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Some Reasons to Buy Gold Coins of Rare Variants

Blog Dec 29, 2011

If you are planning to Buy Gold Coins for investment, this could be the right time. According to the latest updates issued by coinnews.net, gold prices dropped for the second consecutive day on December 13, 2011. The 0.3% decline brought gold prices to a seven-week low. In response to this decline, the prices of all precious metals recorded a drop in afterhours trading. The decline in prices was due to the fact that the monthly statement issued by the Fed’s FOMC did not carry any hints pertaining to enhanced quantitative easing.

Gold prices fell by $5.10 to about $1,663.10 per ounce as per the February Futures Contract. This was the lowest settlement offer registered by gold since October 24. The primary reasons for this dip in prices were attributed to the strengthening of the US dollar and the looming debt crises in Europe. According to Frank McGhee of Chicago-based Integrated Brokerage Services, the strength of the American dollar is truly working against the best interest of gold. He also stated that many gold investors may consider liquidation on account of the uncertainties surrounding the European economy.

Promising Investment Performance
Before investing in gold coins or bars, it is a good idea to become educated about this form of investment. Here are some factors that may help you make a decision regarding investing in gold and precious metals:

Rare coins have provided substantial long-term growth profits in the past. A few cases in point of far sighted individuals are Harold Bareford, who earned almost $1.2 million in 1978, in exchange for rare coins that he had bought for $13,832 about 28 years back. Another example is that of Louis Eliasberg who accumulated a collection of rare coins worth $300,000. When he sold it at an auction in 1982, it fetched him $12.4 million. Similarly, several other cases that are testimony to the success of rare gold coins have been duly documented in Consumer Reports, The Wall Street Journal and various other guide sheets and industry periodicals. The reports have gone on to state that carefully crafted portfolios comprising of rare coins have usually registered a high rate of appreciation when we consider a long-term investment horizon.

However, performances of the past can never guarantee what the future holds for any acquired collectable. They can, in a simply way, act as a guide to success. The performances of various coins could vary widely over time and there is no guarantee that an investor will make handsome profits. Therefore, investments should ideally be a well planned approach, keeping current market price trends and other economic developments in perspective.

The Liquidity Benefit
Independent coin grading agencies, like the PCGS or the Professional Coin Grading Service and the NGC or the Numismatic Guaranty Corporation, have transformed rare coins into collectibles that guarantee maximum liquidity. On a trading day, there are thousands of such coins which are sold and bought on the electronic exchange. At a given moment, there are scores of coin dealers who can provide quotes for buying and selling any rare coin of US origin. This has been possible on account of independent coin grading awarded by the NGC and the PCGS. It would be a challenge for any other collectible to provide such liquidity. You could also resort to other options for liquidations like direct selling to a dealer or at a public auction.

Rare coins are one of the very few investable collectibles that can be accumulated in complete privacy. Moreover, they are easy to transport and are in demand by those that buy gold coins.

Thumbnail Photo We believe that everyone deserves a properly developed strategy for financial safety.

Lynette Zang

Chief Market Analyst, ITM Trading

Sources & References In This Article

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