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Should you invest in Gold Coins?

By Edited Nov 13, 2013 0 0

Gold Coins (34527)

For over 5,000 years humans have valued gold. The shiny, dense metal was originally made into statues and idols. With its universal acceptance, and ability to be molded and divided gold became a preferred medium of exchange between wealthy individuals and nations.

Unlike silver, gold is not destroyed through use in industrial applications. If you could gather all of the Gold ever mined it would only form a cube 25 meters x 25 meters x 25 meters!1.

Today gold is still valued by individuals and nations. With world central banks continuing to print money, investing some of your fiat (paper) currency in gold is a good strategy for preserving your future purchasing power. Below are some common questions asked by first time gold buyers.

Why invest in an asset that pays no interest or dividends?

  1. Physical gold is no one else's liability. When you buy gold coins or bars you are purchasing a tangible asset.
  2. Gold will always have value. It has fluctuated over time, but in today's environment it is extremely unlikely that world central banks and Governments will take the necessary steps to rein in spending in order to reduce deficits and national debts.
  3. Most traditional safe investments such as savings accounts, CDs, and Treasury Notes are paying practically zero interest and can be impacted by further declines in exchange rates.

Where can I buy gold or silver coins and bars?

A quick Google search for "buy gold online" yields a long list of online precious metal dealers. Industry leaders include APMEX, KITCO, Bullion Direct, Blanchard, & Tulving.

Why does the price of gold coins vary so much?

The price you pay for a gold coin is a factor of three variables:

  1. Current or spot price of gold at the time you lock in your order.
  2. The premium or markup you pay over the current or spot price of gold. Premium is impacted by the particular coins you are purchasing (i.e. 1oz American Eagle Gold Coins generally have a higher premium then 1oz South African Krugerrands and smaller gold coins; 1/10oz, 1/4oz, 1/2oz have a higher percentage premium then 1oz gold coins). Premium is also impacted by the quantity you are buying, as some dealers offer better prices but require that you purchase a minimum of 10 or 20 ounces.
  3. Shipping and or handling, some dealers charge a per coin fee. Other dealers that require a minimum purchase size will ship for free.

Where do I store my Gold?

Each individual has to answer this question for themselves. For those who think a safe deposit box is a good place to store valuables, I give you this bit of U.S. History from 1933:

Executive order: By virtue of the
authority vested in me by Section 5(B) of
The Act of Oct. 6,
1917, as amended by section 2 of
the Act of March 9, 1933, in which
Congress declared that
a serious emergency exists, I as
President, do declare that the national
emergency still exists;
That the continued private hoarding
of gold and silver by subjects of the United
States poses a
grave threat to the peace, equal
justice, and well-being of the United
States; and that appropriate
measures must be taken immediately
to protect the interests of our people.

"Therefore, pursuant to the above
authority, I herby proclaim that such gold
and silver holdings
are prohibited, and that all such
coin, bullion or other possessions of gold
and silver be tendered within fourteen days
to agents of the Government of the United
States for compensation at the
official price, in the legal tender of
the Government. All safe deposit boxes in
banks or financial
institutions have been sealed,
pending action in the due course of the
law. All sales or purchases
or movements of such gold and
silver within the borders of the United
States and its territories,
and all foreign exchange
transactions or movements of such metals
across the border are herby prohibited.

"Your possession of these
proscribed metals and/or your maintenance
of a safe-deposit box to
store them is known to the
Government from bank and insurance
records. Therefore, be advised
that your vault box must remain
sealed, and may only be opened in the
presence of an agent of
The Internal Revenue Service.

"By lawful Order given this day,
the President of the United States."



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