coins that are produced that weigh as much as one troy ton.
Gold bullion coins issued by highly respected private entities and major national governments are the safest and best options for gold investors. Among these coins are the American Gold Eagle, the American Gold Buffalo, the Canadian Gold Maple Leafs, the Australian Philharmonic, and the South African Krugerrand. All of these coins are available in various denominations and carry an average of 4% premium over the gold spot price at the time of purchase. These are among the most highly respected and valued gold bullion coins because of their recognized high quality and guaranteed purity.
Buying Common US Gold Coins
Another method used by investors who are interested in acquiring an equally valued form of gold bullion coins is the purchasing of what is known as Common U. S. Gold Coins. These are coins that were minted by the United States government in 1933 and for some time before. Gold coins were freely circulated and used as currency in the United States until in 1933 then President Franklin Delano Roosevelt ordered that all coins, other than those of any numismatic value, be recalled.
These coins however can still be purchased today through coin collectors due to the fact that not everyone turned in their coins at a time of the government recall. Generally they can be purchased, based on the spot price of gold, for their actual gold content. Among these coins is the $20 Liberty, a gold coin that was minted in Philadelphia in 1879. The weight of the coin was 0.9675 troy ounces. As you can see this particular coin would be highly valuable in today’s environment where the spot price of gold is over $1700. Of course the price for this coin would also reflect an additional premium price which could be as high as 7%.
Common US Gold Coins were circulated with a face value of varying denominations including $1, $2.50, $3, $5, $10 and $20. A commemorative Gold Coin Program was initiated by the United States Mint in 1982. The Los Angeles Mint issued a coin in commemoration of the Olympic Games held in that city in 1984. This gold coin has the distinction of being the first one minted after the 1933 government recall. Unlike previous gold coins minted by United States Government, these coins are prized for their high numismatic value and carry a corresponding purchase premium. So if you decide to purchase one of these types of coins you can expect to pay well above the normal premium over the gold spot price for the gold contained in the coin. As this program continues you can purchased your coins directly from the United States Mint if you so desire.
Buying Foreign Gold Coins
Foreign governments have also minted and circulated numerous in the past. Based on their availability and demand from collectors as well as the gold content of the coin there can be a considerable variance in prices. Some of these coins include the 100 Corona from Austria, the British 5 pound coin, the fr.20 coin from Switzerland, the Canadian Gold Maple Leafs, the Australian Philharmonic, and the South African Krugerrand, as well as Mexican pesos of 2 pesos and 50 pesos. It is best to consult an expert before purchasing these coins as there are many variants, market values, and gold contents.
Buying Rare Gold Coins
There is yet another category of Gold Bullion Coins that are of interest to experienced investors. However, if you are a novice you should be extremely cautious about entering this market. There are numerous U. S. Gold Coins that were minted in relatively low quantities and are highly sought after by collectors. These coins will demand the highest possible premiums and as a result will need to be held for quite some time in order to accumulate a profit. One such coin minted in New Orleans in 1879 known as the $20 Liberty gold coin. The market value of this coin, even in average condition can exceed $23,000 although it is of the same weight (0.9675 troy ounce) as the coin minted in Philadelphia.
Where To Buy Gold Coins
If this is an avenue of investment that you are seeking out than the last thing you need to be concerned with is which coin dealer to buy from. There are several things that you need to know about the dealer in order to ensure that you are dealing with the right person. You should choose a dealer who has an outstanding reputation for their ethical practices, long years of experience and expertise, and large enough to accommodate your needs. Coin dealers who are members of the American Numismatic Association might be a good place to start looking. You should also know if your dealer has regulations concerning minimum purchasing requirements and what forms of payment are accepted and of course when your coins will come into your possession.
As always when entering into any market investment is important to do your own research and to consult with experts before making any decisions or purchases. Being knowledgeable and following sensible guidelines will ensure that you have the best possible experience and achieve the greatest possible profit.