Investing in US Gold Coins

In the last three months alone, gold prices have seen a dramatic rise from $1670/oz (average in July, 2011) to prices that have crossed the $1900/oz mark twice this week. Michael Kahn of PBS explained how this impacts the market saying, “On the charts, the patterns on both occasions are called bearish one-day reversals. In English, it means that enough investors thought $1900 was expensive and flooded the market with their holdings for sale.”

ETFs are just one option amongst many available for investing in gold. To add gold to your portfolio, you could invest in gold futures, gold certificates, mutual funds of mining companies and physical gold too. To acquire physical gold, people buy bullion bars, coins, numismatic coins and artifacts or jewelry. But as prices increase, the numbers of scams to dupe first time buyers also increase. One needs to be careful lest they invest their life savings in counterfeit gold. For the coin connoisseurs, the safest bet is to acquire US gold coins minted in the government mints. Not only does this ensure purity and certifies weight and value, but these coins also have legal tender.

US Gold Coins according to Intent:

The first question, persons interested in procuring gold coins must ask of themselves, what is the intent they have for gold coins. In other words are you an investor or a collector? Bullion coins are meant to be valued at spot gold prices in terms of their weight and purity. On the other hand, if you are interested in the story, dates, history, series of the coin, then you should start your collection of numismatic coins.

Bullion Coins: The most popular bullion coin in America is the American Eagle gold bullion coin. Ever since their introduction in 1986, over 13 million one ounce coins have been minted and distributed. They are legal tender coins minted in one ounce, half ounce, quarter ounce and tenth ounce sizes. The obverse of the coin has lady liberty on it and the reverse has a family of golden eagles, the weight and its face value.

First minted in June 2006, the American Buffalo bullion gold coin is crafted out of gold mined out of the newly discovered mines alone, by law. It is the only coin made out of 24 karat, .9999oz fine gold. It is also the only one with a purity, weight and content guaranteed by the US government. The obverse of the coin is an Indian’s head with the inscription of a single word, ‘Liberty’, while the reverse is a buffalo, the inscription ‘In God we trust’ and the face value of the coin.

Numismatic Coins: Gold coins began to be minted in 1795 and continued to be used as currency until 1933. Many coins from that period are still traded as numismatic coins on a substantial premium over gold value. Their prices are dependent on rarity, historical significance, circulation and grading. Owning a series of such coins is like owning a unique part of history. That is why; collectors are willing to spend above and beyond for procuring the coins that complete their collections. These coins have many benefits beyond what bullion offers. To read more about them check out the rare gold coins page here on our site.

There are also other US gold coins available that are different types of value additions to your portfolio or collection. These are the commemorative coins, proof coins and the medals that are minted at the government mints.