The Benefits of Collecting Gold Coins

Gold and silver have been used to make coins for both business and trade ever since the first coins were made in Lydia, or western Turkey, in the 6th century BC. They bore faces of either a bull or a lion on the front and either a seal or a punch mark on the back. They were made from an alloy of gold and silver called electrum, which could be found in the local rivers of the region. They weighed anywhere from .2 grams to 17.2 grams. When these first coins were produced, the practice of coin collecting and investing began and has evolved in various cultures over hundreds and thousands of years.

The use of gold coins waned in popularity during the Great Depression in the United States in 1933 when Franklin D. Roosevelt signed an order forbidding Americans to hoard any kind of gold. In fact, they were required to turn all but five ounces of their gold in to the Federal Reserve for a low exchange rate. It was at this time the government completely took over the gold standard to try and repair the national wealth. Since America was a leader in gold coin trading all over the world, this put an end to the global coinage era. However, the limitation was repealed by Gerald Ford in 1974 and the use of gold quickly regained popularity and many enthusiasts when the country bounced back from the horrible recession.

Today coins are collected and traded by coin enthusiasts, historians, and even businessmen. Gold coins used in business that are kept as an investment or store of value are called bullion coins, and are used to invest gold without considering the actual coins nominal value of the coin. This particular type of coin is not used in day to day commerce and is available in various weights. Gold is considered to be an excellent way of exchanging value because it is easily broken down without having its value affected. Gold is preferred to silver because it has a higher density, higher value, lesser weight, is easily transported, and takes longer to decay than nearly all other metals. It is also much more difficult to counterfeit.

There are multiple types of valuable coins available all over the world: American Eagles, UK and Australian Gold Sovereigns, South Africa Krugerrands, Canadian Maple Leafs, and Chinese Pandas are just a few of these. The South African Krugerrand was first minted in 1967 and is produced by the South African Mint Company. It was originally intended to circulate as currency and therefore was made out of a different material than most other bullion coins. Although it was legal tender, Western countries made it illegal to import these coins during the 1970’s and 1980’s because of South Africa’s policy of apartheid. The apartheid was abandoned and trade continued in 1994. During the 1980’s the Krugerrand accounted for just over 90% of the entire world’s gold coin market, which led to other countries to produce their own form of gold coin, two of these being the Canadian Maple Leaf and the American Eagle gold coin.

The American Eagle gold coin comes in four different sizes (1/10 oz, oz, oz, and 1 oz) with the price varying according to the size and are made of 22 karat or 91.67% of fine gold. They were first authorized by the United States Congress in 1985, first minted in 1986, and come in a proof or bullion coin, both known to be sound investments because of their high content of gold and guaranteed quality. The American Eagle gold coin is also available in both silver and platinum. All three are leading bullion coin investments.

The American Buffalo gold coins, often called the “gold buffalo,” were designed by the American sculptor James Earle Fraser and feature a Native American chief on one side and a buffalo on the other. Along with the buffalo, the back side contains an inscription of the coin’s denomination, weight, and gold content. They were introduced to America in 1913 by the US Mint and are offered by a large chain of authorized purchasers. They make a sound investment and are the safest form of free trade because their quality and purity is guaranteed by the American government.

Nowadays gold coins are seen to be a very profitable investment because their value remains high, and because the national wealth of nearly all of the countries and civilizations in the world is measured by their total amount of gold. This also means that gold can be bought, sold, and traded all over the world without having to worry about currency exchange making it extremely profitable all over the world. If you are looking to capitalize on a price movement, gold bullion coins are the way to go. There is no timing when buying gold coins and building a portfolio like there is with the stock market, just buy one coin at a time whenever you feel that you are ready.

Many people worry about risk when investing, but luckily the risk is minimized when investing in gold because it is a standalone investment and the value varies inversely to the stock market. After all, gold will always be in demand, and therefore it will always give good returns. It can even be owned, sold, and transferred without documentation. Once you build up your portfolio, you can either hold on to your gold coins, or you can sell them at the current market rate if you are ever in need of money. The bottom line concerning gold: it is a sound investment practice with minimal risk involved that is popular the world over, just as it has been for thousands of years.

Learn more about collecting gold coins. Stop by Kevin Goldstein’s site where you can find out all about gold coins and how they can make a great investment.