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Basic Gold
Investing
Are
you interested in knowing more about gold investments but have
never bought gold before and are not sure where to start?
If
you answered YES, then read on - this article was written for you.
Free Gold
Investment Advice
You
won't
find a sales pitch for buying gold from me here since I no longer sell
precious metals. I
want you to benefit from my experience
in selling gold and silver for one of the oldest, most reputable
precious metal dealers in the USA.
Investing in gold coins can be as simple or as complicated as you want
to make it. If
you are just starting out on your gold investments, this
basic gold investing strategy will simplify things greatly for you.
I am going to tell you about some of the most popular and recognized
gold
coins you can invest in. Just
keep in mind that only you can decide if
investing in these gold coins is right for you. I take no
responsibility for your gold investment decisions.
With that said, let's begin...
Basic Gold
Investing-Gold Bullion Coins
If
you are just starting out with gold investments, I recommend investing
in gold bullion
first. Gold bullion has the least
premium over the spot price (or melt value) of gold at the time of your
purchase. So it is the least expensive way to start acquiring gold.
Gold bullion comes in coin or bar form with coins more
popular in the U. S.
-
My top gold bullion recommendation is
the Gold American Eagle. First issued in 1986 by two U.S. Mints,
Gold Eagles are the most popular gold bullion coins
in the U. S. Each coin is 22-karat gold and has an image
of Lady Liberty on the obverse (front) as designed by
Augustus Saint-Gaudens (more on him later). You can
see this image above, it is the first
coin on the left.
 The
coin's reverse image (at right) is a Nest of Eagles designed by
Ms. Miley Busiek. Gold Eagles are backed by the U. S.
government for content and purity and are widely accepted
worldwide making them very liquid.
American Eagle gold bullion
coins can be purchased in four different denominations: one
ounce with a $50 face value; half-ounce with a $25 face value;
quarter-ounce with a face value of $10; and tenth-ounce with a $5 face
value. You will pay more of a premium over spot gold for the half,
quarter and
tenth-ounce coins than the one ounce coin. I will
talk more about premiums later.
-
Gold Canadian Maple Leaf
My second bullion recommendation is from
our friends to the north - the Gold Canadian Maple
Leaf. Produced by the Royal Canadian Mint starting in 1979, these
beautiful 24 karat gold coins are 99.99% pure gold (production
of 99.999% pure gold Maple Leaf coins began in 2007). The Gold
Maple Leaf has an image of Great Britain's Queen
Elizabeth II on the obverse side. You can
see this image above, it is the second coin on the
left. The coin's reverse image 
(at right) is that of a maple leaf - Canada's
national symbol.
Gold Maple Leaf coins are
guaranteed by the Government of Canada for their content/purity. They
are as widely recognized and accepted as the U.S. Gold Eagle. Gold
Maple Leaf bullion coins can be purchased in the following sizes: one
ounce, face value of 50 Canadian dollars;
half-ounce, face value of 20 Canadian dollars;
quarter-ounce, face value of 10 Canadian
dollars; and tenth-ounce, face
value of 5 Canadian dollars. Premiums over spot gold are similar
to American Gold Eagles.
Let me caution you
if you decide to invest in Gold Canadian Maple Leaf coins. These
coins are pure gold which is a soft metal. As such, they are
easily scratched or nicked if you are not careful in handling
them. Always
handle your coins by the edges only (regardless of what gold coin it
is) and be especially careful handling your Gold Maple Leaf coins.
-
My third gold bullion recommendation is the South
African
Krugerrand. Produced by the South
African Mint beginning in 1967, this coin gets its name from Paul
Kruger, the last president of the Republic of South Africa, and the
"rand", the monetary unit of South Africa.
The Krugerrand is alloyed with copper (1/12 copper, 11/12
pure gold) resulting in a 22-karat coin. They are more durable
and scratch-resistant than pure gold coins. The coin's obverse
side has the image of Paul Kruger. You can
see this image above, it is the middle
coin. The reverse
(at right) is that of a springbok antelope, one of South Africa's
national symbols.
South African Krugerrands are as
internationally recognized and accepted today as the Gold
Eagle and the Gold Maple Leaf. In the mid-1980's, the
U.S. banned the importation of Krugerrands as part of
the anti-South African boycott (Krugerrands already in the U. S. were
allowed to continue being traded). Because of this, Krugerrands
lost some of their luster (no pun intended). As a result,
these coins tend to have a lower premium and are a cheaper way for you
to
own very liquid gold coins. Krugerrands also come in half,
quarter and tenth-ounce sizes. When you find these, you may
find the
premiums to be among the least of the fractional coins.
Let
me talk a little bit about premiums....
Say you visit your local coin dealer (or a web site that buys/sells
gold coins) to buy a one-ounce
Gold Eagle. At the time
of your visit, the spot price of gold
is $1100. Will you pay $1100 for your one-ounce gold coin? No - you
will pay $1100 plus the premium the dealer charges for one Gold
Eagle (and sales tax if applicable).
Premiums for the above gold bullion
coins can vary widely from
dealer
to dealer and are based mainly on demand for a particular coin
(although several other factors can enter in). For Fractional
Gold Coins
(half-ounce, quarter-ounce, etc.) the premiums are higher. In other
words, the smaller the coin, the more the premium.
When Buying
Gold Coins - Buyer Beware
Now
that
you have a basic knowledge of popular gold bullion coins to invest
in, you are almost ready to start shopping. But before you do,
let me just say
that when the price of gold gets this high, precious metals
dealers come "out of the woodwork". You
must be careful when
selecting a dealer as there have been several incidents
over
the years where gold and silver dealers have skipped town or simply
closed
down with their customers losing big money.
In the future, I will be doing an article on what to look for in
selecting a reputable precious metals dealer. Until then, look
for a dealer with "credentials", one
that has been in business for some years and has a
good reputation for honest dealing and customer
service.
Before you begin shopping, it is important for you to know the current spot price
of gold. Otherwise, how will you know how high of premium
the dealer
is charging you? You can get the spot
gold price from our Home Page or from several
other online sources.
If
you choose to shop online, you
can start by visiting the web sites of companies such as Blanchard,
Investment
Rarities and
Kitco)
.
Please note that I
am not endorsing
or recommending any particular dealer at this time. It is
for you to determine if a particular dealer
is one you want to use for gold bullion investing.
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