Buying gold is a relatively simple process. The following guideline is the result of our experience helping thousands of investors make their initial gold purchase. Before you start buying gold coins, you will need to know a few important things.
Should you Buy Gold Coins or Bars?
You can buy bullion in two main forms: coins or ingots (bars). The advantage of gold coins over gold bars is that they allow you to be more flexible. After all, it’s easier to sell 20% of your gold if you own ten gold coins rather than if your whole investment is in one gold bar. By the same token, given this flexibility, you’ll probably find that coins are that bit more liquid (easy to sell) than big bars.
The Different Types of Gold Coins
There are two basic types of gold coins: bullion coins and numismatic coins (collector coins).
Gold investors typically acquire gold bullion coins as their prices are very transparent. A bullion coin is a coin that is valued by its weight in a specific precious metal. Gold bullion coins come in sizes starting as small as 1/25 troy ounce, 1/10 troy ounce, one quarter troy ounce, half a troy ounce, one troy ounce and as large as five troy ounce sizes. For the small investor that is not looking to purchase gold that has numismatic value, gold bullion coins issued by a predominant country or respected private entity would be the ideal choice. These include: U.S. Gold Eagles, U.S. Gold Buffaloes, South African Krugerrands, Canadian Gold Maple Leafs and Austrian Philharmonic gold bullion coins. There are variety of sizes that can be purchased for a reasonable premium over the spot price of gold.
The value of a collector or rare coin is based upon the coin’s rarity, demand, condition and mintage. A collector or rare coin may be worth more than its bullion value. Much like fine art, true numismatists ( collector coin experts), are generally lifetime coin collector enthusiasts who have acquired years of specialized knowledge sharpening their trade.
Best Gold Coin for Your Objectives
Choosing the best gold coin for your investing objective will depend upon multiple factors including your geographic location, the importance of privacy when selling gold coin. Match your portfolio choices to your objectives.
Choose the Right Gold Dealer
Your choice of a gold firm can mean the difference between success and failure as a gold owner. Gold coins can be bought in numerous ways, including but not limited to buying on online websites like eBay or online dealers. Some investors buy gold coins locally at coin shops, while in some countries investors can buy gold coins directly from banks.
Always consider any differentiators that some gold coin dealers may have over others. The gold dealer with the lowest price doesn’t necessarily mean it is the best choice.
Investors must take into account the value, not merely the price, of any investment decision.
How Much of Your Portfolio Should You Allocate to Gold Coins?
Decide how much of your overall portfolio should be committed to gold coins and bullion. The old adage still applies: “Put 10% of your money in gold and hope you never need it.”