Gold coins are one of the staples of precious metals. They have been around for as long as history has been recorded, and they are still incredibly valuable to this day. Gold coins, unlike bullion, have many unique and interesting elements that seperate one item from the next.
An issue from the United States will not at all be the same thing as a coin from China. Whether it be the metal content, the design, rarity or something else, there is something unique about each and every type of coin.
As a gold buyer, you will probably end up obtaining coins at one point or another. This could be in an effort to diversify your investments, to start a collection, or a combination of the two.
Gold coins are a very dynamic subject in that they would take years to completely understand. With that having been said, there are plenty of coins that are available and affordable for even the most amateur of buyers.
Types of Gold Coins
Gold coins vary from country to country. One thing that will always hold true with coins, however, is the fact that they are produced exclusively by national governments. The very definition of a coin is an item that can be used as actual currency.
If you look at an American Gold Eagle, for example, you will see that it has a monetary value attached to it. Of course, these items are seldom used in everyday transactions for the simple fact that their gold content value far outweighs the face value.
Below we have linked to full pages describing each gold coin, including their production levels, sizes, purities, face values, popularities, and more. The list is broken up by bullion coins (coins valued primarily for their gold content) and numismatic coins (coins valued more-so for their collectibility).
- American Gold Eagle
- Australian Gold Kangaroo
- Austrian Gold Philharmonic
- Canadian Gold Maple Leaf
- Chinese Gold Panda
- American Gold Buffalo
- Mexican Gold Libertad
- South African Gold Krugerrand
The initial goal of gold coins was for use in currency. Just as you would use nickels and dimes in the US to pay for items, so too would citizens pay for their purchases with gold coins. As time went on and gold no longer backed the paper money that is in use today, eventually the value of the gold within the coins exceeded its utility as normal currency. It wouldn't make sense to pay for a $5 item with a coin that is worth $5 in legal tender, but is valued at several hundred dollars based on the gold content.
The United States has the most popular and well-known coins of any country or nation. Some of these coins include the Gold Eagle and the Gold Buffalo. Behind the United States are a number of different countries that span multiple continents, all the way from North America (Canada) all the way to Africa, Asia, and Australia.
The coin names that you might already recognize include the Canadian Maple Leaf, Chinese Panda, and Australian Kangaroo. Mexico and countries like South Africa are noted for their coins, but they are produced in lower quantities and are not as widespread as the more common coins listed above.
Factors in Value of Coins
Each type of coin will cost a slightly different amount than the next. This could mean that one Maple Leaf costs more from 1998 than the same coin from 1986, or that a Chinese Panda costs more than an American Eagle. The reasons for this are both simple and complex.
The inherent and real rarity of a coin will play the absolute biggest role in determining its pricing. For example, a common uncirculated American Eagle coin is available in the millions, while one of the earliest Chinese Panda Proofs was only minted in the thousands. Needless to say, the Panda coin is going to cost a lot more.
Condition is one of the elements in coin pricing that most everyone, even those new to coins, is familiar with. A coin that has remained untouched will generally be worth more than a coin that was actively handled as currency for several years. The newer that the coin is, the easier that it will be to find in prime condition. As a result, old coins often times have significant premiums when found in good condition because of their scarcity.
Uncirculated Gold Coins
Uncirculated gold coins are the most common coins on the market. An uncirculated coin is the most basis coin minted each year. Most countries release hundreds of thousands if not millions of their coins each year in this fashion. What an uncirculated coin means is that the item was handled, but not put into circulation along with other paper money and coins. They are most frequently produced and then shipped in tubes containing 20 coins each.
The value of uncirculated coins is relatively minimal. Most of these items will cost around $5-$15 over spot each. The exception to this would be if a coin is from a particular year that had much lower production runs. In this case, the price is going to be set by secondary market demand, mainly from collectors.
From an investment in metal standpoint, uncirculated coins are the way to go. The value of uncirculated coins is determined mainly by the value and price of gold itself, so you will not need to worry about collector demand so much as the worth of actual gold.
Graded and Proof Coins
Graded and proof gold coins are at the highest end of the spectrum. These items are frequently worth multiple times their value in pure gold alone. It is not at all uncommon for a proof or graded coin to cost 2x the price or more per ounce of gold.
A graded coin is encapsulated and judged on condition, authenticity, and overall quality by a grading company. These types of coins are of most value to collectors. The reasons to grade coins include an increase in value, assurance that an item is in fact real, and to ensure its condition is maintained. When buying higher dollar items, ordering graded pieces is ideal.
Proof coins are the "extra shiny" counterpart to regularly minted and issued coins. A proof coin is very easy to decipher from a regular coin when compared to one another. Proof coins are struck twice, meaning that they have finer and more intricate details that allow them to stand out from uncirculated editions. As was the case with graded coins, proof coins too will cost much more than the spot price of gold.
What Type of Gold Coins to Buy
The type of gold coins that you buy will depend on whether you are investing in the value of actual gold or in an increased demand for rare items. Since graded, proof, and exceptionally rare coins' value is comprised mainly of their collectible demand, a shift in the price of gold has relatively little impact. Think of expensive gold coins as you would with any other collectible. If they become more rare and/or have higher demand, the value will go up.
For the investor who is most interested in hedging on the value of gold metal itself increasing, uncirculated coins are most ideal. The premium on these items is relatively small and can be easily recouped should you decide to sell. You will not have to worry about whether secondary market demand goes up or down for the coin itself, since the majority of the value is derived from the gold content and not the rarity of the actual coin.
Best Way to Buy Gold Coins
The best way to buy gold coins, provided you have an ample budget, is in bulk. Coins are one of the only forms of gold where you can actually earn a significant discount off your order price. This is because coins have markups attached to them that are set by the gold website or dealer, so they have a little bit of room to knock off a few dollars while still turning a profit.
Tubes of coins are the most common way to buy gold coins in bulk. A tube typically contains 20 items in each. This can mean you are buying 20 coins that are 1/10th of an oz. each. 1/2 oz. each, or even a full ounce. If you are making a sizable order, you will save more money if you buy many of the same type of coins as opposed to mixing and matching.
In addition, bigger sized coins will have lower relative premiums than smaller sized versions. For example, a $50 mark up on a 1 oz. gold coin will cost you less in terms of % per ounce than $15 added to a 1/10th oz. coin. Multiply $15 x 10 and you will see that it costs $100 more. If you do not have a lot of money to spend, buying in bulk is not an option. If you do, though, it is certainly the best way to cut down on your costs.
Where to Buy Gold Coins
Gold coins can be purchased both on the internet and at actual coin stores. For the most part, you will be able to find better deals if you buy your coins online. This is due to the fact that online gold dealers have lower overhead and have larger inventories, enabling them to be able to offer lower prices to you the buyer.
As far as actual sites are considered, we recommend JM Bullion. They offer uncirculated coins, graded coins, and rare coins. The prices are fair and the selection of items is complete.