Gold Coins And Bullion Coins

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Bullion Coins

Tips for Buying Gold Bullion Coins...Safely

When you decide to buy gold bullion coins you are committing to a decision that may well have a very positive impact on the preservation of your future buying power......but only if, you actually pay a reasonable price! Too many novices, buying gold bullion coins for the first time, overpay and subsequently will have to wait a long time to see "the return of their investment" (Will Rogers!).

Gold Bullion coins are coins whose value is based on their intrinsic metal value. Not on any “coin collecting value” (in spite of what some dealers might try and persuade you!). Normally they trade for a "premium over spot". "Spot" is the price of the metal in the "spot" market and is widely reported on the financial channels, as well as daily in many news papers. Some websites carry the graphs “live” (though often with a slight time delay). Typically, bullion coins sell for a premium of up to 10% above "spot" - but this number varies depending on the type, quantity and size of bullion coins you decide to buy. For example:

First off, type of gold bullion coin:

The premium above spot is generally lowest on Krugerrands. For a one ounce gold bullion Krugerrand you should NEVER pay more than a 10% premium above the spot price. Ignore talk of "beautiful collectible coin". These are bullion coins pure and simple.

For half ounce coins the premium is greater; a half ounce gold bullion Krugerrand should have a maximum price above spot of 12%. Again, that's it - don't be deceived!

Next, quantity:

If you order more bullion coins, you can expect a price closer to the spot price of the metal e.g. in the case of Gold Sovereigns, if you were to buy 100, expect to pay no more than 7% above spot.

Finally the size of the coin. The smaller coins tend to carry a higher premium above the spot price, as noted above in the Krugerrand example. That’s why I would always advise someone to save a little longer and try and buy a one ounce coin rather than buying two half ounce coins (or 10, tenth ounce coins…).

The numbers I have quoted are designed to give you a sense of 'order of magnitude' of what to expect. I get fed up of hearing stories of first time gold bullion coin buyers paying DOUBLE what they should have.

So to summarize. Buying gold bullion coins can be one of the best ways to preserve your wealth in these uncertain times - but only if you don't get overcharged at the outset. Keep an eye on the gold price and do your sums.

For MUCH more free information, visit our Bullion Coins blog!

Paul

Gold Coin

Buying A Gold Coin In A Bullion Dealers

So, you are sitting in the offices of your favorite gold coin dealer, mulling whether to choose a nice Gold Eagle over a gold Maple…….but, hold your horses: Why don't you ask the question - that can make your gold coin collection much more interesting - and potentially much more valuable:

"What unusual stuff have you also got?".

You see, gold bullion dealers are only interested in the gold bullion content of the goods they buy. And a gold coin falls into that category. Over time, they receive a huge range of gold coins which they value purely for their metal content. Yes, if something with definite "collector value" like an old gold guinea, heads their way, they will be sure to make sure they get full value for it. But most of the time, they are not concerned about mint marks or dates. Most of the gold coins they receive are not remotely rare, and in the hands of a bullion dealer, may even be heading for the melting pot…….but it always pays to ask.

Over the years this question has brought me gold coins from all round the world and sometimes gold coins which were definitely worth more than their bullion value…as proved when I sold them. One example that sticks clearly in my memory was an 1887 proof British gold sovereign. Now, the 1887 Jubilee head sovereign is a coin which normally sells for its bullion price plus a premium.

But only 700 of the proof gold coins were minted….and I was in a bullion dealers with one in my hand…..

So, next time you are in a gold coin dealer and just about to plonk your money down on a beautiful gold coin - just pause and ask the question: "what unusual stuff have you also got?" This way you can bring a new and hopefully profitable dimension to your gold coin collection.

It doesn't cost anything to ask!

Till next time,

Happy gold coin collecting,

Paul