Buying Gold Coins: What You Should Know About Gold Prices
Buying Gold Coins: What You Should Know About Gold Prices
According to the 2010 third quarter figures released by the United States Mint, gold prices rose by 6% during the period. The Mint attributed this surge to a 5% increase in gold coin and gold bullion demand in September. The decline in the US dollar was another factor that boosted investments in gold. Being a seasonal period, this quarter witnessed demand for gold coins hitting a record high. The price of gold coins had also been pushed up by hedge funds buying the yellow metal.
Certain analysts had suggested that the US Mint faced difficulty in keeping up production to meeting the soaring demand for gold. The 24-karat gold bullion coins – the American Buffalo and the Canadian Maple Leaf – remained the reigning coins of the third quarter.
Buying Gold Coins: Things to Know About Prices
While acquiring US gold coins individuals must first determine their value. For that they must understand how a bullion gold coin is different from a numismatic gold coin. The main purpose of creating a bullion coin is for an inflation hedge, whereas a numismatic coin is acquired as a way to privately grow wealth over the long-term.
When it comes to pricing, it is the intrinsic value of gold (per ounce) that is taken into consideration to calculate the market price of bullion gold coins. Contrarily, the selling price of numismatic gold coins is calculated considering the following factors:
- Rarity
- Popularity and numismatic significance
- Grade or condition
- Quality
- Supply & Demand
The bullion value of a 1933 Saint-Gaudens gold coin could be in thousands. However, on account of its numismatic and historical importance, its selling price can touch the seven figure mark, as it did in 2002, selling for $7.6 million.
How to Determine Prices When Buying Gold Coins?
To determine the price of bullion gold coins, you should consider the following:
- the intrinsic value of gold or its actual market price
- an additional sum that typically includes premium for manufacturing and other costs
The price of bullion gold coins is higher than gold’s market value by a small margin.
Some of the popular gold bullion coins include the gold American Eagles, China Panda coins, Canadian Maple Leaf gold coins and South African Krugerrands.
The following steps will help in the determination of the selling price of gold coins:
- Use a gram scale to estimate the weight or content of gold in a given coin.
- Stay updated with the spot price (the ongoing market price) of gold. This price changes unpredictably, especially in case of metals like gold. Spot prices are also available online.
- Evaluate the pure gold value of coins.
- To get the final price of gold coins take into consideration factors such as manufacturing costs, distribution charges and dealer commissions. Due to these costs, the market price of the bullion gold coins is typically a little higher than the spot price of gold.
