Things to Know Before Buying Gold Coins

The rate of gold per ounce has been fluctuating since the new market scenario emerged. A preferred means of owning physical gold is buying gold coins. Interestingly, gold prices surged by more than 550% over the past ten years and made a record breaking run in 2010 by rising 29.63% and hitting an intraday high of $1,637.50 per ounce. In September 2011, gold breached the coveted $1,900 per ounce mark and subsequently pulled back into the $1,800 range the very next day.

There are numerous means of investing in gold, such as gold bars, gold coins, exchange-traded products (ETPs), gold certificates, gold accounts, derivatives, CFDs and spread betting and mining companies.

Each means has its own pros and cons. Coins are a convenient way to own the yellow metal, constraints of safe guarding are considerably minimized and some coins have value which surpasses their face value many times over.

Be Acquainted with These Before Buying Gold Coins

Here are some things that one needs to keep in mind when buying gold coins:

Gold bullion: The main forms of gold bullion are bars and coins. Their price varies depending on their weight, which varies between 1 gram to 400 ounces for coins and from 1/20 ounce to 1 kilogram for bars.

Among the most sought after gold coins are:

American Eagles: These coins were first minted in 1986 and are the official bullion gold coin of the United States. Liberty as depicted by Augustus Saint-Gaudens is on the obverse of the coins.

Canadian Maple Leaf: This is the official bullion gold coin of Canada. It is produced by the Royal Canadian Mint. The observe features a bust of Queen Elisabeth II. The coin was designed by Arnold Machin. A number of special issues have been made. These include a 99.999% gold coin, a colorized Gold Maple Leaf coin, a holographic Gold Maple Leaf coin, and a one million dollar denominated coin weighing 100 kilograms.

Chinese Panda: A series of gold bullion coins issued by the People’s Republic of China. The coins were introduced by the official mint of China in 1982. The obverse bears a depiction of the Temple of Heaven with Chinese characters saying "Zhonghua Renmin Gongheguo" meaning People’s Republic of China and the year of issue at the base. The theme is marked at the bottom in case of a memorial issue.

Certified gold coins: These coins characteristically sell for much higher than the value of their gold content. This is because of the rarity premium due to their great value to collectors. Moreover, certified gold Coins have never been confiscated by the government, while bullion has been multiple times.

Among the most popular certified gold coins are:

$20 St. Gaudens: These coins gained prominence after President Franklin Roosevelt commanded a halt on the circulation of these coins in 1933. These coins was minted between 1907 and 1933 and are known as Double Eagles. The other Double Eagle gold coin is the $20 Liberty. Double eagle means that the denomination is $20.

$20 Liberty: These coins were minted between 1850 and 1907. An 1879 pattern coin was made using a design combining features of the Liberty head double eagle and stella pattern coin and using the same alloy that consisted of 90 parts gold, 3 parts silver, and 7 parts copper. However, this coin was stolen in July 2008 by two thieves and has since been untraceable.

According to a leading gold market analysis company, gold demand (including demand for gold coins) seems poised to surpass the demand for gold jewelry in India. This is despite the upcoming festival season. Moreover, the experts say that the demand is being boosted by low interest rates and high inflation.