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5 Tips for Investing in Gold Coins

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Regardless of where the economy is headed, gold bullion coin prices always prosper. Be it the American Eagle Coin or the Canadian Maple Leaf, gold coins have long had high intrinsic value and can easily be bought and sold in the open market - without incurring any losses at all.

Following the Economic Recession of 2008, most of the investors have now turned to gold bullion coins and exchange-traded funds as a way to maximize their returns and keep their investments safe from market uncertainties. Investing in gold coins is also a way to diversify your risk portfolio, especially when you invest in volatile financial instruments (such as shares and bonds).

Despite their stable market prices, investing in gold coins can turn onerous if you’re unaware of the market conditions. Here are 5 simple tips for investing in gold coins that will maximize your ROI and keep your risk at a minimum level:

Invest in North American Coins

As mentioned earlier, the American Eagle Gold and the Canadian Maple Leaf are the two most popular gold coins traded on the open market, at 22-karat and 24-karat respectively. Although almost similar to each other, the gold content on the American coin ranks higher in purity, as proven by the U.S. Mint.

To compete with its Canadian counterpart, the U.S. Government also introduced a new gold bullion coin in 2006, the American Buffalo. At 24 karats, Buffalo represents the finest gold coin specimen designed by the United States. Combine this with the Eagle, and your gold stocks are worth thousands of dollars in the open market. It’s no surprise why several Americans are investing their IRAs and Roth IRAs in gold bullions.

Compare all Dealer Prices

U.S. Mint does not sell gold coins directly. Several authorized dealers are charged with the task to conduct sales and purchases transactions with the investors. Dealers usually sell gold coins at a premium above the spot rate, so as to recover their expenses (documents preparation, shipment and service charges).

If you’re planning to invest in gold coins, make sure to view the spot rate for gold coins. If your dealer is charging you a premium exceeding 5% of the spot rate, it would be unwise to purchase from them. As a rule of thumb, go for the dealer offering the lowest premium.

Start with 1-ounce Coins

Most of the American Eagle Coins are issued in four different denominations; one-tenth ounce, one-quarter ounce, half-ounce and 1-ounce. Fractional coins have a higher premium above their spot prices, especially when pitted against 1-ounce versions. Therefore, it is best to just stick with 1-ounce coins.

Beware of Rare Coins

Rare coins require much more diligence and expertise, for investment purposes. Two coins may look exactly the same, but their spot prices may vary significantly due to the metal used and the age of the coin. If you come across a vintage gold coin, you should consult a professional grading agency to determine the authenticity and the true market value of the coin, before making any investment decisions. Such grading services assess a coin, in terms of its net worth in the market, keeping you safe from investing in bogus and fake coins.

Evaluate Buyback Policies

When considering gold bullion coins, try finding our dealership charges on each transaction. Some dealers charge excessively high premium on buybacks, while others keep it at a marginal level. Ideally, there should be no premium on gold coins buyback. But even if it exists, it should not exceed 1% of the spot price at the time of reselling.

For more on gold buying tips and tricks and to check out our coin collecting supplies to keep your precious coins safe from damage, please visit us at CS Supply Central.