6 Things to Know When Buying Gold Coins
If you are looking for a way to preserve your wealth, diversify your investment portfolio, and hedge against inflation, consider investing in gold coins. However, buying gold coins can be challenging, especially for first-time investors. To help you get started, we have compiled a complete guide of the six things you need to know when buying gold coins to make informed decisions. Let’s delve right in.
1.There are two types of coins
Gold coins are available in two types: Bullion coins and Numismatic coins.
Bullion coins. These are coins whose value is determined by the underlying precious mental content. Bullion coins fluctuate according to the gold and silver prices.
- Numismatic coins. Also known as collectible or rare coins, Numismatic coins are historically significant pieces. They are often minted for collection purposes, and their value depends on market demand and historical supply.
Ensure you can distinguish between the two coins before making your first investment.
2.Gold coins come in different sizes and weights
Like gold bars, gold coins are available in distinct sizes and shapes. The most popular gold coins come in weights of 1/10 troy ounce, 1/4 troy ounce, 1/2 troy ounce, and one troy ounce. Before purchasing gold coins, be sure to evaluate their size and weight. The gold coins’ weight impacts their price and storage capabilities.
3.Always consider the gold’s purity
Be sure to check for a hallmark that shows the gold’s manufacturer before purchasing to determine the coin’s quality. The gold coin’s purity is measured in fineness and Karat (KT). The purest form of the gold coin is 24 Karat, and it contains 24 gold parts. Most investors prefer 24 Karat purity or 22 Karat gold coins. 22KT coins have 20 gold parts and two parts of other elements, including silver or zinc.
4.Gold price fluctuates based on market demand
An effective way to tell a good deal from a bad one is by checking the gold coin’s spot prices before investing. This is because the cost of a gold coin fluctuates according to the market demand. It is worth noting that like gold bars, gold coins are often sold at a premium. This means you should always factor in the cost of manufacturing, shipping, and packaging in addition to the gold coin’s inherent value.
5.Always purchase coins in tamper-proof packaging
If you want to protect yourself against fraud or purchasing counterfeit or damaged gold coins, always go for gold in tamper-proof packaging. In case you intend to resell the gold coins, do not open or tear the packaging. This enables you to ensure the credibility of your gold coin’s purity.
6.There are various options to purchase from
You are not solely limited to your local jeweler when buying gold coins. You could also purchase from banks, coin shows, and online marketplaces. There are many counterfeit gold coins and scams, so you must do your due diligence and buy from a trusted vendor. Be sure to also compare prices from reliable dealers to avoid paying more than you should.
Buying gold coins is a lucrative venture for any investor. Familiarize yourself with the different types of coins, determine the piece’s purity, and buy from a reliable dealer to protect your investment.