Gold Coin Buying Guide

Written by admin on October 17, 2009 – 11:56 am -

The history of gold coins dates as far back as 2,700 years ago. The first gold coins in the world were issued in Lydia around 640 B.C. certain internet websites will provide you with a lot of information about the history of gold coins.

Gold coins are a favorite of coin collectors with an eye toward investment.

How would you feel if you knew that you had handed over a penny worth $2,000 or more as change for a dollar?

Avoid touching the coin unnecessarily, as dirt and grease from your fingers will tarnish the finish over time. Exposure to air oxidizes metal, changing its colour. Many collect coins to commemorate great events in their lives, a child's graduation, a new baby…or to mark historical events such as the Queen's Golden Jubilee.
ancient gold coin

Some people happily collect more common everyday coins, going through their pockets at the end of the day for them is fun, checking dates and mintmarks on their change. Some collectors can spend thousands of dollars on rare silver and gold coins from the 1800's and early 1900's. Some collect coins from different countries.

Commemorative coins are a popular form of collection, as are rare minted coins like those which had an error in their stamping. If a certain set of coins doesn’t interest you, it won’t be any fun at all to become a collector.

Coin dealers will also be more likely to recognize a counterfeit coin, have a higher chance of hearing about the sale of the specific rare coins that interest you, and will recognize an asking price that is over- or undervalued. As an investor, these are all critically important points for your success.

Coin buying 101
There are various sources where those “special coins” can be purchased. The following are the basic methods and starting places to obtain the coin(s) you have long wanted.

Go local
Coin shops are plentiful in most states. Generally your local area or city will have coin shops which you can visit to see if they have the coins available that you want to add to your collection. Most of these coin shops are located in the larger town or cities. Better yet, use your local phone book and start walking those fingers through the pages to find out where the nearest coin shop(s) is located... These shops provide coin collectors the opportunity to actually examine or scrutinize the coins that interest you. Fortunately, these coin shops are also replete with experts and coin lovers who share your passion and can offer their valid judgment on a particular coin’s grade or value. They can also offer helpful tips as well as advice.

Local coin shops may sometimes have a limited stock or collection of coins and the price they offer them for may be a little bit higher than usual. This scenario usually applies to collectors.

Auctions for coins
Coin collecting for investment purposes can be a tricky endeavor. You will need someone to buy the coins from, and it can be difficult to find a reputable coin dealer. Someone who has been coin collecting for years can help you choose a knowledgeable and honest coin dealer. You'll need to learn about the value of different coins.

The Philadelphia mint used no mint mark until 1980, when it started stamping coins with tiny P's. Yet somehow, a small number of dimes minted in 1982 were a throwback to the time before the mint mark, and bear no letter P.

For most gold coin collectors, there are the highly coveted rare gold coins and a lot of gold coin collectors are interested in these rare gold coins that they will offer high bids just to be able to get their hands on these.

Coin Collection in Renaissance Times Modern coin collecting, where the coins are viewed as a work of art as well as a collection of valuable legal tender, is widely thought to have begun with Francesco Petrarca, or Petrarch, who is often called the father of the Renaissance.

The Augustus Saint-Gauden Double Eagle is widely considered to be one of the most beautiful coins America has ever produced.

Everybody wants to make sure that their investment is protected, but there are no guarantees, especially in rare coins. In fact, some rare coins take years to appreciate to the point of being able to sell it profitably.

The lure of coins lies in its power to draw people into the era it belonged to. These coins show many aspects of everyday life during those times.

There are so many different kinds of rare coins to collect, ranging from gold bullion coins to ancient Roman coins, that it is impossible to be a true expert in all of them. You'll want to find a merchant that specializes in the particular area that is of interest to you.

There are also auctions specifically for coins. This method is a very effective – if not excellent – way to purchase coins. It is extremely important that prior to attending an auction you know the procedures and rules that apply. There are various types of auctions; bidding auctions via mail, internet, as well as auctions conducted by phone. Always be aware and wary! It is important to make sure that you set a fixed price on the coin you are about to bid on. Auctions can turn very emotional and aggressive. Practice discipline and try not to bid more than the ceiling price you have set for yourself.

Buying coins by mail
This method is a very convenient and inexpensive way to purchase coins. Most dealers that transact via mail usually have overhead costs that are low so they are able to offer similarly low prices on coins they sell.

Do not forget to thoroughly inspect a particular dealer’s policies before returning an item. Make sure that once you receive your coin, immediately inspect it for authenticity or damage. The coin you must have must be just as you ordered and what you expected.

In summary, coin buying is not difficult. All you need is to research and look for the best product available. Always be on the lookout for rare gold coins, and have coins appraised by a gold coin expert to avoid large differences in price. Today, building a fascinating collection of coins does not have to be expensive, and everyone can participate in this exciting pastime.

An avid coin collector will be able to tell you virtually every piece of history that surrounds any coin in their collection both because they tend to specialize and because knowledge is one of the most important factors when it comes to starting and maintaining a collection of any value or worth.

Possibly. In 1991, only 459,000 25-cent coins were struck (the annual number is usually closer to 100 million). 'Mint State' versions of these coins are worth about $8.

Some collect coins related to kings and queens. Some collect those related to plants and animals. Generally speaking, putting demand aside, the more scare/rare a coin, the higher its value. This is usually very true, especially when comparing dates within the same series.

Some precious coins with double stamping include doubled-die Lincoln cents from 1972, 1983, and 1984, and a doubled quarter minted in New York in 2001.

While there are some real gold coin enthusiasts in the internet, there are also those people who are posing as gold coin collectors and are just looking to rip you off. You can get a silver locating device or a magnetic pole for finding loose coins in ditches, under cars, or in other hard-to-reach places. Or simply rely on your eyes to identify those gleaming metal circlets of potential wealth.


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Guidelines to Buy Your First Ounce of Gold

Written by admin on October 17, 2009 – 11:52 am -

Question. What kind of gold should I buy?
Answer: We probably get that question more than any other -- pretty much on a daily basis. The answer, however, is not as straightforward as you might think. What you buy depends upon your goals. We usually answer the "What should I buy?" question with a question of our own: "Why are you interested in buying gold?"

If your goal is simply to capitalize on price movement, then bullion coins will serve your purposes. If you are interested in long-term asset preservation and you have additional concerns about capital and/or monetary controls -- a more complicated scenario -- then you might want to include the lower premium variety of pre-1933 European and American coins in the mix. These have been treated by the government since the 1930s as historical, collector items and, as a result, afford the privacy-minded investor with a greater degree of safety than gold bullion.

Q. When should I buy?
A. The short answer is 'When you need it.' You cannot approach gold the way you approach equity investments. Timing is not really an issue. The real question is whether or not you feel the need to diversify your present portfolio with gold. If you feel the need, the best time to start is now. With rising competition for the limited gold supply from both nation states -- like China, Russia and South Africa (to name a few) -- and individuals across the globe, there is the chance that small investors can be crowded out of the market at some point down the road. It is better to be a day early than an hour late.

Q. You frequently mention gold as insurance. What do you mean by that?
A. Gold's baseline, essential quality is its role as the only primary asset that is not someone else's liability. No matter what happens in this country, with the dollar, with the stock and bond markets, the gold owner will find a friend in the yellow metal -- something to rely upon when the chips are down. In gold, investors will find a vehicle to protect their wealth. Gold is bedrock.

This is precisely what people have discovered during countless crisis situations over the centuries and in financial meltdowns in recent history like the Pacific Rim in 1997, in Argentina and Brazil in 1998, in Turkey in 2002, and in the MidEast now. When crunch time came, those who owned gold understood what we mean when we say "gold is bedrock."

Over the years, we haven't altered this fundamental philosophy about gold ownership. Needless to say, there are millions of people around the globe, including many Europeans and Americans, who agree with us on gold's utility in this respect.

buy goldQ. What percentage of my assets should I invest in gold?
A. Once again the answer is not cut and dried, but a general rule of thumb is 10% to 30%; and how high you go within that range depends upon your analysis of the current economic, financial and political situation.

Obviously, the individual with a low level of concern about the current economic situation will tend toward the 10% level. Those with lagging confidence in the way things are going will gravitate to the higher end of the range. In recent months, we have had a number of investors go substantially over the 30% figure based on their own reading of the economy and the various investment alternatives available.

In the current investment environment, with yields still running below the inflation rate and stocks and bonds still suspect, gold remains a healthy and viable alternative. Many, including even the die-hard stock investors, still see gold as the most undervalued primary asset group in the standard portfolio mix. As a result, gold is getting a lot of attention. Gold is still in the beginning stages of what many financial experts see as a long term bull market. Since 2001 gold has tripled in value.

Q. Can you give us a profile of the typical gold investor?
A. Traditionally, wealthy, aristocratic European and Asian families have kept a strong percentage of their assets in gold as a protective factor. That same philosophy has caught hold in the United States over the years, particularly in the upper middle class, and there are a number of investors who add gold to their portfolio on an on-going basis as part of a regular gold savings program. This has been good for gold.

Most investors, as I alluded to before, acquire gold not so much because they feel that the price is going to go up, but because they want to insure their portfolios from destruction related to currency debasement -- no matter if their currency is the dollar, euro, yen or Renminbi, for that matter.

Our clientele represent an approximate cross-section of America and Europe, but the heavy buying is concentrated in the professions and among people who own their own businesses. Those with family wealth have also moved to diversify into gold in recent years.

Q. Can you briefly describe what you believe to be the biggest mistake investors make when starting out as gold owners?
A. The biggest trap investors fall into is buying a gold investment that bears little or no relationship to his or her objectives. Take safe-haven investors for example. That group makes up 90% of our clientele, and probably a good 75% of the current physical gold market. Most often the safe-haven investor simply wants to add gold coins to his or her portfolio mix, but too often this same investor ends up instead with a leveraged (financed) gold position or a handful of exotic rare coins (often costing five or six figures). These have little to do with safe-haven investing, and most investors would be well served to avoid them -- except as a sideline.

Q. What is your view of gold stocks?
A. Many of our clients own gold stocks and we believe they have a place in the portfolio. However, it should be emphasized that gold stocks are not a substitute for real gold ownership. Instead, stocks should be viewed as an addition to the portfolio after one has truly diversified with gold itself. Gold stocks could actually act opposite the intent of the investor, as some justifiably disgruntled mine company shareholders learned in the recent past. We cover some the differences between gold stock ownership and metal ownership in 'The Differences between Owning Stocks and Owning Metal' (see link below) so I won't go into the details here. Suffice it to say that gold stocks are stocks first and metal second. There is no such ambiguity involved in actual gold ownership.

Q. What about gold futures contracts?
A. Futures contracts are generally considered one of the most speculative arenas in the investment marketplace. The investor's exposure to the market is leveraged and the moves both up and down are greatly exaggerated. Something like 9 out of 10 investors who enter the futures market come away losers. For someone looking to hedge their portfolios against economic and financial risk, this is a poor substitute for owning the metal itself.

Q. What is the best approach for the safe-haven investor?
A. If you want to protect yourself against inflation, deflation, stock market weakness and potential currency problems -- in other words, if you want to hedge financial uncertainties, there is only one portfolio item that will serve you in all seasons and under most circumstances -- gold coins.


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Bullion and Collectible Gold Coins

Written by admin on October 17, 2009 – 11:49 am -

With the price of gold at record highs and the U.S. economy on the downslide, it’s no wonder that many investors are setting their sights on gold to hedge against the falling dollar. Many investors think gold bars are the most reliable and cost effective approach to buying gold, but gold coins offer benefits that bars do not because of their smaller denominations and viability as currency.

The first gold coins were made by King Croesus of Lydia in approximately 560 B.C. These coins were not pure gold, but were made from electrum, a natural alloy of silver and gold. When the process later became more refined, coins of pure gold and silver were created. The use of these coins spread to many civilizations, including the Greek and Roman Empires and, later, throughout European countries.

gold bullion coin

Gold coins typically cost slightly more than their gold content is worth, because a 4 to 8 percent premium is added for minting and distribution. However, coins may make up for this added cost because they are easier to sell and manage and are more widely collected than gold bars. While minted gold bars typically come in weights between 1/10 of an ounce and 20 ounces, coins range from 1/20 of an ounce to one ounce. The smaller size and more manageable shape of coins can be a strong asset if an investor wishes to sell a small portion of gold, or to use it as currency in the event of a breakdown of the U.S. monetary system.

Bullion coins are valued for their weight plus the premium.

Bank safe deposit boxes are recommended for keeping gold secure, but it is also possible for investors to keep some of their coins at home. Floor safes are a good choice, as an aboveground safe may announce the location of valuables and be stolen.

“If it is not in a safe, spread [gold] around in many small caches. Some of the places suggested by our customers include under floorboards, in lofts [and] buried in the garden. Although these may sound rather facile, they probably work well in practice, especially if others do not know they are there."

Gold does not tarnish like silver does; however, gold is a soft metal that can be scratched or dented. This can lower the resale value of collectible coins, so gold coins should be protected from rough handling.

There are two main types of gold coins: bullion coins and collectible coins.

Bullion coins

The term “bullion” refers to a form of metal in which its value comes primarily from the worth of the metal itself rather than from an artificial currency value. Bullion coins are priced and sold according to the weight of gold within the coin, plus the additional premium mentioned earlier.

Bullion coins are available in many different weights with the most common being 1/20, 1/10, 1/4, 1/2 and 1 ounce. Many countries make some type of bullion coin. Though the designs vary from country to country, and sometimes from year to year, gold coins are sellable in all countries. Different countries may also produce coins of varying purities, which affects prices.

The U.S. Eagle coin is named for the image of a bald eagle it bears on its surface. They are available in platinum, gold and silver. Golden Eagles are 91.67 percent pure. This makes the coins harder and more difficult to scratch. The Canadian Maple Leaf bullion coin is 99.99 percent pure. The South African Krugerrand, the first national bullion coin ever released, is a 22 karat coin alloyed with a small amount of copper for durability. Many other nations, including Australia and China, also offer their own national gold bullion coins.

Collectible coins

Numismatic—or collectible—gold coins are not priced based on their weight in gold. Rather, their selling prices are based primarily on their rarity, age and condition. “Numismatic coins are cherished for their beauty, historical significance, and their potential investment value. Hence, numismatic coins sell at a significant premium over their intrinsic gold content,” according to AmeriGold.

Modern gold bullion coins are not minted in limited numbers, so they are not likely to gain as much value as rare, collectible gold coins when gold is in a bull market, according to the American Gold Exchange.

Although condition, or grade, does not particularly matter when buying and selling bullion coins, these things are important when dealing with collectible coins. Coins in Mint State will be worth more than coins that have been scratched or otherwise damaged.

“In most cases, collectors should look for coins in the highest grades they can afford. However, many of the sharpest collectors and investors will seek out the key rare dates of a series, which can be astronomically expensive in Mint State, in one of the lower grades—provided that they can find a coin with exceptionally high quality for the grade and excellent eye appeal,” according to the American Gold Exchange. “These high quality, lower grade coins are often a better value and far more affordable than the higher grades.” This premium above the coin’s actual gold value varies widely from coin to coin depending on demand, according to American Eagle Exchange.

For investors buying coins, here’s something to consider: Gold is classified as a collectible, which means that profits are not taxed as capital gains but as ordinary income. Long-term capital gains are taxed at a 15 percent rate for those in the 15 percent tax bracket, but gold investments can be taxed at rates of up to 39.6 percent. Those considering putting their money into gold coins should consider what these rates might do to their returns.


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Tips for Gold Investment

Written by admin on October 17, 2009 – 11:42 am -

For centuries, gold has remained a precious and treasured commodity - one that has held men and women in its splendor and glitter. But have you considered investing in gold or looked at gold investment as part of your investment plan? Gold as an investment has been resorted by the wealthy families in Europe and Asia for centuries. Precious metals are a good investment opportunity as they are portable and compact. Read up our tips on gold investment.

tips

Investing in Gold
Gold prices have seen an upward trend in the past 3 years. Though the earlier decades saw a relatively poor performance by the precious metal, gold prices are likely to rise steadily over the longer term. This investment opportunity is showing an upswing again. With uncertainty in the stock market and decline in the US dollar, investors are taking a fresh look at gold as an investment option. Gold works as a perfect hedge against investment in other assets. In fact, when other investments take a beating, gold investment tends to stabilize. As a long term investor, holding on to gold investment is a good tip.

When you are planning to invest in gold, it would be wise to consult an investment consultant. He can help you match your investment goals with the right type of gold purchase. An investment firm can aid in making the right choice of gold investment products so as to hedge your portfolio. Gold bullion coins work well for those who want to capitalize on price movements of the precious metal. It is prudent to buy gold when its prices are low. But sometimes getting the right price may not be that easy. The same holds good for selling too. A buyer should not look at merely the price of the gold investment but its percentage over the gold price or the premium.

Gold investment options
Bullion coins are an excellent investment option. You can go in for the American Eagle, Canadian Maple Leaf, Britannia or the Australian Nugget. The American Eagle Gold coins were minted first in 1986 and hold pride of place as the world's leading gold coin investment option. These gold coins are struck in 22 karat gold with the total weight as stamped on the reverse of the coin. Silver and copper are also used so as to protect the gold finish. Special dyes are used to strike these gold coins to ensure that minute details are visible. Such American Gold Eagles can be bought at dealers of precious metals and coins. You can buy them at the prevailing price of gold and a premium for distribution costs. Gold coins are universally recognized and can be easily sold. The South African Krugerrand was the first gold bullion coin that was marketed as an investment opportunity. The one-ounce Krugerrand gold bullion coin is extremely popular.

  • Gold bars are another investment option. Smaller bars cost more as the premium is low on larger bars. But resale of big bars is not easy. Gold coins are available at lower premiums as compared to gold bars.
  • Gold certificates are titles for a stipulated amount of gold. You can take physical delivery of the gold or trade on it through the certificates. Another scheme is to go in for a gold accumulation plan - one that allows you to buy gold for a fixed sum each month. This allows you to benefit from acquiring it at a market average price.
  • Gold accounts can be started with major banks. Typically those speculating in gold usually resort to this sort of account with commodity brokers or private bankers.
  • Gold mining shares are another method of investing in gold, though not directly. Increase in gold bullion prices will lead to an increase in gold mining share prices - On this premise, many investors take up gold mining shares.
  • Preserve gold bars and bullion coins in the original mint packaging. Since it is soft, mint-fresh gold is easily subject to scratches from rough surfaces. Careful handling and preserving can go a long way in getting the best price during a resale.

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