Today, it seems as though there’s a “cash for gold” purchaser on every corner. Jewelers keep signs in their windows year-round proclaiming that they buy gold coins, necklaces, rings, and any other gold items that you might have laying around your home. In the last ten years, investing in gold has become more and more common, making the price of gold rise dramatically thanks in no small part to the catastrophic demise of the housing market as well as the flatlining of the stock market. Seen as a safe investment even in the worst of times, United States Mint Gold coins and commemorative coins are a quick, easy way to invest in gold without having to open up your own “cash for gold” store.
How United States Mint Gold Coins Are Sold
The United States Mint offers coins in one of two ways that you can use to invest in gold. The first way is for consumers wishing to purchase United States Mint gold coins to buy gold from established dealerships of coins. These dealers purchase quantities of gold coins from the mint, break up the boxes they are shipped in, and then typically will sell the coins individually for a small premium above the price that they paid for the coins. When you go into a coin dealer, you will not typically see a price on the gold coins you wish to buy. Instead, the coin dealer will quote you a price based on the current market value of one ounce of gold.
In addition to standard “circulating” bullion gold coins, the United States Mint also produces a limited quantity of what are called “proof coins.” These coins feature special minting and finishing techniques that produce an exceptionally pretty, mirror-like finish on the coin. They are purchased with a certificate of authenticity from the United States Mint along with a special presentation box. If your interest is in collecting gold coins rather than just investing in gold coins, you’ll want to purchase these proof coins, as they hold a higher premium value over that of typical investment-quality gold coins from the mint.
United States Mint Gold Coin Denominations
The Mint produces a number of different varieties of gold coins that you can purchase. These are denominated in fractions of one ounce. For instance, a one-ounce American Eagle gold coin has a face value of $50. Obviously, it is worth much more than this, but the coin must have a dollar value in order to be circulated to the general public. The next denomination is the $25 gold coin, which is 1/2 of an ounce of gold. The next is the $10 gold coin, which is 1/4 of an ounce of gold, and finally, the $5 gold coin, which is 1/10 of an ounce of gold.
Should You Invest in Gold Coins?
Investing in gold coins from the United States Mint is always a good idea, but there are a few concerns that you should be aware of. First, like any other investment, gold coins should comprise only part of your overall financial portfolio. Because of the nature of gold, as a hedge against inflation and a safety net for investors, it is best to purchase gold coins when the stock market is at its peak. This is the point at which most investors will sell off their gold coin investments in order to purchase stocks that appear to be increasing in value. You’ll know that it’s time to sell when the stock market goes back down again. This indicates that investors are selling stocks and are buying commodities like gold in order to try to maintain the value of their portfolios.
You really can’t go wrong, however, when you invest in gold coins a little at a time over the course of several years. For instance, if you set aside $10 per week for investment purposes, you could purchase $520 worth of gold per year. This amount can be easily saved by skipping just one lunch out per week, and investing in gold coins just once per year, or as your funds appreciate to the point at which you can purchase your desired amount of gold.
Commemorative Gold Coins
Commemorative gold coins and historical gold coins are a special case, even when they have been issued by the United States Mint. Commemorative gold coins and historical gold coins were once minted in great numbers, but many were turned over to the federal government in 1933. Of particular interest is the 1933 $20 double eagle, a particularly rare example of a United States gold coin that was never intended for circulation. Even today, there is only a single example of this coin that can be legally bought and sold by the public. It is on display at the Federal Reserve Bank of New York, having been purchased by an undisclosed bidder for approximately $7.6 million dollars.
Commemoratives and historical pieces are worth considerably more than their metal value because of their scarcity. To determine the value of these gold coins, you have to consult a pricing guide as well as the current gold prices on the open market.
Buying and selling gold coin investments
You may be tempted to sell or buy commemorative or historical gold coins from a “cash for gold” store in your area, but be warned. You will not receive your full investment value back. Instead, you will receive wholesale pricing, which can be anywhere from 10-20% less than the retail value, which is more in line with what your gold coins are actually worth. If possible, you may want to use an online auction service such as Ebay, to sell your gold coins when the time comes. Set a “buy it now” price to the current market value of gold, and chances are good that the auction won’t come to a conclusion, as the gold coins will likely be snapped up quickly.
You can also purchase your gold coins online, but make certain that you always work with well-established sellers who have a long record of positive feedback. This will help to ensure that you will not only receive the best return on your investment, but that you won’t get cheated by an unscrupulous dealer, as well.
Sources:
United States Mint: 2012 United States Mint American Eagles: www.usmint.gov