Gold Coins: Is investing in Gold coins a good idea?
An investment in gold coins is a great way to round out a financial strategy and portfolio. Gold coins come in a number of denominations for ease of use, and can actually be used as currency. Gold bullion and gold bars are also terrific additions to a financial plan for long term safety and security.
Invest in Gold Coins in 2021
When learning how to invest in physical gold products, there are several things to take into consideration. First, where will you store and secure the coins? It is advised that a safe deposit box be secured prior to purchase of gold coins, gold bars, or gold bullion. Second, be aware that “collector” edition gold coins are typically bonded or “clad” and are of no real value to investors and they are typically priced considerably higher than the gold bullion value. Third, always consider the premiums associated with buying gold coins. The premiums can add considerable cost (sometimes over 28%) to the gold.
The Most popular gold coins produced by countries
The three most popular gold coins produced by countries are the South African Krugerrand, the Canadian Gold Maple Leaf, and the American Gold Eagles. All three of these coins are legal tender and are recognized and traded throughout the world because they are guaranteed by the governments that produce them. Gold coins as an investment are an insurance policy if the world financial markets crash due to their ability to be currency. They come in a variety of weights from 1/20th of an ounce to a 1-troy ounce.
South African Krugerrands are typically the best value as they have lower premiums than the Canadian Maple Leafs and American Gold Eagles. The Krugerrand’s actual weight is 1.0909 troy ounces or 33.93 grams and is 22 karat gold. It is also available in 1/10th, ¼, and ½ ounce weights. Premiums for the Krugerrand is anywhere from 2.2% – 7%.
The Canadian Gold Maple Leaf is produced by the Royal Canadian mint and is the only official bullion gold coin of Canada. It was introduced in 1979 in direct competition to the Krugerrand which was being boycotted globally because of apartheid. The Canadian Gold maple Leaf is offered in denominations of 1/20 ounce, 1/10 ounce, ¼ ounce, ½ ounce and full 1-troy ounce weights. The Gold Maple Leaf coins are .9999% pure gold and have premiums typically higher than the Krugerrands, but less than the American Gold Eagles and range fro 3% – 10%.
The American Gold Eagle is produced by the United States Mint and is the only official gold bullion coin of the United States of America. It is 22 karat alloy comprised of 91.6% gold, 3.0% silver, and 5.3% copper to protect it from dents and scratches. The premiums for the American Gold Eagle start at 4% and can reach over 12% depending on the seller.
It is good to remember that the face value of gold coins is not the true value; the true value fluctuates with the prices of gold on the world market. Fractional ounce coins have higher markups than a full ounce coins. Because of that check carefully the premiums as some can exceed 28% for fractional American Gold Eagle coins.
There are other gold coins minted by governments including the Austrian Philharmonics, the British Sovereign, and others. Take your time in learning how to invest in gold coins. Gold coins are highly liquid and typically a good long term investment or as a safety currency.
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