If you want to buy gold coins there are certain factors you need to consider as it is not quite like buying gold bullion.
Since most countries allow the free import of legal tender gold coins and do not tax their trade, with a few restrictions , you have the luxury of choosing which gold coins you wish to invest in. All gold coins that have been mined since 1800 and have a minimum 90% gold content are considered investment gold and any trade conducted is exempt from VAT in the EU.
How to Buy Gold Coins
There are a number of different types of gold coins available for sale but the top two are British Gold Sovereigns, American Gold Eagles and Krugerrands. You should remember that the selling value of gold coins is tightly connected to the price of gold but they also include a premium which varies across the board for different types of coins as well as the quantity you buy.
British Gold Sovereigns
These gold coins make an excellent investment if you are buying at least 50 coins at a time as the premium is only slightly higher than Krugerrands. If you are buying smaller quantities you may end up paying a premium making gold coin prices too high to be worth the purchase. However, if you are buying “in bulk” then the slightly higher premium is worth paying because the resale value of British Gold Sovereigns is usually much higher and they are also much easier to sell than any other type of gold coin. It should be noted that the profits obtained from an investment in sovereigns are exempt from the Capital Gains Tax in the UK.
American Gold Eagles
The American Gold Eagle was first released by the U.S. Mint in 1986 and is offered in 1/10 oz, ¼ oz, 1/2oz and 1 oz denominations with a guarantee from the U.S. government that they contain the actual stated amount of gold in troy ounces. As the South African Krugerrand, these gold coins are 22 karat and also contain a silver and copper alloy to help increase the coin’s stability. The reason you should buy gold coins in the first place is as a risk management tool and as you would diversify your entire investment portfolio so should you also diversify your investment in gold coins. Since the American Gold Eagle is backed by the U.S. Government this makes it a worthy addition to your gold portfolio.
Krugerrands
These gold bullion coins are offered at a low premium as the South African Mint sells them for only an extra 3% as well as shipping and insurance costs but they sell only directly to large banks as well as bullion dealers. There are many other coins available but due to their longevity and the low premium which is caused by the high number of Krugerrands sold, they make for a wise investment.
Like with any gold purchase you will want to make sure that gold coin prices and premiums are not at a peak when making your purchase. Also consider other factors such as ease of liquidation because you may buy gold coins easily but some of them are more difficult to resell. Also check the historical trend of the resale value of the coin which will help you determine whether or not they make a good choice. As pointed out above, even if you pay a higher premium it may be worth it if the selling value of the gold coins is much higher.
Where to Buy Gold Coins and Bullion
When you buy gold coins it is critical that you use a reputable, authorized gold coin dealer and due to the Internet they are not as difficult to find anymore. Your first option is to speak to your current broker to see if they either deal in gold coins or can connect you to the best gold coin dealers. Most of the time they will have one or two names for your to deal with and since word of mouth is worth more than its weight in gold this is the best option.
Filed under Gold Price by on Jan 29th, 2010. 
Right from the tomb of Tutankhamen to the present day chic jewels, gold has been a metal of people’s interest across time, culture and folklores. Its preciousness, beauty and grandeur are undeniable. Has it ever crossed your mind that investing in gold could be an excellent option to consider? If you have not, then trigger your investment plans with some golden moves. Financial advisors have spotted an upward trend in gold prices in the last three years. They opine that gold price will steadily rise even more over the coming years, thus making it a great investment option.
There are plenty of ways to invest in gold, each with its pros and cons. Here are a few you can consider:
- Gold Bullion Coins and Bars: It is the most common and familiar way to invest in gold. South Africa Krugerrand, US Mint Eagles and Canadian Loons are some of the popular bullion coins that you can get from the respective government and private dealers. You may also invest in small bars. Their cost typically includes the prevailing gold price and a premium for distribution. Usually prices are driven on demand and premiums usually vary according to the dealers’ discretion. So you must shop around to get the best price and a reputable dealer. Also make sure you preserve coins in original mint packaging and protect it from injury in order to maximize its resale value.
- Exchange Traded Funds: If you think you are not comfortable paying premiums and commissions, then you can consider Exchange Traded Funds (ETFs) for your gold investment. These are somewhat like shares and easily available in the stock market. You can buy it like a normal stock and the only cost you need to pay is the stockbroker’s commission. They are usually managed like mutual funds but do not involve complicated paper works and redundant expenses. But keep in mind that ETFs do have some costs and the little management fee on them might depreciate the value of the share.
- Gold Mining Companies: Another great option for gold investment is to buy public shares of gold mining companies. Increase in gold bullion prices will lead to an increase in gold mining share prices. But before you invest, do not forget to research on the company and its financial developments and be prepared to sell your shares when there is a recession.
- Gold Certificates: This is another good way to invest in gold. Gold Certificates are ownership certificates for a specific amount of gold. You can buy physical gold or trade through certificates or go for a gold accumulation plan. Gold accumulation allows you to acquire gold for a stipulated sum every month at the market average price.
- Gold Futures: Gold Futures are something like gambling in the gold market. With it you deal to trade gold on terms you decide now but actual exchange of gold and money takes place in future. It allows you speculate on gold price. Gold future is a great way to take bigger risks and earn bigger rewards.
- Gold Accounts with banks: If you are speculating in gold, you then you can start gold accounts with major private banks and even commodity brokers.
Gold investment has catapulted the precious metal to grand commercial height. So, if you are planning to include some gold investment in your investment plans, then you are on the right track. Some wise investment in gold will possibly never make you run on overwhelming losses.
Filed under Gold Investment by on Sep 26th, 2010.
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