Investing in Gold Coins: Pros and Cons  

Gold and other precious hard metals have a particular allure.  They’re shiny, weigh a substantial amount and can be processed into coins and bullions bars that you can hold, store and smooze over.  Unlike shares, bonds, and exchange-traded funds, gold coins are tangible assets that can appreciate in value over time.

The big question is; are gold coins a sound investment or are they just a vanity project that doesn’t have a place in the modern investment portfolio?

Renowned investors like Warren Buffett believe that gold has had its day.  In his opulent world, gold has far less value than the latest Fair Go casino coupons no deposit offers; online casino bonus codes that have the potential to unlock a million-dollar payday!

However, not everyone shares the same sentiments as Buffett… and the robust trade in gold coins worldwide attests to that fact.

The Three Main Types of Gold Coins

Before we delve into the pros and cons of investing in gold coins, it’s important to differentiate between the different types of coins you can buy online and at local dealers.  There are three main categories of gold coins:

  • rare or numismatic coins
  • rounds or medallions
  • bullion or sovereign coins

Numismatic coins are rare coins that are bought and sold by a comparatively small pool of collectors.  The rarity and condition of these coins is what determines their value, not the gold content.  Unless you are particularly knowledgeable, investing in these types of coins is not recommended.

Rounds or medallions are manufactured by private mints.  They have no face value, are not recognised legal tender, and are not government backed.  As a result, they are less attractive to investors and more difficult to liquidate, especially in an emergency.

Bullion or sovereign coins are produced by a government mint.  They are made almost exclusively from highly refined gold and, with the exception of the South African Krugerrand, have the face value and gold purity stamped onto the coin.  These coins are always in demand and are primarily traded as an investment.

If you want to add the age-old lustre of real gold to your investment portfolio, bullion coins are the way to go.

Top Five Gold Sovereign Coins for Investors

At the current moment, you can invest in gold bullion coins minted in 25 countries.  All consist of refined gold and are available as one-ounce coins or in a variety of smaller denominations.

The price of these coins is linked to the commodity price of gold on the day.  In most countries, the going rate for the various denominations of gold coins is published online and in the local newspapers.

Australia has the Gold Nugget, China the Gold Panda and Russia, the Chervonets.  The UK has minted five sovereign gold coins that include the Britannia, Lunar and The Queen’s Beasts.  The USA has three gold coins, two of which are best sellers and you can find gold bullion coins from countries like Poland, Israel, the Ukraine, Mexico, and the Philippines.

If you’ve got a bit of spare cash jangling around in your pocket, which are the best coins to buy in terms of ROI?  Here’s a list of the best sellers:

  • The South African Krugerrand was first minted in 1967 and is the oldest 22-karat bullion coin in circulation.  It features the profile of a former president of South Africa, Paul Kruger on the one side and an image of a springbok, the national animal of the country, on the reverse side.  Along with the bullion coins, the South African mint produces limited edition proof Krugerrands for the collector’s market.
  • The American Gold Eagle is a 22-karat bullion coin with a face value of $50.  It was first released in 1986 and features Lady Liberty on the one side and the American Golden Eagle about to land on its nest on the reverse side.  This gold coin is currently the most traded gold coin worldwide.
  • The Canadian Maple Leaf is legal tender in Canada and has a face value of C$50.  It was first minted in 1979 and features obverse and reverse images of Queen Elizabeth II and a maple leaf, respectively. Due to the introduction of a host of sophisticated security features in 2013, the Canadian Maple leaf is the most secure coin the world.
  • The Austrian Vienna Philharmonic was launched in 1989 and celebrates the Vienna Philharmonic Orchestra in both name and design.  It has a face value of 2,000 Austrian Schillings and up until 20 years ago, was the fastest selling gold bullion coin in the world.
  • The American Gold Buffalo is a 22-karat gold coin with an Indian head on the one side and an American bison on the other.  It has a face value of $50 and as it was first minted in 2006, is the newest gold bullion coin on the market.

Now that you know which bullion coins to invest in, here are a few pros.

Gold coins are:

  • easy to liquidate anywhere in the world
  • value dense and easy to store
  • portable and can be transported on your person
  • impossible to hack or erase
  • low maintenance
  • a great hedge against market volatility

And a few cons:

  • you can’t earn interest or dividends
  • the price of gold coins fluctuates along with the commodity price of gold
  • coins can be vulnerable to theft

Share This: