Deciding which investments to purchase can be challenging. There are thousands of stocks, bonds, mutual funds and other investment options that you may be comparing and thinking about investing in. You must consider everything from the risk and cost the return and even how you will transfer the assets to your heirs after your passing. Investing in gold coins is one of the most traditional options available, and investors have been collecting coins for thousands of years. After exploring this investment option in greater detail, you may be able to determine if investing in gold coins is a smart idea for you.
Why Invest in Gold Coins
There are many ways to invest in gold, and collecting bars and coins is one of the most common and traditional options. Other types of gold investments that you can consider include buying stock in a gold mining company or buying gold ETF shares.
Many people prefer investing in gold coins because they are a tangible asset that they can collect, store and even give to relatives. Coins are often preferable over bars or bullion because of their relative affordability and their size.
Gold prices have historically trended upward over many centuries, and this precious metal has been an excellent hedge against inflation in even rigorous market conditions.
Furthermore, many people find it more satisfying to invest in gold coins because they are a collector’s item that can be displayed. There may be greater satisfaction in collecting coins as opposed to buying a CD or a few shares of a stock.
What Gold Coins to Invest In
If you are thinking about investing in gold coins, you may be wondering which coins are a smart investment.
1. The American Eagle, one-ounce
The American Eagle one-ounce gold coin is a popular for many investors. It is easily located as well as easily traded when liquidation is desired. While these have a $50 value, they may be worth more than twice that amount.
2. American Buffalo, one-ounce
Another option to consider is the American Buffalo one-ounce gold coin. Originally minted in 2006, it is one of the newer coins that investors and collectors are drawn to.
This coin is a troy ounce of pure gold, making it rather unique. It may be more susceptible to showing damage than the American Eagle, but it has rough edges for a rustic look. This natural roughness may conceal some of the damage these coins may endure.
3. Canadian Maple Leaf, one-ounce
The Canadian Maple Leaf one-ounce coin is another option to consider. These coins have been in circulation since 1979, but new sales have declined recently. The value is $38 over the spot price of $50.
However, the 25th anniversary edition and the fractional proof set issued in 2015 are significantly more valuable.
How Much Are Gold Coins Worth?
There are numerous factors that affect the value of gold coins. The purity of the gold, the age of the coin, the presence of a mint marking, the preservation of the coin’s markings and the number of other coins in circulation all affect the value of a gold coin.
You may research the price for an ounce of gold online, but keep in mind that the value for coins can vary substantially based on these factors. Therefore, the price for an ounce of gold may be significantly lower than the price for an ounce of high-quality, rare gold coins.
For example, a $2.50 Liberty Coin minted between 1840 and 1907 may be worth approximately $250 to $350. A Saint-Gaudens Twenty Dollar Gold Coin minted between 1907 and 1933 is worth up to $1,322.
A gold coin may have once been used as currency. However, this is not a liquid asset now because it generally is not used as currency. For example, you cannot go to the store and pay with your purchase with a gold coin.
You must first turn the gold coin into cash before you can use the value to make a purchase. However, you can sell gold coins to another investor, a coin collector or another source to obtain cash for coins.
With this in mind, gold coins are a great asset, but you may need to do some work to convert them to cash when desired. Furthermore, this can make it difficult to track the value of a coin collection at any given time.
If you have decided to invest in gold coins, it is important to research the options available. Focus on factors such as rarity and availability.
Remember that rare coins may cost more money to purchase. However, they also may increase in value at a faster rate than common coins or coins that are in frequent circulation.
If you decide that investing in gold coins is right for you, make plans to protect your investment by storing your coins in a safe, secure location. For example, you may use collectors’ sheets or boxes to preserve the coins.
Gold is a rather soft metal, and fingerprints on the surface can decrease the value of the coins over time. You should avoid handling the coins frequently. Because theft is a concern, you may want to insure your investment and store the coins in a locked safe or in a safe deposit box.
You should also compare prices from different sources for the same coins. Remember that the people or companies you are buying the coins from often want to make their own sizable return. With this in mind, coin prices can vary dramatically from seller to seller.
Are Gold Coins a Good Investment?
Investing in gold coins is a smart idea for many reasons, but there are also drawbacks for this investment type. If you are thinking about investing in gold coins, spend time learning about the pros and cons of gold coins before your purchase.
Gold coins have historically increased in value over time, and they have proven to be an excellent hedge against inflation.
The value of gold coins varies by numerous factors. This means that there are coins suitable for almost every investor’s budget.
Gold coins are relatively small yet valuable. You can potentially amass a huge pile of gold coins worth a small fortune without using a lot of space.
Gold coins can easily be gifted and passed down to heirs.
Because gold coins are a physical asset, the coins must be carefully preserved.
Damaging the coins through something as simple as pressing on them too hard can decrease their value.
Coins may be stolen or lost, and you may need to buy insurance to protect yourself from financial loss.
It may take time and effort to find the right buyer for your coins. When you are ready to convert your coins into cash this may become a problem.
As you can see, investing in coins offers substantial benefits, but this type of investment has drawbacks as well. Many investors may find that adding at least a few coins to their portfolio is a smart idea. It allows you to take advantage of gold as an investment while also minimizing the risks and downsides.