What You Should Know Before Buying Gold Coins

Gold coins offer a great way to diversify your portfolio and store your wealth. However, you must understand a few key things before buying one.

Bullion coins are minted in large quantities and valued mainly for the precious metal they contain. They are often sold at a premium above the spot price of gold.

Precious metal

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To make a gold coin, refineries begin by rolling out coiled sheets of metal to the required height and then using powerful machinery to press them between two dies. The result is a blank coin that has an exact weight and value, such as one troy ounce of gold.

Modern gold bullion coins are mostly minted on a limited run for investors to profit from the fluctuation of precious metal prices or for collectors. The Royal Mint, for example, offers a range of modern gold coins with themes such as the Queen’s Beasts series and the Lunar Series. In the UK, bullion coins considered legal tender are free from Capital Gains Tax (CGT). This makes them a great alternative to paper money.

Investment

Small gold coins, also called fractional gold coins, are a popular gold investment choice for new investors with smaller budgets. These coins are denominated in fractions of a troy ounce, which is an industry standard for precious metals. A troy ounce is roughly equivalent to 1.097 standard (avoirdupois) ounces.

Bullion coin investments offer several benefits to those looking for a safe-haven asset that can be sold easily. These include the ability to store them safely and efficiently, and a high level of liquidity. They can also be bought and sold through a variety of sources, making them an easy way to diversify your portfolio.

Investors often purchase bullion coins as an inflation hedge, as their purchasing power may rise in times of high inflation. They are also a good alternative to fiat currencies, which can experience hyperinflation and loss of purchasing power. However, many investors find numismatic coins more desirable for their collectable value and aesthetic appeal.

Collecting

Gold coins have a distinct appeal to many collectors because of their unique numismatic value. This can range from a simple design to a significant historical event or a symbolic representation of a nation’s heritage. Many collectors also prefer to collect rare or unusual gold coins to add variety to their collection.

Many of the most valuable gold coins are graded by professional grading services to ensure the coin’s condition and authenticity. They are then mounted inside tamper-proof hard plastic cases, commonly known as slabs. This is an important step in the collecting process because a slab provides protection against surface damage and contact between the coins.

Some enthusiasts choose to organize their gold coin collection by date and mint mark. This is a traditional strategy and requires a high level of knowledge about the different gold coin types and their history. A more adventurous approach is to collect gold coin sets by type or design.

Storage

Many customers who invest in precious metal bullion coins struggle to find a suitable storage solution. A safe deposit box at a bank is one option, but it comes with several disadvantages. For example, a bank’s safety deposit boxes are not monitored 24/7 and may have limited access hours. Plus, it can cost you several hundred dollars per year in fees.

Other storage options include storing your gold and silver at home in a safe. This can be a good option if you are comfortable with the location and can keep it secret from others. However, it’s important to remember that you can lose or damage your gold if it is exposed to dampness, tarnishing, or theft.

You can also store your gold at a depository or third-party storage firm. This is a more secure option, but it can be expensive and difficult to get your gold back if you need it. Plus, you will need to provide proof of ownership and insurance coverage.