Investing in gold coins can be as simple or as complicated as you want to make it. If you are just starting out on your gold investments, this basic gold coin investing strategy will simplify things very for you. This article will discuss the most popular and recognized gold coins you can invest in.
Basic Gold Investing-Gold Bullion Coins
If you are just starting out with gold investments, I recommend investing in gold bullion first. Gold bullion has the least premium over the spot price (or melt value) of gold at the time of your purchase. So it is the least expensive way to start acquiring gold. Gold bullion comes in coin or bar form with coins being more popular with US investors.
American Gold Eagle
My top recommendation for investing in gold bullion coins is the American Gold Eagle. First issued in 1986 by the US Mint, American Gold Eagles are said to be the most popular gold bullion coins in the world. Each coin is minted in 22-karat solid gold and has an image of Lady Liberty on the opposite (front) and A Family of Eagles on the reverse.
American Gold Eagles are backed by the US government for weight, content and purity which is why they are widely accepted (and quite easy to convert back to cash). American Eagle gold bullion coins can be purchased in four different denominations:
one-ounce with a $ 50 face value; half-ounce with a $ 25 face value; quarter-ounce with a face value of $ 10; and tenth-ounce with a $ 5 face value. You will pay more of a premium over spot gold for the half, quarter and tenth-ounce coins than the one ounce coin.
Canadian Gold Maple Leaf
My second recommendation for investing in gold bullion are coins from our friends to the north – the Canadian Gold Maple Leaf. Produced by the Royal Canadian Mint starting in 1979, these beautiful 24 karat gold coins are 99.99% pure gold (in 2007, the Royal Canadian Mint began producing 99.999% pure gold, one-ounce Maple Leaf coins). The Gold Maple Leaf has an image of Great Britain's Queen Elizabeth II on the opposite side. The coin's reverse image is that of a maple leaf – Canada's national symbol.
Gold Maple Leaf coins are guaranteed by the Government of Canada for their weight and purity. They are as widely recognized and accepted as the US Gold Eagle and make good investments. Gold Maple Leaf bullion coins can be purchased in the following sizes: one ounce with a face value of 50 Canadian dollars; half-ounce with a face value of 20 Canadian dollars; quarter-ounce with a face value of 10 Canadian dollars; and tenth-ounce with a face value of 5 Canadian dollars. Premiums over spot gold are similar to that of the American Gold Eagles.
Let me caution you if you decide to invest in Canadian Gold Maple Leaf coins. Because gold is a soft metal, pure gold coins are easily scratched or nicked if not handled carefully. Always handle your coins by the edges only (regardless of what gold coin it is) and be especially careful handling your Gold Maple Leaf coins.
South African Krugerrand
My third recommendation for investing in gold bullion coins is the South African Krugerrand. Produced by the South African Mint beginning in 1967, this coin gets its name from Paul Kruger, the last president of the Republic of South Africa, and the "rand", the monetary unit of South Africa. The one-ounce Krugerrand contains one troy ounce of gold and is alloyed with copper (1/12 copper, 11/12 pure gold) resulting in a 22-karat coin. They are more durable and scratch-resistant than pure gold coins. The opposite side of the coin has the image of Paul Kruger. The coin's reverse image is that of a springbok antelope, one of South Africa's national symbols.
South African Krugerrands are as internationally recognized and accepted today as the American Gold Eagle and the Gold Maple Leaf. In the mid-1980's, the US Congress banned the importation of South African Krugerrands as part of the anti-South African Boycott. Krugerrands already in this country were allowed to continue being traded. Because of this action, Krugerrands lost some of their luster (no pun intended). As a result, these coins have about the lowest premium and are among the cheapest way for you to own a one-ounce gold coin. Krugerrands also comes in fractional sizes.
When Buying Gold Coins – Buyer Beware
Before you start shopping for gold coins, let me just say that when the price of gold gets this high, precious metals dealers come "out of the woodwork". You must be careful when selecting a dealer as there have been several accidents over the years where precious metals dealers have gone out of business resulting in big losses for their customers. I will be writing a more complete article on finding good dealers at a later date.
Disclaimer: I have made every reasonable effort to produce an informative and helpful article on Basic Gold Coin Investing based on my research and experiences. However, I make no representation or warranties of any kind with regard to its completeness, accuracy or suitability for any particular situation or purpose. Only you can decide if investing in these gold coins is right for you. I take no responsibility for your gold investment decisions.