7 Steps to Buying and Selling Gold Coins for Profit
Most of the coin collectors are already aware that gold prices vary inversely with currency price. As the currency value weakens in the open market, gold prices tend to shoot up. If you have a habit of collecting gold coins, you can benefit from this movement in prices. Here are the 7 basic steps through which you can easily buy as well as sell gold coins for a higher profit margin:
Step 1: Know your Coins
Gold coins can be divided into a number of different types, based on their value, historical significance and year of minting.
- üBullion Coins are the most commonly traded gold coins in the open market. Some of the most prominent coins falling within this category include American Gold Eagle, Canadian Maple Leaf and South African Krugerrand. These coins have a market value equal to their base gold values
- üRare Coins: These coins often sell at a very high premium- much more than gold coins alone. Despite its high profitability, rare coins are hard to find and even harder to value. Their prices do not change with respect to currency or gold prices. It is always best to consult professional coin evaluation services before buying a rare coin.
The standard weight for a U.S. Gold coin is approximately one troy ounce (31.1 grams, to be precise). There are some coin collectors with coins exceeding or less than the standard weight. Such coins are traded less frequently and their premium varies from dealer to dealer. If you’re new at coin collecting, you should stick to those coins that are of standard weight.
Step 2: Consult an Expert
The biggest risk with collecting coins is the fear of losing out on coin value, selling for low premiums or coming across a fake gold coin. To minimize your losses and to make sure that you are only dealing in real gold coins, have an independent third party evaluate your coin. This gives you an added assurance as to your trade.
Step 3: Buy a Coin Holder
Once you decide to buy coins, you’ll need to find a secure place for storing them. You can store them in a bank safe, a deposit box or at with a custodial services provider. If you plan on keeping them at home, invest in coin collecting supplies. Such casings and boxes prevent your coin from damage and deterioration due to environmental factors.
Step 4: Choose the Right Dealer
You can buy gold coins directly from the government, through an online auction at eBay or from an individual dealer. If you choose dealership services, it’s best to view their catalog and go through their reviews, ratings and testimonials, before making the final choice.
Step 5: Monitor Gold Value
Read your morning newspaper every day and check the gold prices. Surf through the internet and find a good website that reports on minute-by-minute changes in gold prices. Download any mobile app that offers the latest gold prices. This way, you’ll always know what your coin is worth and what price you should trade it for.
Step 6: Check Currency Value Regularly
As explained earlier, rising currency value denotes falling gold prices. If you have gold coins, you’ll need to check currency values every now and then. If the currency value is increasing, it might be a good idea to sell off your gold coins as quick as possible.
Step 7: Sell only at Demand Peak
The final step involves a combination of both research and intuition. Keep a tap on the market. Whenever the demand for gold soars, sell your coins immediately. This is the time when the sentiments are bullish and you’re looking at sizeable gains and profits.
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